Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

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. <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>I have not read the article - no access - but the headline suggests...<blockquote>Fujitsu too is studying the elimination of parent-subsidiary dual listings, a process which could start at earliest within this fiscal year. </blockquote>That sent Fujitsu's listed subs higher on the day.<ul>
<li>Battery and components maker, <a href="https://www.smartkarma.com/entities/fdk-corp" target="_blank" data-smartkarma-citation="entities:18857:1" rel="noopener">Fdk Corp (6955 JP)</a>, of which Fujitsu owns 58.8% went limit up before coming off and ending up 11.8% on the day. </li>
<li>
<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>, 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>
<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>, 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>
<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>, 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>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.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."

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."

Japan

Nippon Avionics Co., Ltd. is a manufacturer of electronic aviation and office equipment.  The Company designs, develops, and manufactures electronic products such as communication devices. integrated circuit (IC) boards, and video/image projectors for group presentations.

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Nippon Avionics (6946 JP)

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

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