Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Biden's USTR came out with a flawed Section 301 report on Chinese maritime "dominance" in January. It is not that China shipbuilding is not dominant, but the report was flawed.</li>
<li>In February/March (flawed) measures were proposed. Then mostly minimally-insightful hearings were held. Then Trump came out with an <a href="https://www.whitehouse.gov/presidential-actions/2025/04/restoring-americas-maritime-dominance/" target="_blank" rel="noopener">Executive Order</a> "Restoring America's Maritime Dominance" (that requires looking back 80yrs). </li>
<li>Now we have new USTR Proposed Measures which water down the old ones quite considerably.</li>
</ul>


Biden's USTR came out with a flawed Section 301 report on Chinese maritime "dominance" in January. It is not that China shipbuilding is not dominant, but the report was flawed.
In February/March (flawed) measures were proposed. Then mostly minimally-insightful hearings were held. Then Trump came out with an Executive Order "Restoring America's Maritime Dominance" (that requires looking back 80yrs). 
Now we have new USTR Proposed Measures which water down the old ones quite considerably.


*NEW* USTR Section 301 Proposed Actions on China Maritime Dominance

<ul>
<li>The original issues were discussed in depth in <a href="https://www.smartkarma.com/insights/the-ustr-s-new-proposed-actions-for-section-301-investigation-on-china-s-maritime-shipping-sectors" target="_blank" data-smartkarma-citation="insights:178938" rel="noopener">The USTR's New "Proposed Actions" For Section 301 Investigation on China's Maritime/Shipping Sectors</a> (now unpaywalled). Hearings took place 24-26 March 2025. </li>
<li>The hearings were long, and comments were predictable. Those supporting the measures offered evidence which was simply incorrect. Those against tried. Post-hearing comments were due 2 April. </li>
<li>We don't yet know what will happen, but if they stay in place, starting 17 April, US exports of grain/pulses, coal, etc will suffer. Imports will see higher costs too.</li>
</ul>


The original issues were discussed in depth in The USTR's New "Proposed Actions" For Section 301 Investigation on China's Maritime/Shipping Sectors (now unpaywalled). Hearings took place 24-26 March 2025. 
The hearings were long, and comments were predictable. Those supporting the measures offered evidence which was simply incorrect. Those against tried. Post-hearing comments were due 2 April. 
We don't yet know what will happen, but if they stay in place, starting 17 April, US exports of grain/pulses, coal, etc will suffer. Imports will see higher costs too.


USTR Hearings on Section 301 China Maritime Dominance - Fees on Chinese Ships

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/daihatsu-diesel-mfg-co-ltd" target="_blank" data-smartkarma-citation="entities:12455:1" rel="noopener">Daihatsu Diesel Mfg (6023 JP)</a> is down sharply today - much more than indices - as autos/tech fall on US auto tariffs. There may be some GPIF unwinds as well. </li>
<li>A reminder: Despite the name, Daihatsu Diesel is not an auto name, is growing, has a big order book, and minimal direct exposure to the US. </li>
<li>The Tender settles today. The 8% overhang from Tendered-But-Unsold Shares is an opportunity, not a burden, at 7.2x ex-cash PER.</li>
</ul>



Daihatsu Diesel Mfg (6023 JP) is down sharply today - much more than indices - as autos/tech fall on US auto tariffs. There may be some GPIF unwinds as well. 
A reminder: Despite the name, Daihatsu Diesel is not an auto name, is growing, has a big order book, and minimal direct exposure to the US. 
The Tender settles today. The 8% overhang from Tendered-But-Unsold Shares is an opportunity, not a burden, at 7.2x ex-cash PER.


Daihatsu Diesel (6023) - Is Not Directly Auto-Tariff-Related

<ul>
<li>In late January, <a href="https://www.smartkarma.com/entities/daihatsu-diesel-mfg-co-ltd" target="_blank" data-smartkarma-citation="entities:12455:1" rel="noopener">Daihatsu Diesel Mfg (6023 JP)</a> announced its once/former parent would sell all its shares; in part to a private company in the industry and a 20% buyback.</li>
<li>The buyback - a below-market own-share tender offer - was priced low enough to be a big win. Accretion added to that. </li>
<li>Buyback Tender Results and External Changes signal overhang and opportunity. Either way, it's cheap, but good governance could make it even cheaper.</li>
</ul>


In late January, Daihatsu Diesel Mfg (6023 JP) announced its once/former parent would sell all its shares; in part to a private company in the industry and a 20% buyback.
The buyback - a below-market own-share tender offer - was priced low enough to be a big win. Accretion added to that. 
Buyback Tender Results and External Changes signal overhang and opportunity. Either way, it's cheap, but good governance could make it even cheaper.


