Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hitachi-transport-system-ltd" target="_blank" data-smartkarma-citation="entities:2395:1" rel="noopener">Hitachi Transport System (9086 JP)</a> has had a "long" wait to get its approvals, but EC and China are in, any remaining should be in shortly. </li>
<li>Yesterday, as a footnote on the SG Holdings offering document, there was a comment about SG Holdings selling shares. This was likely more good corporate governance hygiene than warning.</li>
<li>Shares are down this morning. I'd expect final approvals and launch quite soon. I would therefore look to buy the dip on flow - block or not.</li>
</ul>



Hitachi Transport System (9086 JP) has had a "long" wait to get its approvals, but EC and China are in, any remaining should be in shortly. 
Yesterday, as a footnote on the SG Holdings offering document, there was a comment about SG Holdings selling shares. This was likely more good corporate governance hygiene than warning.
Shares are down this morning. I'd expect final approvals and launch quite soon. I would therefore look to buy the dip on flow - block or not.


Hitachi Transport (9086 JP) - Tender Launch Likely Soon But Watch for Flow

David Blennerhassett

<ul>
<li>Berkshire appears set to exit <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> partially or in full. But why signal to market well in advance?</li>
<li>
<a href="https://www.smartkarma.com/entities/united-tractors-tbk-pt" target="_blank" data-smartkarma-citation="entities:698:1" rel="noopener">United Tractors (UNTR IJ)</a>'s buyback should be impactful. They could do another one afterwards as they have lots of cash. This is a raging buy. Buy now. With both hands.</li>
<li>The BOJ was expected to change its ETF allocations. It stopped buying Nikkei 225 and JPX Nikkei 400 ETFs. As the world moves more to passive, expect float to decrease.</li>
</ul>


Berkshire appears set to exit BYD (1211 HK) partially or in full. But why signal to market well in advance?

United Tractors (UNTR IJ)'s buyback should be impactful. They could do another one afterwards as they have lots of cash. This is a raging buy. Buy now. With both hands.
The BOJ was expected to change its ETF allocations. It stopped buying Nikkei 225 and JPX Nikkei 400 ETFs. As the world moves more to passive, expect float to decrease.


Last Week in Event SPACE: BYD, Astra/United Tractor, Japan Passive, AGL, Genting Singapore

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>2022 Version of JAPAN PASSIVE: Who Owns What? where we break down the major (and minor) passive tracking indices and which category of investor owns how much of each. </li>
<li>Even if you do not "play" index changes, understanding impact is important. <a href="https://www.smartkarma.com/entities/japan-exchange-group-inc" target="_blank" data-smartkarma-citation="entities:11266:1" rel="noopener">Japan Exchange Group (8697 JP)</a> entered Nikkei 225 in July 2020 after rising 30%. That was the top.</li>
<li>Understanding the nature of the ownership and flows is crucial to understanding how to trade certain stocks. </li>
</ul>


2022 Version of JAPAN PASSIVE: Who Owns What? where we break down the major (and minor) passive tracking indices and which category of investor owns how much of each. 
Even if you do not "play" index changes, understanding impact is important. Japan Exchange Group (8697 JP) entered Nikkei 225 in July 2020 after rising 30%. That was the top.
Understanding the nature of the ownership and flows is crucial to understanding how to trade certain stocks. 


Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

Hitachi Construction Machinery / Equity Bottom-Up

<ul>
<li>HCM reported FY revenue of ¥1,025bn, just above our ¥1,010bn estimate and blowing away clueless consensus’ ¥963bn. </li>
<li>OP was ¥93.5bn despite the trouble in Ukraine/Russia, just below our ¥95bn estimate and significantly above consensus at ¥86.8bn and guidance of ¥84bn. </li>
<li>Guidance for a YoY OP decline is silly in our view and we suspect there will be a double digit increase.</li>
</ul>


HCM reported FY revenue of ¥1,025bn, just above our ¥1,010bn estimate and blowing away clueless consensus’ ¥963bn. 
OP was ¥93.5bn despite the trouble in Ukraine/Russia, just below our ¥95bn estimate and significantly above consensus at ¥86.8bn and guidance of ¥84bn. 
Guidance for a YoY OP decline is silly in our view and we suspect there will be a double digit increase.


