Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today after the close with <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One Inc (2412 JP)</a> reporting earnings, <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> announced a Partial Tender Offer to buy 81.21-83.31mm shares of Benefit One at ¥1600/share.</li>
<li>That cleans out Pasona, which owns 81.21mm shares. Or does it... Shareholder structure dynamics and the problems they cause later bear some detailed examination. </li>
<li>This one is going to be a fun special sit.</li>
</ul>


Today after the close with Benefit One Inc (2412 JP) reporting earnings, M3 Inc (2413 JP) announced a Partial Tender Offer to buy 81.21-83.31mm shares of Benefit One at ¥1600/share.
That cleans out Pasona, which owns 81.21mm shares. Or does it... Shareholder structure dynamics and the problems they cause later bear some detailed examination. 
This one is going to be a fun special sit.


Big M3 (2413) Partial TOB As Pasona Sells Control of Benefit One (2412): Really Interesting Dynamics

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jmdc-inc" target="_blank" data-smartkarma-citation="entities:28673:1" rel="noopener">JMDC (4483 JP)</a> announced a partial tender offer for <a href="https://www.smartkarma.com/entities/omron-corp" target="_blank" data-smartkarma-citation="entities:15904:1" rel="noopener">Omron Corp (6645 JP)</a>, the largest shareholder. Omron aims to make JMDC a consolidated subsidiary.  </li>
<li>The offer is for a minimum of 12.0m shares (18.52% ownership ratio) and a maximum of 15.0m shares (23.08%) at JPY5,700 per share, a 22.4% premium to the undisturbed price.</li>
<li>Irrevocables (<a href="https://www.smartkarma.com/entities/noritsu-koki-co-ltd" target="_blank" data-smartkarma-citation="entities:3091:1" rel="noopener">Noritsu Koki (7744 JP)</a>) represent a 13.63% ownership ratio. While the offer is light, it will likely succeed as the minimum acceptance condition requires a 7.1% minority acceptance rate. </li>
</ul>



JMDC (4483 JP) announced a partial tender offer for Omron Corp (6645 JP), the largest shareholder. Omron aims to make JMDC a consolidated subsidiary.  
The offer is for a minimum of 12.0m shares (18.52% ownership ratio) and a maximum of 15.0m shares (23.08%) at JPY5,700 per share, a 22.4% premium to the undisturbed price.
Irrevocables (Noritsu Koki (7744 JP)) represent a 13.63% ownership ratio. While the offer is light, it will likely succeed as the minimum acceptance condition requires a 7.1% minority acceptance rate. 


JMDC (4483 JP): Omron’s Partial Tender Offer

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>
OVERSEAS. US Yields spike to hit 16 year high; Stocks rise SPX closed +0.7% with Tech leading; China woes continue as forecasts cut; NVDIA and TSLA rebound on street optimism</li>
<li>
JAPAN.  NKY Futures +0.7% vs Cash; USDJPY 146.2;  BOJ on pace to buy record amt of bonds under new YCC regime;  Foreigners unloading JGBs; Japan DX market &gt; 2trn yen</li>
<li>
Japan X.  Flying Cars - investments pouring into the space globally. Skydrive, Japan's Flying Car beacon bearer, partners with Suzuki to to push the boundries in the space.  </li>
</ul>



OVERSEAS. US Yields spike to hit 16 year high; Stocks rise SPX closed +0.7% with Tech leading; China woes continue as forecasts cut; NVDIA and TSLA rebound on street optimism

JAPAN.  NKY Futures +0.7% vs Cash; USDJPY 146.2;  BOJ on pace to buy record amt of bonds under new YCC regime;  Foreigners unloading JGBs; Japan DX market &gt; 2trn yen

Japan X.  Flying Cars - investments pouring into the space globally. Skydrive, Japan's Flying Car beacon bearer, partners with Suzuki to to push the boundries in the space.  


Ohayo Japan|Yields Spike and Stocks UP?! Japan X: Flying Cars-Suzuki and SkyDrive's Aerial Ambitions

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> reported 1QFY03/2024 results on Friday. Revenue increased 0.7% YoY to ¥57.4bn (vs consensus ¥58.1bn) while OP decreased 3.7% YoY to ¥18.0bn (vs consensus ¥18.1bn).</li>
<li>Overseas revenue growth further slowed down to 5.3% despite the company expecting overseas business growth to help offset slowdown in pharma marketing business going forward.</li>
<li>This proves that m3’s long list of M&amp;A’s have not been really successful as we have not observed any meaningful growth from these new acquisitions.</li>
</ul>



M3 Inc (2413 JP) reported 1QFY03/2024 results on Friday. Revenue increased 0.7% YoY to ¥57.4bn (vs consensus ¥58.1bn) while OP decreased 3.7% YoY to ¥18.0bn (vs consensus ¥18.1bn).
Overseas revenue growth further slowed down to 5.3% despite the company expecting overseas business growth to help offset slowdown in pharma marketing business going forward.
This proves that m3’s long list of M&amp;A’s have not been really successful as we have not observed any meaningful growth from these new acquisitions.


M3: Weak Earnings and Overseas Business Further Slows Down

<ul>
<li>M3’s share price dropped around 9% after 4QFY03/2023 earnings, however, it went up by more than 8% since then following the announcement regarding the acquisition of Kantar’s healthcare research businesses.</li>
<li>Our estimates suggest that new acquisition would not contribute to any meaningful growth in the near term. Despite having large no. of M&amp;A deals, growth rates have started to fall.</li>
<li>We think there is further downside to <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> 's consensus FY+2 earnings estimates and we would recommend shorting the stock.</li>
</ul>


M3’s share price dropped around 9% after 4QFY03/2023 earnings, however, it went up by more than 8% since then following the announcement regarding the acquisition of Kantar’s healthcare research businesses.
Our estimates suggest that new acquisition would not contribute to any meaningful growth in the near term. Despite having large no. of M&amp;A deals, growth rates have started to fall.
We think there is further downside to M3 Inc (2413 JP) 's consensus FY+2 earnings estimates and we would recommend shorting the stock.


M3: Growth Slowing Down Despite Long List of M&As Continuing

Japan

M3, Inc. supplies medical information services for doctors through the Internet. The Company also supports marketing of pharmaceutical companies and medical equipment manufacturers.

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M3 Inc (2413 JP)

Big M3 (2413) Partial TOB As Pasona Sells Control of Benefit One (2412): Really Interesting Dynamics

Investors have pestered Pasona to bail on Benefit One for years. Now down 80% from highs two years ago, it is doing so. M3 is launching a tender to...

Travis Lundy

JMDC (4483 JP): Omron’s Partial Tender Offer

While the offer is light, it will succeed as the minimum acceptance condition requires a low 7.1% minority acceptance rate. The tender offer runs...

Arun George

Ohayo Japan|Yields Spike and Stocks UP?! Japan X: Flying Cars-Suzuki and SkyDrive's Aerial Ambitions

Yields Spike and Stocks Up?! Huh? NKY Futures +0.7% vs Cash; USDJPY 146.2; BOJ on pace to buy record amt of bonds under new YCC regime; ...

Mark Chadwick

M3: Weak Earnings and Overseas Business Further Slows Down

1QFY24 earnings below consensus. Overseas revenue growth has dropped to mid-singles despite m3 having an extended list of M&As. With pharma mktg...

Shifara Samsudeen, ACMA, CGMA

M3: Growth Slowing Down Despite Long List of M&As Continuing

m3's shares have been up 8% the last few weeks and the company also announced acquisition of Kantar's healthcare assets. Despite having a long list...

Shifara Samsudeen, ACMA, CGMA

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