Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Big move higher for oil set to spike the JP oil major Inpex although the refiners have large outstanding short interests and may squeeze</li>
<li>The higher oil price is negative for Japan’s utilities which have yet to restart reactors and are dependent on oil/gas imports to fuel their thermal generation</li>
<li>Details are limited on a potential Seven Bank stake sale by 7&amp;I, but there should be room for upside as shorts continue to cover</li>
</ul>


Big move higher for oil set to spike the JP oil major Inpex although the refiners have large outstanding short interests and may squeeze
The higher oil price is negative for Japan’s utilities which have yet to restart reactors and are dependent on oil/gas imports to fuel their thermal generation
Details are limited on a potential Seven Bank stake sale by 7&amp;I, but there should be room for upside as shorts continue to cover


Japan Morning Connection: Spike in Oil Positive for Inpex and Refiners

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/k-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:36073:1" rel="noopener">K Bank (279570 KS)</a> is a Korean internet bank. It has launched an IPO to raise up to US$734 million.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/k-bank-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:160037" rel="noopener">K Bank IPO: The Bear Case</a> and <a href="https://www.smartkarma.com/insights/k-bank-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:159133" rel="noopener">K Bank IPO: The Bull Case</a>. 
</li>
<li>We examine the syndicate's valuation methodology. Our analysis suggests that K Bank is unattractively valued in the IPO price range. We would pass on the IPO.</li>
</ul>



K Bank (279570 KS) is a Korean internet bank. It has launched an IPO to raise up to US$734 million.
We previously discussed the IPO in K Bank IPO: The Bear Case and K Bank IPO: The Bull Case. 

We examine the syndicate's valuation methodology. Our analysis suggests that K Bank is unattractively valued in the IPO price range. We would pass on the IPO.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On Friday 13 September, the Ministry of Finance of Japan released revisions to the list (<a href="https://www.mof.go.jp/policy/international_policy/gaitame_kawase/press_release/20240913.html" target="_blank" rel="noopener">Japanese</a>, <a href="https://www.mof.go.jp/english/policy/international_policy/fdi/Related_Guidance_and_Documents/20240913.html" target="_blank" rel="noopener">English</a>) of company classifications under the Foreign Exchange and Foreign Trade Act (FEFTA)</li>
<li>It appears 72 names were newly upgraded to "Core" ("3"), 21 newly listed companies (since the last list in Nov 2021) were labeled "3", and six lost their Type3 designation. </li>
<li>
<a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> saw breathless news articles Friday suggesting a foreign takeover became more difficult. Not really. </li>
</ul>


On Friday 13 September, the Ministry of Finance of Japan released revisions to the list (Japanese, English) of company classifications under the Foreign Exchange and Foreign Trade Act (FEFTA)
It appears 72 names were newly upgraded to "Core" ("3"), 21 newly listed companies (since the last list in Nov 2021) were labeled "3", and six lost their Type3 designation. 

Seven &amp; I Holdings (3382 JP) saw breathless news articles Friday suggesting a foreign takeover became more difficult. Not really. 


The New FEFTA List (With 7&I (3382) As "Core") Is Not a Big Hurdle for Couche-Tard

<ul>
<li>On 30 August, 7&amp;i shareholder Artisan Partners (holder since 2019, now at 1%) wrote an <a href="https://www.morningstar.com/news/globe-newswire/9223425/artisan-partners-international-value-team-sends-letter-to-the-board-of-seven-i" target="_blank" rel="noopener">open letter to the Board of Directors</a> of <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> </li>
<li>There are several comments in bold. "It is imperative that the board of directors negotiate with ACT immediately to achieve the best possible outcome for shareholders" is one.</li>
<li>The letter is a bit preachy, a bit fluffy, and a bit misleading in parts. But it requests the Company brief shareholders on the negotiations by 19 September 2024. </li>
</ul>


On 30 August, 7&amp;i shareholder Artisan Partners (holder since 2019, now at 1%) wrote an open letter to the Board of Directors of Seven &amp; I Holdings (3382 JP) 
There are several comments in bold. "It is imperative that the board of directors negotiate with ACT immediately to achieve the best possible outcome for shareholders" is one.
The letter is a bit preachy, a bit fluffy, and a bit misleading in parts. But it requests the Company brief shareholders on the negotiations by 19 September 2024. 


Artisan Partners Writes a Letter To the 7&I Board (3382) - Meh...

<ul>
<li>The largest potential inbound cross-border M&amp;A in years - for a national champion no less - gets a lot of press coverage. </li>
<li>This morning, a Nikkei <a href="https://asia.nikkei.com/Business/Business-deals/Seven-i-s-proposed-buyout-to-require-preapproval-by-Japan" target="_blank" rel="noopener">article</a> noted <a href="https://www.smartkarma.com/entities/alimentation-couche-tard-inc" target="_blank" data-smartkarma-citation="entities:25103:1" rel="noopener">Alimentation Couche-Tard (ATD CN)</a> was likely to need "prior approval" from Japanese regulatory authorities for its takeover "the Nikkei has learned."</li>
<li>It wasn't difficult for the Nikkei to learn that. METI publishes a FEFTA List. 7&amp;i has been on it for years as Type II Designated Business, requiring prior approval.</li>
</ul>


The largest potential inbound cross-border M&amp;A in years - for a national champion no less - gets a lot of press coverage. 
This morning, a Nikkei article noted Alimentation Couche-Tard (ATD CN) was likely to need "prior approval" from Japanese regulatory authorities for its takeover "the Nikkei has learned."
It wasn't difficult for the Nikkei to learn that. METI publishes a FEFTA List. 7&amp;i has been on it for years as Type II Designated Business, requiring prior approval.


Couche-Tard Bid for 7&I (3382) - FEFTA and Economic Security

Japan

Seven Bank, Ltd. provides banking services mainly through Automated Teller Machine (ATM) across Japan. The bank cooperates with affiliated financial institutions to establish the nationwide ATM network and provide remote banking services, including deposits and loans.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Seven Bank Ltd (8410 JP)

Japan Morning Connection: Spike in Oil Positive for Inpex and Refiners

Surge in oil may squeeze refiners with short interests. Negative for Japanese utilities yet to restart reactors. Potential upside for Seven Bank as...

Andrew Jackson

K Bank IPO: Valuation Insights

We examine the syndicate's valuation methodology. Our analysis suggests that K Bank is unattractively valued in the IPO price range. We would pass...

Arun George

The New FEFTA List (With 7&I (3382) As "Core") Is Not a Big Hurdle for Couche-Tard

The Japan Ministry of Finance made an updated FEFTA classification list on Friday. 7 and i got "upgraded" to Type 3 as Core. That doesn't change...

Travis Lundy

Artisan Partners Writes a Letter To the 7&I Board (3382) - Meh...

The Artisan Partners Int'l Value Strategy team owns 1% of 7ni. They wrote a public letter saying the Board should engage with ACT. It is bland,...

Travis Lundy

Couche-Tard Bid for 7&I (3382) - FEFTA and Economic Security

The ATD bid for 7&i is subject to Prior Notification under FEFTA. This is not news, or special. It is and was known. But I expect that price is far...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)