Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Itochu today announced a buyback program to buy US$500mm+ in the next 10 weeks. </li>
<li>Net income growth, a rising dividend, and balanced risk book help it perform with low beta and medium correlation to peers. </li>
<li>The low volatility-relative multiple is supportive, and the buyback helps, but style bias vs Peers matters more. </li>
</ul>


Itochu today announced a buyback program to buy US$500mm+ in the next 10 weeks. 
Net income growth, a rising dividend, and balanced risk book help it perform with low beta and medium correlation to peers. 
The low volatility-relative multiple is supportive, and the buyback helps, but style bias vs Peers matters more. 


Short-Term Itochu Buyback - A Cushion, But Style Bias Matters More

Hitachi Construction Machinery / Event-Driven

<ul>
<li>On Thursday we saw news of a Hitachi sale of half its stake in HCM. Friday the stock traded down hard. Friday night saw news that underwhelmed further. </li>
<li>The deal is big, but it is basically a deal to get Hitachi out as parent. There is no Capital Alliance and there is no Strategic Alliance yet. </li>
<li>There simply is not much there, there yet. And the stock is less liquid than it looks, and that won't get better any time soon.</li>
</ul>


On Thursday we saw news of a Hitachi sale of half its stake in HCM. Friday the stock traded down hard. Friday night saw news that underwhelmed further. 
The deal is big, but it is basically a deal to get Hitachi out as parent. There is no Capital Alliance and there is no Strategic Alliance yet. 
There simply is not much there, there yet. And the stock is less liquid than it looks, and that won't get better any time soon.


Hitachi Construction Machinery Deal To Change "Parent" - There's Not Much There There

<ul>
<li>An NHK report today post-close said <a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" data-smartkarma-citation="entities:7797:1" rel="noopener">Hitachi Ltd (6501 JP)</a> would sell "about half" its stake in sub <a href="https://www.smartkarma.com/entities/hitachi-construction-machinery" target="_blank" data-smartkarma-citation="entities:19433:1" rel="noopener">Hitachi Construction Machinery (6305 JP)</a> to Itochu and Japan Industrial Partners.</li>
<li>That is quite similar to the announcement 15 months ago in the Nikkei which precipitated a large drop. While unconfirmed, it smells like there is fire behind the smoke.</li>
<li>The big question is <em>What Next</em>? and <em>What Impact</em> for shareholders? That's a tough couple of questions. </li>
</ul>


An NHK report today post-close said Hitachi Ltd (6501 JP) would sell "about half" its stake in sub Hitachi Construction Machinery (6305 JP) to Itochu and Japan Industrial Partners.
That is quite similar to the announcement 15 months ago in the Nikkei which precipitated a large drop. While unconfirmed, it smells like there is fire behind the smoke.
The big question is What Next? and What Impact for shareholders? That's a tough couple of questions. 


Hitachi Finally Bailing on Hitachi Construction (6305); Too Early To Buy

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.

<ul>
<li>NHK reports that Hitachi will be selling roughly half of its 51% stake in HCM to Itochu and Japan Industrial Partners. </li>
<li>HCM has outperformed Komatsu over the last year and it is possible that some investors were expecting a buyout. </li>
<li>If so, and if there is a negative reaction to this news we would be looking to buy.</li>
</ul>


NHK reports that Hitachi will be selling roughly half of its 51% stake in HCM to Itochu and Japan Industrial Partners. 
HCM has outperformed Komatsu over the last year and it is possible that some investors were expecting a buyout. 
If so, and if there is a negative reaction to this news we would be looking to buy.


HCM – Hitachi Partial Stake Sale to Itochu

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

<ul>
<li>Descente Ltd (8114 JP)  is about the same size as Goldwin but has traditionally depended for half of its sales on South Korea.</li>
<li>
<a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> acquired control in a fraught battle with management, in order to reduce this dependence. As a result, Descente managed a return to the black in 1H202.</li>
<li>It has ambitious plans to create a set of brands strong both at home and abroad by copying much of Goldwin’s playbook, particularly its investment in retail and online.</li>
</ul>


Descente Ltd (8114 JP)  is about the same size as Goldwin but has traditionally depended for half of its sales on South Korea.

Itochu Corp (8001 JP) acquired control in a fraught battle with management, in order to reduce this dependence. As a result, Descente managed a return to the black in 1H202.
It has ambitious plans to create a set of brands strong both at home and abroad by copying much of Goldwin’s playbook, particularly its investment in retail and online.


Japan

ITOCHU Corporation is a general trading firm handling textiles, wood, machinery, metals, food, chemicals, construction materials, commodities, and energy related products such as oil and gas. The Company operates around the world. Itochu diversifies by operating in satellite communication and data communication businesses.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Itochu Corp (8001 JP)

Short-Term Itochu Buyback - A Cushion, But Style Bias Matters More

Itochu has announced a buyback to execute in the next 10 weeks. It is a decent part of ADV but not overwhelming. It should support the stock vs...

Travis Lundy

Hitachi Construction Machinery Deal To Change "Parent" - There's Not Much There There

The Hitachi deal to sell a 26% stake in Hitachi Construction Machinery to Itochu and Japan Industrial Partners is deceptive. It is just a trade...

Travis Lundy

Hitachi Finally Bailing on Hitachi Construction (6305); Too Early To Buy

NHK had an article out post-close saying Hitachi would sell "About half" it's stake in Hitachi Construction Machinery to Itochu and JIP. It will be...

Travis Lundy

HCM – Hitachi Partial Stake Sale to Itochu

NHK reports that Hitachi will be selling roughly half of its 51% stake in HCM to Itochu and Japan Industrial Partners. If there is a negative...

Mio Kato

Descente: The Next Goldwin?

Japan's outdoor/sports market remains one of the few consistent growth categories in consumer markets. Goldwin was the most visible success story...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)