Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On 8 November, major Japanese life insurer <a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life Insurance (8750 JP)</a> announced it would buy out leading pet insurer <a href="https://www.smartkarma.com/entities/ipet-holdings-inc" target="_blank" data-smartkarma-citation="entities:36551:1" rel="noopener">ipet Holdings (7339 JP)</a>. Yes, you read that right.</li>
<li>Japanese listed VC/PE firm and incubator <a href="https://www.smartkarma.com/entities/dream-incubator-inc" target="_blank" data-smartkarma-citation="entities:1229:1" rel="noopener">Dream Incubator Inc (4310 JP)</a> owns 55% and agreed to tender. Tender success is dependent on getting 66.7%. </li>
<li>Today the buyer extended for 10 days because it had received approval under Article 271-22 Para 1 of the Insurance Business Act, triggering a requirement to refile/extend.</li>
</ul>


On 8 November, major Japanese life insurer Dai Ichi Life Insurance (8750 JP) announced it would buy out leading pet insurer ipet Holdings (7339 JP). Yes, you read that right.
Japanese listed VC/PE firm and incubator Dream Incubator Inc (4310 JP) owns 55% and agreed to tender. Tender success is dependent on getting 66.7%. 
Today the buyer extended for 10 days because it had received approval under Article 271-22 Para 1 of the Insurance Business Act, triggering a requirement to refile/extend.


IPet Holdings (7339 JP) - Tender Offer Extended But No Biggie

Director, Pearl Hill Advisors

Nicholas Tanner

Director

Pearl Hill Advisors

Equity Bottom-Up

A sum of parts valuation would suggest Dream Incubator is very conservatively worth Y30bn (perhaps closer to Y40bn) vs. the current market cap of just over Y20bn. It is thus trading on at least a 35% discount to the sum of the parts, and the Ipet business is growing and there are a number of interesting potential IPOs to happen over the next few years. In terms of a p.e.r, the shares are on about 18x this year’s numbers. The company does not make forecasts as it is difficult to forecast the venture capital business. What they will say, however, is that the pet insurance business and the consulting business this year should have combined revenue of Y18bn (+16%) vs. Y15.5bn last year. This seems reasonable and profits on both will improve. Thus the wild card is the venture business but there is nothing to suggest a worse year this year.

A sum of parts valuation would suggest Dream Incubator is very conservatively worth Y30bn (perhaps closer to Y40bn) vs. the current market cap of just over Y20bn. It is thus trading on at least a 35% discount to the sum of the parts, and the Ipet business is growing and there are a number of interesting potential IPOs to happen over the next few years. In terms of a p.e.r, the shares are on about 18x this year’s numbers. The company does not make forecasts as it is difficult to forecast the venture capital business. What they will say, however, is that the pet insurance business and the consulting business this year should have combined revenue of Y18bn (+16%) vs. Y15.5bn last year. This seems reasonable and profits on both will improve. Thus the wild card is the venture business but there is nothing to suggest a worse year this year.

Dream Incubator (4310) Sold off Following Ipet Listing, Now Too Cheap.

It was recently announced that ipet insuance (7323) would IPO on the 25th April. The lead manager will be Daiwa. Pricing will be 6th April and book building will take place between the 10th and 16th of April. In the year to March 2017 this company had sales of Y10bn (+23%) and operating profits of Y0.3bn (-4%).As discussed in the past, ipet insuance is 61% owned by Dream Incubator (4310) and with sales of Y10bn has about 20% of Japan's pet insurance market. The leader in this market is Anicom…

It was recently announced that ipet insuance (7323) would IPO on the 25th April. The lead manager will be Daiwa. Pricing will be 6th April and book building will take place between the 10th and 16th of April. In the year to March 2017 this company had sales of Y10bn (+23%) and operating profits of Y0.3bn (-4%).As discussed in the past, ipet insuance is 61% owned by Dream Incubator (4310) and with sales of Y10bn has about 20% of Japan's pet insurance market. The leader in this market is Anicom…

Dream Incubator (4310) And the Upcoming IPO of Ipet Insurance (7323)

