Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<p>On Wednesday, partway through the day, it was discovered that the website of a relatively obscure Japanese "business and politics" monthly magazine which works off a kind of "membership system" called Sentaku (選択) carried an article about <a href="https://www.smartkarma.com/entities/fujitsu-ltd" target="_blank" data-smartkarma-citation="entities:16968:1" rel="noopener">Fujitsu Ltd (6702 JP)</a> and its listed subs. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/109/006/original/Screenshot%202019-12-04%20at%204.48.26%20PM.png?1575449375" class="editor-image img-responsive" data-smartkarma-image-id="109006"></figure><p>I have not read the article - no access - but the headline suggests...</p><blockquote><p>Fujitsu too is studying the elimination of parent-subsidiary dual listings, a process which could start at earliest within this fiscal year. </p></blockquote><p>That sent Fujitsu's listed subs higher on the day.</p><ul>
<li>Battery and components maker, <strong><a href="https://www.smartkarma.com/entities/fdk-corp" target="_blank" data-smartkarma-citation="entities:18857:1" rel="noopener">Fdk Corp (6955 JP)</a></strong>, of which Fujitsu owns 58.8% went limit up before coming off and ending up 11.8% on the day. </li>
<li>
<strong><a href="https://www.smartkarma.com/entities/fujitsu-general-ltd" target="_blank" data-smartkarma-citation="entities:2025:1" rel="noopener">Fujitsu General (6755 JP)</a></strong>, air-conditioner and electronic equipment maker of which  Fujitsu owns 42.2% of shares out. That stock was up 17.5% intraday but closed +7.0%.</li>
<li>
<strong><a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a></strong>, which makes packaging and substrates for the back end of the semiconductor industry is 50.00% owned by Fujitsu, was up 24.3% intraday but closed up 16.4% by day end.</li>
<li>
<strong><a href="https://www.smartkarma.com/entities/fujitsu-frontech-ltd" target="_blank" data-smartkarma-citation="entities:17089:1" rel="noopener">Fujitsu Frontech (6945 JP)</a></strong>, which makes the machinery inside ATMs and also provides ATM solutions, sensors (RFID and fingerprint), etc is a small-cap which is 53.2% owned by Fujitsu. This stock traded a lot of volume, and was up 27% - limit up - at the end of the day.</li>
</ul><p>The language of the headline and other articles which reported on the stock price moves suggest that the "speculation" is that Fujitsu will follow in the footsteps of <a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" data-smartkarma-citation="entities:7797:1" rel="noopener">Hitachi Ltd (6501 JP)</a> which has not so secretly put up some of its listed subs such as <a href="https://www.smartkarma.com/entities/hitachi-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:14457:1" rel="noopener">Hitachi Chemical (4217 JP)</a> and <a href="https://www.smartkarma.com/entities/hitachi-high-technologies-co" target="_blank" data-smartkarma-citation="entities:7046:1" rel="noopener">Hitachi High Technologies Co (8036 JP)</a> for sale, and Toshiba which launched Tender Offers for three out of its four listed subs <a href="https://www.smartkarma.com/entities/toshiba-plant-systems-services-corporation" target="_blank" data-smartkarma-citation="entities:15976:1" rel="noopener">Toshiba Plant Systems &amp; Services (1983 JP)</a>, <a href="https://www.smartkarma.com/entities/nishishiba-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:6193:1" rel="noopener">Nishishiba Electric (6591 JP)</a>, and <a href="https://www.smartkarma.com/entities/nuflare-technology-inc" target="_blank" data-smartkarma-citation="entities:9635:1" rel="noopener">Nuflare Technology (6256 JP)</a>, leaving out <a href="https://www.smartkarma.com/entities/toshiba-tec-corp" target="_blank" data-smartkarma-citation="entities:17697:1" rel="noopener">Toshiba Tec (6588 JP)</a>) last month.</p><p>However, what we have for now is a headline of an article in a magazine known more for its after-the-fact political-business relationship reporting than M&amp;A reporting. What is surprising to me is that we have, for the moment, no "official" comment at the TSE from any of the five companies. Nikkei QUICK asked Fujitsu for their comment on the Sentaku story, and the comment was 「現時点で具体的な話は何も決まっていない」or <em>"At the moment, nothing concrete has been decided."</em> Every major Japanese media story specifically used the words "speculative buying."</p>

On Wednesday, partway through the day, it was discovered that the website of a relatively obscure Japanese "business and politics" monthly magazine which works off a kind of "membership system" called Sentaku (選択) carried an article about Fujitsu Ltd (6702 JP) and its listed subs. I have not read the article - no access - but the headline suggests...Fujitsu too is studying the elimination of parent-subsidiary dual listings, a process which could start at earliest within this fiscal year. That sent Fujitsu's listed subs higher on the day.
Battery and components maker, Fdk Corp (6955 JP), of which Fujitsu owns 58.8% went limit up before coming off and ending up 11.8% on the day. 

Fujitsu General (6755 JP), air-conditioner and electronic equipment maker of which  Fujitsu owns 42.2% of shares out. That stock was up 17.5% intraday but closed +7.0%.

Shinko Electric Industries (6967 JP), which makes packaging and substrates for the back end of the semiconductor industry is 50.00% owned by Fujitsu, was up 24.3% intraday but closed up 16.4% by day end.