HCM – Obvious Blowout Is Obvious… Just Not to the Sell Side

Independent Insight Provider, Japanese equities, LightStream Research

Scott Foster

Independent Insight Provider, Japanese equities

<ul>
<li>Hitachi is evacuating more than 7,000 GlobalLogic employees from Ukraine to other countries, but IT workers are mobile and these may have more work due to cyber attacks.</li>
<li>Hitachi Construction Machinery and other Hitachi Group divisions do some business in Ukraine, but we expect the impact of the crisis to be manageable and temporary.</li>
<li>Hitachi Ltd shares are down 25% since November and the P/E ratio is near the bottom of its historical range. </li>
</ul>


Hitachi is evacuating more than 7,000 GlobalLogic employees from Ukraine to other countries, but IT workers are mobile and these may have more work due to cyber attacks.
Hitachi Construction Machinery and other Hitachi Group divisions do some business in Ukraine, but we expect the impact of the crisis to be manageable and temporary.
Hitachi Ltd shares are down 25% since November and the P/E ratio is near the bottom of its historical range. 


Hitachi Ltd. (6501 JP): Assessing Exposure to Ukraine - Buy into the Sell-Off

Japan

Kurita Water Industries Ltd. manufactures, sells, and maintains water treatment equipment and systems.  The Company's products include water purification and waste water treatment equipment as well as soil remediation systems.  Kurita also manufactures and sells chemicals for water treatment related to sanitation, air-conditioning, and construction.

EBARA CORPORATION manufactures pneumatic and hydraulic pumps and related equipment.  The Company's products include fuel, oil, water, and firefighting pumps, as well as steam turbines and boilers.  Ebara Corporation also engineers garbage incinerators, smoke desulfurizers, and other products related to environmental technology.

IHI Corporation manufactures heavy machinery. The Company produces aircraft jet engines, rocket propulsion systems, and ships for military and commercial use. Ishikawajima-Harima also constructs petroleum refineries and nuclear power plants.

HOSHIZAKI ELECTRIC CORPORATION manufactures and sells commercial use kitchen equipment such as freezers, refrigerators, food/beverage dispensers.  The Company has sales subsidiaries across Japan as well as overseas.

Kawasaki Heavy Industries, Ltd. designs, develops, and manufactures transport equipment and industrial heavy machinery for military and commercial use.  The Company produces ships, railroad cars, aircraft engines and parts, hydraulic and gas turbines, submarine engines, boilers, and industrial robots.  Kawasaki Heavy Industries offers engineering and construction services to industrial plants.

DAIFUKU CO., LTD. designs, manufactures, and sells material handling equipment such as automated storage systems, conveyors, and automatic sorters.  The Company's products are used for automation in manufacturing and distribution businesses.

SUMITOMO HEAVY INDUSTRIES, LTD. manufactures and markets heavy electric machinery.  The Company's operations include heavy machinery, shipbuilding, mass-production machinery, environmental equipment, and construction machinery divisions.  Sumitomo Heavy Industries also produces equipment for semiconductor and laser technologies.

Minebea Mitsumi manufactures and markets miniature and instrument ball bearings.  The Company also makes DC motors, servo motors, stepping motors, spindle motors, pivot assemblies, rod-end and spherical bearings, fasteners, and computer keyboards. Minebea Mitsumi has production facilities in Thailand and Singapore.

DMG MORI CO., LTD. manufactures and markets machine tools and related products. The Company's product line includes numerical control (NC) and high-speed precision lathes, horizontal and vertical machining centers (MCs), and other stationary machine tools capable of performing various tasks.

NGK Insulators, Ltd. manufactures and sells electrical insulators, industrial ceramic products, environmental systems, and electronic parts. The Company's products include ceramic catalyst carrier for exhaust gas purification, automotive honeycombs for exhaust filtering, gas analyzers, high pressure compaction systems, and sewer cleaning equipment.

