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/nikkiso-co-ltd" target="_blank" data-smartkarma-citation="entities:6272:1" rel="noopener">Nikkiso Co Ltd (6376 JP)</a> announced an unusual buyback today. It is worth paying attention. </li>
<li>In March, Nikkiso announced the sale of a subsidiary to <a href="https://www.smartkarma.com/entities/atlas-copco-ab" target="_blank" data-smartkarma-citation="entities:22282:1" rel="noopener">Atlas Copco AB (ATCOA SS)</a>, noting the sale proceeds would used to pay down debt (Debt/EBITDA in high single digits).</li>
<li>The company today announced Q2 earnings, and a large buyback, which should be taken as a positive surprise given the debt load. </li>
</ul>



Nikkiso Co Ltd (6376 JP) announced an unusual buyback today. It is worth paying attention. 
In March, Nikkiso announced the sale of a subsidiary to Atlas Copco AB (ATCOA SS), noting the sale proceeds would used to pay down debt (Debt/EBITDA in high single digits).
The company today announced Q2 earnings, and a large buyback, which should be taken as a positive surprise given the debt load. 


Nikkiso (6376 JP) BIG Asset Sale Leads to Biggish Buyback

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.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/phc-holdings-corp" target="_blank" data-smartkarma-citation="entities:34198:1" rel="noopener">PHC Holdings (6523 JP)</a> is a leading diversified diagnostic, life sciences and medical device company serving global markets. PHC shareholders include <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> (owns 48.0% of PHC), <a href="https://www.smartkarma.com/entities/mitsui-co-ltd" target="_blank" data-smartkarma-citation="entities:20799:1" rel="noopener">Mitsui &amp; Co Ltd (8031 JP)</a> (21.1%), Life Science Institute (13.2%) and <a href="https://www.smartkarma.com/entities/panasonic-corp" target="_blank" data-smartkarma-citation="entities:222:1" rel="noopener">Panasonic Corp (6752 JP)</a> (11.3%).</p></div><div><p>At the indicative price of JPY3,700 per share, PHC will have a market cap of JPY452 billion (US$4.1 billion). PHC plans to raise JPY172 billion ($1.57 billion) by offering 5.8 million primary shares (JPY22 billion raise) and 40.7 million secondary shares (JPY150 billion raise). </p></div><div><div>
<p>In <a href="https://www.smartkarma.com/insights/phc-holdings-ipo-initiation-sugar-high" target="_blank" data-smartkarma-citation="insights:57915" rel="noopener">PHC Holdings IPO Initiation: Sugar High</a>, we opined that at first glance, PHC offers solid growth, stable and healthy margins along with solid cash generation. However, on an organic basis, the revenue has declined in each of the last two financial years. The strong growth in the recent first quarter was largely due to low comps and an unsustainable revenue boost from COVID-19 related products. We concluded that PHC’s fundamentals are mixed and we are inclined to watch this IPO from the sidelines.</p>
<div class="content-highlight"><p>Our valuation analysis suggests that PHC is fully valued at the indicative price. In combination with the mixed fundamentals, we would pass on the IPO. </p></div>
</div></div>

PHC Holdings (6523 JP) is a leading diversified diagnostic, life sciences and medical device company serving global markets. PHC shareholders include KKR &amp; Co Inc (KKR US) (owns 48.0% of PHC), Mitsui &amp; Co Ltd (8031 JP) (21.1%), Life Science Institute (13.2%) and Panasonic Corp (6752 JP) (11.3%).At the indicative price of JPY3,700 per share, PHC will have a market cap of JPY452 billion (US$4.1 billion). PHC plans to raise JPY172 billion ($1.57 billion) by offering 5.8 million primary shares (JPY22 billion raise) and 40.7 million secondary shares (JPY150 billion raise). 
In PHC Holdings IPO Initiation: Sugar High, we opined that at first glance, PHC offers solid growth, stable and healthy margins along with solid cash generation. However, on an organic basis, the revenue has declined in each of the last two financial years. The strong growth in the recent first quarter was largely due to low comps and an unsustainable revenue boost from COVID-19 related products. We concluded that PHC’s fundamentals are mixed and we are inclined to watch this IPO from the sidelines.
Our valuation analysis suggests that PHC is fully valued at the indicative price. In combination with the mixed fundamentals, we would pass on the IPO. 