Fujitsu Frontech (6945 JP), which makes the machinery inside ATMs and also provides ATM solutions, sensors (RFID and fingerprint), etc is a small-cap which is 53.2% owned by Fujitsu. This stock traded a lot of volume, and was up 27% - limit up - at the end of the day.
The language of the headline and other articles which reported on the stock price moves suggest that the "speculation" is that Fujitsu will follow in the footsteps of Hitachi Ltd (6501 JP) which has not so secretly put up some of its listed subs such as Hitachi Chemical (4217 JP) and Hitachi High Technologies Co (8036 JP) for sale, and Toshiba which launched Tender Offers for three out of its four listed subs Toshiba Plant Systems &amp; Services (1983 JP), Nishishiba Electric (6591 JP), and Nuflare Technology (6256 JP), leaving out Toshiba Tec (6588 JP)) last month.However, what we have for now is a headline of an article in a magazine known more for its after-the-fact political-business relationship reporting than M&amp;A reporting. What is surprising to me is that we have, for the moment, no "official" comment at the TSE from any of the five companies. Nikkei QUICK asked Fujitsu for their comment on the Sentaku story, and the comment was 「現時点で具体的な話は何も決まっていない」or "At the moment, nothing concrete has been decided." Every major Japanese media story specifically used the words "speculative buying."

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

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<p>Total short notional in Taiwan stocks is TWD 258,516 mm (~US$8.46 bn) as of 22 November.</p>
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<p>Over the week, the largest short positions were put on in <a href="https://www.smartkarma.com/entities/genius-electronic-optical-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:9632:1">Genius Electronic Optical (3406 TT)</a>, <a href="https://www.smartkarma.com/entities/hiwin-technologies-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:6797:1">Hiwin Technologies (2049 TT)</a>, <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:6450:1">United Microelectronics Corp (2303 TT)</a> and <a href="https://www.smartkarma.com/entities/bizlink-holding-inc" target="_blank" rel="noopener" data-smartkarma-citation="entities:6779:1">Bizlink Holding (3665 TT)</a> and shorts were covered in <a href="https://www.smartkarma.com/entities/macronix-international" target="_blank" rel="noopener" data-smartkarma-citation="entities:3247:1">Macronix International (2337 TT)</a>, <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:12852:1">Pegatron Corp (4938 TT)</a>, <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:10904:1">Novatek Microelectronics Corp (3034 TT)</a> and <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" rel="noopener" data-smartkarma-citation="entities:13212:1">Yageo Corporation (2327 TT)</a>.   <a href="https://www.smartkarma.com/entities/largan-precision-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:9126:1"></a></p>
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<p>The largest short positions as a percentage of free float are <a href="https://www.smartkarma.com/entities/precision-silicon-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:18158:1">Precision Silicon (3016 TT)</a>, <a href="https://www.smartkarma.com/entities/young-optics-inc" target="_blank" rel="noopener" data-smartkarma-citation="entities:7295:1">Young Optics (3504 TT)</a>, <a href="https://www.smartkarma.com/entities/taisol-electronics-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:7383:1">Taisol Electronics (3338 TT)</a> and <a href="https://www.smartkarma.com/entities/jmc-electronics-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:28188:1">JMC Electronics Co Ltd (6552 TT)</a> <a href="https://www.smartkarma.com/entities/walsin-technology-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:11084:1"></a>while the large cap stocks with the highest days to cover are <a href="https://www.smartkarma.com/entities/yulon-motor-company" target="_blank" rel="noopener" data-smartkarma-citation="entities:18249:1">Yulon Motor Company (2201 TT)</a>, <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:6704:1">Au Optronics (2409 TT)</a>, <a href="https://www.smartkarma.com/entities/china-synthetic-rubber" target="_blank" rel="noopener" data-smartkarma-citation="entities:2403:1">China Synthetic Rubber (2104 TT)</a> and <a href="https://www.smartkarma.com/entities/highwealth-construction-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:6739:1">Highwealth Construction (2542 TT)</a>.   <a href="https://www.smartkarma.com/entities/china-synthetic-rubber" target="_blank" rel="noopener" data-smartkarma-citation="entities:2403:1"></a></p>
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<p>We also look at the stocks that have seen the biggest percentage change in short interest over the week to try and identify short seller targets.</p>
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Total short notional in Taiwan stocks is TWD 258,516 mm (~US$8.46 bn) as of 22 November.


Over the week, the largest short positions were put on in Genius Electronic Optical (3406 TT), Hiwin Technologies (2049 TT), United Microelectronics Corp (2303 TT) and Bizlink Holding (3665 TT) and shorts were covered in Macronix International (2337 TT), Pegatron Corp (4938 TT), Novatek Microelectronics Corp (3034 TT) and Yageo Corporation (2327 TT).   


The largest short positions as a percentage of free float are Precision Silicon (3016 TT), Young Optics (3504 TT), Taisol Electronics (3338 TT) and JMC Electronics Co Ltd (6552 TT) while the large cap stocks with the highest days to cover are Yulon Motor Company (2201 TT), Au Optronics (2409 TT), China Synthetic Rubber (2104 TT) and Highwealth Construction (2542 TT).   


We also look at the stocks that have seen the biggest percentage change in short interest over the week to try and identify short seller targets.


Taiwan

Jentech Precision Industrial Company Ltd. provides tooling, precision metal stamping, custom insert molding, injection molding, and assembly solutions for medical, consumer electronics, semiconductor, automotive, appliance, and micro electronic markets to a wide variety of industries.

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Jentech Precision Industrial (3653 TT)

Fujitsu Subsidiary Selldowns or Buy-Ins?

On Wednesday, partway through the day, it was discovered that the website of a relatively obscure Japanese "business and politics" monthly magazine...

Travis Lundy

Taiwan - Shorts Like These Stocks

Total short notional in Taiwan stocks is TWD 258,516 mm (~US$8.46 bn) as of 22 November. Over the week, the largest short positions were put on...

Brian Freitas

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