Samsung Heavy Industries Co., Ltd. manufactures crude oil tankers, container vessels, bulk carriers, cruisers, and passenger ferries.  The Company also produces steel and bridge structures, and material handling equipment.  In addition, Samsung Heavy Industries provides civil engineering, architectural, and plant construction services.

Seatrium Ltd offers engineering solutions for the offshore, marine, and energy industries. The Company provides rigs and floaters, repairs and upgrades, offshore platforms, and specialized shipbuilding. Seatrium serves customers worldwide.

Yangzijiang Shipbuilding (Holdings) Limited builds a wide range of ships. The Company produces a wide range of commercial vessels, mini bulk carriers, multi-purpose cargo vessels, containerships, chemical tankers, offshore supply vessels, rescue and salvage vessels, and lifting vessels.

AGCO Corporation manufactures and distributes agricultural equipment throughout the world.  The Company sells a range of agricultural equipment and related replacement parts, including tractors, combines, hay tools, sprayers, and forage equipment.  AGCO markets its products under a variety of brand names, including Massey Ferguson, AGCO, Tye, GLEANER, and Hesston.

Thermax Ltd manufactures equipment and machinery used to both produce and to conserve energy. The Company operates through a number of divisions, including Boilers, Heat Recovery Steam Generators, Water Treatment Plants and Air Pollution Control Equipment. In addition, Thermax  produces steam and gas turbines and diesel gensets through a number of strategic alliances.

Watts Water Technologies, Inc. designs, manufactures, and sells a line of products to the water regulation and control markets.  The Company has manufacturing plants and distribution channels in the United States, Canada, and Europe, as well as a joint venture in The People's Republic of China.

Chart Industries, Inc. is a global manufacturer of equipment used in the production, storage, and end-use of hydrocarbon and industrial gases. The Company's products include vacuum-insulated containment vessels, heat exchangers, cold boxes, and other cryogenic components.

Zoomlion Heavy Industry Science and Technology Co., Ltd.manufactures and markets construction machinery.  The Company's products include concrete machinery, cranes, road machinery, drilling equipment, and other heavy construction equipment.  Zoomlion also produces environmental machinery and satellite navigation products.

Suzhou Dongshan Precision Manufacturing Co., Ltd. develops, manufactures and sells precision metal plate and cast metal.  The Company's products include communication equipment precision metal part, and machine bed precision metal part.

Hanwha Ocean Co., Ltd. operates as a shipbuilding and offshore company. The Company provides floating structure construction, steel wire drying, commercial vessels, specialty vessels, gas carrier, tanker, containership, ro ro, bulk carrier, submarine, warship, auxiliaries, cruise ships, and ferries manufacturing services. Hanwha Ocean also offers onshore plants services.

Hitachi Construction Machinery Co., Ltd. develops, manufactures, sells, and repairs construction machinery. The Company's products include hydraulic excavators, crawler cranes, wheel loaders, shield machines, and bulldozers. Hitachi Construction Machinery, a subsidiary of Hitachi, Ltd., markets its products worldwide through sales offices overseas.

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Hitachi Construction Machinery (6305 JP)

Hitachi Transport (9086 JP) - Tender Launch Likely Soon But Watch for Flow

Hitachi Transport should be in final stages. The two tough approvals were done a month ago. The Russia sub should not be a factor (it could be sold...

Travis Lundy

Last Week in Event SPACE: BYD, Astra/United Tractor, Japan Passive, AGL, Genting Singapore

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

JAPAN PASSIVE: Who Owns What 2022?

JAPAN PASSIVE: Who Owns What 2022 Version. This is a mark to market of the passive tracking data from domestic and international investors in...

Travis Lundy

HCM – Obvious Blowout Is Obvious… Just Not to the Sell Side

HCM results came in mostly in line with our projections but guidance for a YoY decline in OP is grossly unrealistic in our view. We expect a new...

Mio Kato

Hitachi Ltd. (6501 JP): Assessing Exposure to Ukraine - Buy into the Sell-Off

Hitachi is evacuating GlobalLogic employees from Ukraine, but they can work remotely. The exposure of Hitachi Construction Machinery and other...

Scott Foster

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