As expected, a big uplift for the 9 month period as 3Q included gains of c Y1bn following the sale of its 15% in LTS (6560) after this company's December 2017 IPO.The next big event for Dream Incubator is the upcoming IPO of Ipet, expected early next financial year. Dream owns 64% of this company, Japan's seond largest pet insurance business with 20% of the market. It is in the books at Y1bn but said to be worth about Y15bn (based on valuations of Anicom (8715), its main competitor in pet…

As expected, a big uplift for the 9 month period as 3Q included gains of c Y1bn following the sale of its 15% in LTS (6560) after this company's December 2017 IPO.The next big event for Dream Incubator is the upcoming IPO of Ipet, expected early next financial year. Dream owns 64% of this company, Japan's seond largest pet insurance business with 20% of the market. It is in the books at Y1bn but said to be worth about Y15bn (based on valuations of Anicom (8715), its main competitor in pet…

Since our BUY note of end June 2017 the shares are up 15%. First half results came and no real surprise but in the third quarter the company will have reported an gain of close to Y1bn following the 13th December listing of LTS (6560), a consultancy service company in which it owned 15%. Its plan was to dispose of its entire stake at the time of IPO. This will boost profits considerable this year. 3Q results will be out on February 14th and we would expect to see strong growth in profits as a…

Since our BUY note of end June 2017 the shares are up 15%. First half results came and no real surprise but in the third quarter the company will have reported an gain of close to Y1bn following the 13th December listing of LTS (6560), a consultancy service company in which it owned 15%. Its plan was to dispose of its entire stake at the time of IPO. This will boost profits considerable this year. 3Q results will be out on February 14th and we would expect to see strong growth in profits as a…

Dream Incubator (4310) 2 Catalysts to Drive Share Price Higher near Term.

Japan

Dream Incubator Inc. nurtures venture companies.  The Company supports companies by providing strategic insights and other consulting services.

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Dream Incubator (4310 JP)

IPet Holdings (7339 JP) - Tender Offer Extended But No Biggie

Dai Ichi Life today extended its TOB for iPet Holdings (7339). Sometimes an extension masks a potential bump to come. In this case I think not....

Travis Lundy

Dream Incubator (4310) Sold off Following Ipet Listing, Now Too Cheap.

A sum of parts valuation would suggest Dream Incubator is very conservatively worth Y30bn (perhaps closer to Y40bn) vs. the current market cap of...

Pearl Hill Advisors

Dream Incubator (4310) And the Upcoming IPO of Ipet Insurance (7323)

It was recently announced that ipet insuance (7323) would IPO on the 25th April. The lead manager will be Daiwa. Pricing will be 6th April and book...

Pearl Hill Advisors

Dream Incubator (4310) Great Figures !

As expected, a big uplift for the 9 month period as 3Q included gains of c Y1bn following the sale of its 15% in LTS (6560) after this company's...

Pearl Hill Advisors

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

IPet Holdings (7339 JP) - Tender Offer Extended But No Biggie

Dai Ichi Life today extended its TOB for iPet Holdings (7339). Sometimes an extension masks a potential bump to come. In this case I think not....

Travis Lundy

Dream Incubator (4310) Sold off Following Ipet Listing, Now Too Cheap.

A sum of parts valuation would suggest Dream Incubator is very conservatively worth Y30bn (perhaps closer to Y40bn) vs. the current market cap of...

Pearl Hill Advisors

Dream Incubator (4310) And the Upcoming IPO of Ipet Insurance (7323)

It was recently announced that ipet insuance (7323) would IPO on the 25th April. The lead manager will be Daiwa. Pricing will be 6th April and book...

Pearl Hill Advisors

Dream Incubator (4310) Great Figures !

As expected, a big uplift for the 9 month period as 3Q included gains of c Y1bn following the sale of its 15% in LTS (6560) after this company's...

Pearl Hill Advisors

Dream Incubator (4310) 2 Catalysts to Drive Share Price Higher near Term.

Since our BUY note of end June 2017 the shares are up 15%. First half results came and no real surprise but in the third quarter the company will...

Pearl Hill Advisors