Daihatsu Diesel (6023) Buyback Tender Results Signal Overhang and Opportunity

<ul>
<li>Yesterday, <a href="https://www.smartkarma.com/entities/daihatsu-diesel-mfg-co-ltd" target="_blank" data-smartkarma-citation="entities:12455:1" rel="noopener">Daihatsu Diesel Mfg (6023 JP)</a> announced that it would buy back shares in a Tender Offer and that its controlling "parent" would also sell shares to a private company.</li>
<li>The accretion is significant, and the shareholder structure changes significantly. It is not quite an Exedy-like situation though. The register changes but it doesn't clear. </li>
<li>But the backdrop is considerably different than the MTMP, and that means this smallcap is worth a closer look.</li>
</ul>


Yesterday, Daihatsu Diesel Mfg (6023 JP) announced that it would buy back shares in a Tender Offer and that its controlling "parent" would also sell shares to a private company.
The accretion is significant, and the shareholder structure changes significantly. It is not quite an Exedy-like situation though. The register changes but it doesn't clear. 
But the backdrop is considerably different than the MTMP, and that means this smallcap is worth a closer look.


Daihatsu Diesel's (6023) Big Buyback and Quasi Change of Control

Japan

Daihatsu Diesel Manufacturing Co., Ltd. manufactures marine-use propulsion and auxiliary diesel engines, stationary diesel engines, and industrial products such as aluminum wheels and automatic door closers for train cars. The Company also manages real estate leasing with properties ranging from office buildings to parking garages.

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Daihatsu Diesel Mfg (6023 JP)

NEW USTR Section 301 Proposed Actions on China Maritime Dominance

New USTR Proposed Port Fees to counter China Marine Dominance mean Chinese operators get penalised, foreign operators of Chinese ships get penalised,

Travis Lundy

USTR Hearings on Section 301 China Maritime Dominance - Fees on Chinese Ships

US tariffs on China and others are designed to choke trade. USTR Proposed Actions on port fees are designed to punish China for past investment...

Travis Lundy

Daihatsu Diesel (6023) Buyback Tender Results Signal Overhang and Opportunity

The Daihatsu Diesel tender offer is complete. There has been a pop on the idea of a US tax break for ship building which probably means little, but...

Travis Lundy

Daihatsu Diesel's (6023) Big Buyback and Quasi Change of Control

Since the announcement of a Tender to buy back nearly 20% of shares out at a discount, reducing net cash, and upping EPS by 25%, Daihatsu Diesel...

Travis Lundy

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52-week Range

Market Cap (USDm)

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*NEW* USTR Section 301 Proposed Actions on China Maritime Dominance

New USTR Proposed Port Fees to counter China Marine Dominance mean Chinese operators get penalised, foreign operators of Chinese ships get penalised,

Travis Lundy

USTR Hearings on Section 301 China Maritime Dominance - Fees on Chinese Ships

US tariffs on China and others are designed to choke trade. USTR Proposed Actions on port fees are designed to punish China for past investment...

Travis Lundy

Daihatsu Diesel (6023) - Is Not Directly Auto-Tariff-Related

Daihatsu Diesel is cheap. Tariffs, GPIF selling, and name association may be making it cheaper. This stock is worth sitting on, buying more, etc....

Travis Lundy

Daihatsu Diesel (6023) Buyback Tender Results Signal Overhang and Opportunity

The Daihatsu Diesel tender offer is complete. There has been a pop on the idea of a US tax break for ship building which probably means little, but...

Travis Lundy

Daihatsu Diesel's (6023) Big Buyback and Quasi Change of Control

Since the announcement of a Tender to buy back nearly 20% of shares out at a discount, reducing net cash, and upping EPS by 25%, Daihatsu Diesel...

Travis Lundy

NEW USTR Section 301 Proposed Actions on China Maritime Dominance