Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In May 2023, <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> announced a ¥300bn buyback program, did nothing for two months, then announced a Tender Offer Buyback to buy shares from Toyota. </li>
<li>Toyota had increased its stake years before, then KDDI bought back shares from others, so Toyota was backing its ownership down. I discussed the relationships, history, etc, <a href="https://www.smartkarma.com/insights/kddi-9433-own-share-tender-offer-toyota-to-sell-gasp" target="_blank" rel="noopener">here</a>.</li>
<li>This year, KDDI announced Friday with earnings that is buying back another large stake from Toyota. </li>
</ul>


In May 2023, KDDI Corp (9433 JP) announced a ¥300bn buyback program, did nothing for two months, then announced a Tender Offer Buyback to buy shares from Toyota. 
Toyota had increased its stake years before, then KDDI bought back shares from others, so Toyota was backing its ownership down. I discussed the relationships, history, etc, here.
This year, KDDI announced Friday with earnings that is buying back another large stake from Toyota. 


KDDI (9433) - Own Share Tender Offer, Toyota To Sell (Gasp!) Redux (Another Buyback in H2 Possible)

<ul>
<li>Last September in the release of its new Mid-Term Management Plan, Toyota Group member <a href="https://www.smartkarma.com/entities/aisin-corp" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin (7259 JP)</a> announced a plan to cut cross-holdings to zero. <a href="https://www.smartkarma.com/entities/jtekt-corp" target="_blank" data-smartkarma-citation="entities:12197:1" rel="noopener">JTEKT Corp (6473 JP)</a> followed suit.</li>
<li>It started with a selldown of <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a>, then <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a>, now <a href="https://www.smartkarma.com/insights/big-aisin-7259-offering-sets-stage-for-first-toyota-group-full-unwind" target="_blank" rel="noopener">Aisin</a>. Last FY, Toyota Group cos reduced crossholdings by ¥870bn. This year will be more.</li>
<li>Attached below is a general breakdown of Toyota Group cross-holdings, discussion of cross-holding policies, and analysis of what is next, and what is not.</li>
</ul>


Last September in the release of its new Mid-Term Management Plan, Toyota Group member Aisin (7259 JP) announced a plan to cut cross-holdings to zero. JTEKT Corp (6473 JP) followed suit.
It started with a selldown of Denso Corp (6902 JP), then Toyota Industries (6201 JP), now Aisin. Last FY, Toyota Group cos reduced crossholdings by ¥870bn. This year will be more.
Attached below is a general breakdown of Toyota Group cross-holdings, discussion of cross-holding policies, and analysis of what is next, and what is not.


Toyota Group Cross-Holding Structure Primer - Holdings, Unwind Progress, Buyback Policies, Etc

<a href="https://www.smartkarma.com/entities/gree-inc" target="_blank" data-smartkarma-citation="entities:17135:1" rel="noopener">Gree Inc (3632 JP)</a> is an online media business and game developer (Switch and Facebook Messenger) and does a hodgepodge of other businesses. It has its good points, but nobody would call it a category killer or call it dominant in any way. And the stock has had a somewhat lacklustre 10 years. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/890/original/Screenshot+2021-09-30+at+9.05.23+PM.png?1633007148" class="editor-image img-responsive" data-smartkarma-image-id="232890"></figure></section>But it has its strong points, and it announced the exercise of one of those today.More below the fold.

Gree Inc (3632 JP) is an online media business and game developer (Switch and Facebook Messenger) and does a hodgepodge of other businesses. It has its good points, but nobody would call it a category killer or call it dominant in any way. And the stock has had a somewhat lacklustre 10 years. But it has its strong points, and it announced the exercise of one of those today.More below the fold.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Following up on our earlier cross-shareholding work, in this note we look to summarize our work so far by looking at where most of the selling will likely come.</li>
<li>Of the seven companies that we have looked at so far, collectively they have around US$102bn worth of shares to sell in 118 companies. </li>
<li>Of these, they have a combined stake of over US$1bn in 23 companies.</li>
</ul>


Following up on our earlier cross-shareholding work, in this note we look to summarize our work so far by looking at where most of the selling will likely come.
Of the seven companies that we have looked at so far, collectively they have around US$102bn worth of shares to sell in 118 companies. 
Of these, they have a combined stake of over US$1bn in 23 companies.


Japan Cross-Shareholding - Summary Matrix - Over US$100bn of Selling in 118 Companies

<ul>
<li>With <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota (7203 JP)</a> having sold some of its stake in <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso</a>, <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI</a> and <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive</a> this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.</li>
<li>Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


With Toyota (7203 JP) having sold some of its stake in Denso, KDDI and Harmonic Drive this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.
Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Japan

Softbank Corporation provides mobile phone telecommunication and networking services. The Company offers mobile communication opening, short messaging function opening, video function opening, and other services. Softbank also provides mobile phones.

SoftBank Group Corp. provides telecommunication services. The Company also operates ADSL (Asymmetric Digital Subscriber Line) and fiber optic high-speed Internet connection, e-Commerce businesses, and Internet based advertising and auction businesses.

OKINAWA CELLULAR TELEPHONE COMPANY provides cellular and car phone services in Okinawa Prefecture.  The Company also sells cellular phones and accessories.

Nippon Telegraph and Telephone Corporation provides a variety of telecommunication services, including telephone, telegraph, leased circuits, data communication, terminal equipment sales, and related services. The Company provides both local and long distance telephone services within Japan.