'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Thematic (Sector/Industry)

<div><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p></div><div>
<p>Our best and worst pairing from yesterday's announcements is <a href="https://www.smartkarma.com/entities/oisix-ra-daichi-inc" target="_blank" data-smartkarma-citation="entities:10145:1" rel="noopener">Oisix ra daichi (3182 JP)</a> and <a href="https://www.smartkarma.com/entities/nikkiso-co-ltd" target="_blank" data-smartkarma-citation="entities:6272:1" rel="noopener">Nikkiso (6376 JP).</a></p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/166/825/original/2020-10-23_06-19-12.png?1603401664" class="editor-image img-responsive" data-smartkarma-image-id="166825"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/166/826/original/2020-10-23_06-20-11.png?1603401680" class="editor-image img-responsive" data-smartkarma-image-id="166826"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div></section><hr>
<p style="text-align: center;"><strong>DAILY STATS</strong></p>
</div><hr><div><p style="text-align: center;"><strong>8 Quarterly Results</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Results Score:</strong> 38% Positive / 0% Neutral / 63% Negative</p></li>
<li><p><strong>Average Results Score Change:</strong> -3.0 points</p></li>
<li><p><strong>Average % Change in Revenue:</strong> -5.3% Quarter YoY / -1.4% Rolling TTM YoY </p></li>
<li><p><strong>Average Operating Profit Margin Change:</strong> -2.3ppt</p></li>
<li><p><strong>Percentage Making Quarterly Losses:</strong> 25%</p></li>
</ul></div><hr><div><p style="text-align: center;"><strong>16 Annual • 15 Interim Forecasts/Revisions</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Annual Forecast/Revision Score:</strong> 31% Positive / 6% Neutral / 63% Negative</p></li>
<li><p><strong>Interim Forecast/Revision Score Change:</strong> 53% Positive / 7% Neutral / 40% Negative</p></li>
<li><p><strong>Average Forecast/Revision Score Change:</strong> -0.7 points</p></li>
</ul></div>

• BEST &amp; WORST •
Our best and worst pairing from yesterday's announcements is Oisix ra daichi (3182 JP) and Nikkiso (6376 JP).
Source for all charts &amp; tables: Japan Analytics
DAILY STATS
8 Quarterly Results
Results Score: 38% Positive / 0% Neutral / 63% Negative
Average Results Score Change: -3.0 points
Average % Change in Revenue: -5.3% Quarter YoY / -1.4% Rolling TTM YoY 
Average Operating Profit Margin Change: -2.3ppt
Percentage Making Quarterly Losses: 25%
16 Annual • 15 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 31% Positive / 6% Neutral / 63% Negative
Interim Forecast/Revision Score Change: 53% Positive / 7% Neutral / 40% Negative
Average Forecast/Revision Score Change: -0.7 points


🇯🇵 JAPAN • Results & Revisions 10/​​​​​​​​​​​​​​​22 -Chugai, Disco, Benefit One [& Pasona], Oisix

Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

<p>We know that historically there has been a lot of leakage leading into Earnings Season. In a different life, I remember Fuji Photo calling me in and given me a preview of the earnings results 2 weeks before the actual announcement. It may not happen as much now in the large-cap space, so we took a look at the small-cap space with very little coverage to see if there are movements in consensus.</p>

We know that historically there has been a lot of leakage leading into Earnings Season. In a different life, I remember Fuji Photo calling me in and given me a preview of the earnings results 2 weeks before the actual announcement. It may not happen as much now in the large-cap space, so we took a look at the small-cap space with very little coverage to see if there are movements in consensus.

Japanese Small-Cap Names with Consensus Changes Leading into Earning Season....

Japan TMT Analyst

Pelham Smithers

Market Intel on Asian Tech with a Japan focus

Pelham Smithers Associates

Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods. 