NTT (Nippon Telegraph & Telephone) (9432 JP)

Japan Communications Inc. provides telecommunication services to corporate clients.  The Company also provides wireless high-speed internet access mainly to consumers.

Nintendo Co., Ltd. globally develops, manufactures and sells home-use video game hardware and software in home entertainment business.  The company also produces home-game products including cards.

USEN-NEXT HOLDINGS Co.,Ltd. provides network information services. The Company provides video contents distribution, music contents distribution, and other services. USEN-NEXT HOLDINGS also provides internet agency, mobile communication, and other services.

LY Corporation operates as an internet search engine "Yahoo! JAPAN". The Company provides electronic commerce and settlement finance services for small medium enterprises and individuals. LY also operates media business including search linked advertising and display advertising services.

ARTERIA Networks Corporation provides telecommunication services. The Company offers internet connection, virtual private network construction, colocation, mobile connection, mobile device management, optical fiber network construction, and other services.

WirelessGate, Inc. provides wireless communication services including Wi-Fi, WiMAX, and LTE for end users at train stations, airports, retail outlets, restaurants and other locations. It provides broadband services through agreements with public LAN, Wifi hotspots and other third-party networks, and its application allows users to access Wifi hotspots from multiple providers.

America Movil SAB de C.V. provides wireless communications in 18 countries across Latin America, the Caribbean and the U.S. The company also offers fixed-line phone, Internet and pay-TV services in most parts of the region.

America Movil SAB de C.V. provides telecommunications services. The Company offers wireless and fixed voice services, including airtime, local, domestic, international long-distance, and broadband services. America Movil serves customers worldwide.

Vodafone Group PLC is a mobile telecommunications company providing a range of services, including voice and data communications.  The Company operates in Continental Europe, the United Kingdom, the United States, Asia Pacific, Africa and the Middle East through its subsidiaries, associates, and investments.

Advanced Info Service Public Company Limited is granted a 25-year concession expiring the year 2015 by the Telephone Organization of Thailand to provide cellular phone services.  The Company provides analog mobile phone services through the Nordic Mobile Telephone (NMT900) network, and digital phone services through the Global Systems for Mobile Communication (GSM) network.

Bharti Airtel Limited, a part of Bharti Enterprises, provides telecommunications services throughout India. The Company provides GSM Mobile Services, broadband, fixed line telephone services, long distance services (international & national) and enterprise services.

China United Network Communications Limited provides a variety of telecommunication services, including GSM and CDMA wireless telecommunication services, international and domestic long distance communication services, data communication and Internet services, as well as paging services.

Rogers Communications, Inc. is a diversified Canadian communications and media company. The Company's activities include wireless voice and data communications services over its national GSM, HSPA and LTE networks; cable television, telephony and high speed Internet access services over its broadband networks; and radio and TV broadcasting, televised shopping, magazines, and sports.

Taiwan Mobile Co., Ltd. provides cellular telecommunication services in Taiwan. The Company also sells and leases cellular phones.

Vodafone Idea Limited operates as a telecom service provider. The Company offers 2G, 3G, and 4G mobile services, as well as mobile payments, advanced enterprise offerings, and entertainment. Vodafone Idea serves customers in India.

Vodacom Group Limited operates a cellular telephone network in South Africa. The Company has mobile operations in Tanzania, Mozambique, Lesotho and the Democratic Republic of Congo.

KDDI CORPORATION provides mobile communication services and sells mobile devices.  The Company also is a broadband provider.

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KDDI Corp (9433 JP)

Toyota Group Cross-Holding Structure Primer - Holdings, Unwind Progress, Buyback Policies, Etc

8mos past the first large Toyota Group selldown in Denso (i.e. past lockup). Others have followed since. Toyota Inds and Toyota R.E. have ¥600bn to...

Travis Lundy

Greeeee... Wheeeee.....!

Gree is not a great gaming stock, and not a great online media stock. But it IS cheap. It has a huge amount of cash, and an interesting VC...

Travis Lundy

Japan Cross-Shareholding - Summary Matrix - Over US$100bn of Selling in 118 Companies

In this note we summarize our work by looking at where most of the selling will likely come. Of the companies that we have looked, collectively...

Sumeet Singh

Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Toyota, Toyota Industries and Denso are tag teaming to unwind some of their stake in Aisin, in a deal worth over US$1bn. While the timing of the...

Sumeet Singh

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KDDI (9433) - Own Share Tender Offer, Toyota To Sell (Gasp!) Redux (Another Buyback in H2 Possible)

KDDI announced bad earnings, good forecast, and a big buyback (from Toyota again). Q2 will see on-market buyback impact. KDDI is cheap vs Softbank...

Travis Lundy

Toyota Group Cross-Holding Structure Primer - Holdings, Unwind Progress, Buyback Policies, Etc

8mos past the first large Toyota Group selldown in Denso (i.e. past lockup). Others have followed since. Toyota Inds and Toyota R.E. have ¥600bn to...

Travis Lundy

Greeeee... Wheeeee.....!

Gree is not a great gaming stock, and not a great online media stock. But it IS cheap. It has a huge amount of cash, and an interesting VC...

Travis Lundy

Japan Cross-Shareholding - Summary Matrix - Over US$100bn of Selling in 118 Companies

In this note we summarize our work by looking at where most of the selling will likely come. Of the companies that we have looked, collectively...

Sumeet Singh

Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Toyota, Toyota Industries and Denso are tag teaming to unwind some of their stake in Aisin, in a deal worth over US$1bn. While the timing of the...

Sumeet Singh