Research is provided by the following:
Pelham Smithers: Macro, consumer electronics, telecoms & pharma
Joel Scheiman: Electronics materials / components
Julie Boote: Autos
Will Nestuk: Capital goods, machinery & transportation equipment parts
Thao Nguyen: eCommerce, internet content, marketing & advertising

<p>The suggestion of government orchestration against <a href="https://www.smartkarma.com/entities/8979" target="_blank" data-smartkarma-citation="entities:8979:1">Ono</a>’s immunotherapy treatment Opdivo (nivolumab) has moved a stage further with a report in the Nikkei that the Japanese Health Ministry is considering setting rules on new drug usage during this fiscal year, starting with <a href="https://www.smartkarma.com/entities/8979" target="_blank" data-smartkarma-citation="entities:8979:1">Ono</a>’s Opdivo and <a href="https://www.smartkarma.com/entities/6091" target="_blank" data-smartkarma-citation="entities:6091">Astellas</a>’s Repatha. Patients may be limited to those who can see certain impact from the treatment, which in turn would mean the drug could only be prescribed at those institutions with the facilities to check…</p>

The suggestion of government orchestration against Ono’s immunotherapy treatment Opdivo (nivolumab) has moved a stage further with a report in the Nikkei that the Japanese Health Ministry is considering setting rules on new drug usage during this fiscal year, starting with Ono’s Opdivo and Astellas’s Repatha. Patients may be limited to those who can see certain impact from the treatment, which in turn would mean the drug could only be prescribed at those institutions with the facilities to check…

Opdivo Singled Out in Government Rule Change

Japan

NIKKISO CO., LTD. operates industrial and medical business.  Industrial business includes manufacturing industrial pumps such as non-seal, metering, and cryogenic pumps while medical, manufacturing water conditioning systems for power plant and aerospace composite components.  Medical business includes manufacturing Hemodialysis machine and related devices.

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Nikkiso Co Ltd (6376 JP)

Nikkiso (6376 JP) BIG Asset Sale Leads to Biggish Buyback

Nikkiso announced the sale of a sub in March and pre-announced planned use of proceeds to pay down debt. Today they announced a buyback. Expect...

Travis Lundy

PHC Holdings IPO: Valuation Insights

Our valuation analysis suggests that PHC is fully valued at the indicative price. In combination with the mixed fundamentals, we would pass on the...

Arun George

🇯🇵 JAPAN • Results & Revisions 10/22 -Chugai, Disco, Benefit One [& Pasona], Oisix

Our best and worst pairing from yesterday's announcements is Oisix ra daichi (3182 JP) and Nikkiso (6376 JP).____________

Campbell Gunn

Japanese Small-Cap Names with Consensus Changes Leading into Earning Season....

We know that historically there has been a lot of leakage leading into Earnings Season. In a different life, I remember Fuji Photo calling me in...

Custom Products Group

Opdivo Singled Out in Government Rule Change

The suggestion of government orchestration against Ono’s immunotherapy treatment Opdivo (nivolumab) has moved a stage further with a report in the...

Pelham Smithers Associates

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Nikkiso (6376 JP) BIG Asset Sale Leads to Biggish Buyback

Nikkiso announced the sale of a sub in March and pre-announced planned use of proceeds to pay down debt. Today they announced a buyback. Expect...

Travis Lundy

PHC Holdings IPO: Valuation Insights

Our valuation analysis suggests that PHC is fully valued at the indicative price. In combination with the mixed fundamentals, we would pass on the...

Arun George

🇯🇵 JAPAN • Results & Revisions 10/​​​​​​​​​​​​​​​22 -Chugai, Disco, Benefit One [& Pasona], Oisix

Our best and worst pairing from yesterday's announcements is Oisix ra daichi (3182 JP) and Nikkiso (6376 JP).____________

Campbell Gunn

Japanese Small-Cap Names with Consensus Changes Leading into Earning Season....

We know that historically there has been a lot of leakage leading into Earnings Season. In a different life, I remember Fuji Photo calling me in...

Custom Products Group

Opdivo Singled Out in Government Rule Change

The suggestion of government orchestration against Ono’s immunotherapy treatment Opdivo (nivolumab) has moved a stage further with a report in the...

Pelham Smithers Associates

🇯🇵 JAPAN • Results & Revisions 10/22 -Chugai, Disco, Benefit One [& Pasona], Oisix