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/mitsui-co-ltd" target="_blank" data-smartkarma-citation="entities:20799:1" rel="noopener">Mitsui &amp; Co Ltd (8031 JP)</a> on 1 November reported its results for H1 2022. H1 Revenue +37.1%yoy, OP+27.2%yoy, NP+33.2%yoy to ¥539bn. Full-year NP forecast +22.5% to ¥980bn.</li>
<li>Mitsui raised its dividend forecast (previously scheduled to rise from ¥105/share to ¥120/share) to ¥130/share and announced a ¥140bn buyback, adding to the ¥100bn announced in May completed in September.</li>
<li>The first ¥58.6bn was done in a ToSTNeT-3 buyback. Now there is another ¥79.4bn to go. There's also a fair bit of index selling the next 6mos.</li>
</ul>



Mitsui &amp; Co Ltd (8031 JP) on 1 November reported its results for H1 2022. H1 Revenue +37.1%yoy, OP+27.2%yoy, NP+33.2%yoy to ¥539bn. Full-year NP forecast +22.5% to ¥980bn.
Mitsui raised its dividend forecast (previously scheduled to rise from ¥105/share to ¥120/share) to ¥130/share and announced a ¥140bn buyback, adding to the ¥100bn announced in May completed in September.
The first ¥58.6bn was done in a ToSTNeT-3 buyback. Now there is another ¥79.4bn to go. There's also a fair bit of index selling the next 6mos.


Mitsui & Co (8031) Buyback - Big Profit, Big Div, Big Buyback, Some Index Selling

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>This is now the third Int'l Compass/third week in a row where we are discussing an increasing number of country indexes experiencing bullish 3.5-9-month downtrend reversals.</li>
<li>Importantly, all of the previously mentioned indexes are holding above their breakout levels (i.e., there has yet to be any failed breakouts).</li>
<li>Now, the U.S. dollar (DXY) is starting to show early signs of topping. We continue to believe that global equities are going through a bottoming process.</li>
</ul>


This is now the third Int'l Compass/third week in a row where we are discussing an increasing number of country indexes experiencing bullish 3.5-9-month downtrend reversals.
Importantly, all of the previously mentioned indexes are holding above their breakout levels (i.e., there has yet to be any failed breakouts).
Now, the U.S. dollar (DXY) is starting to show early signs of topping. We continue to believe that global equities are going through a bottoming process.


U.S. Dollar Topping?; Bullish Reversals Continue; Ideas in Growth/Cyclicals, Financials

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

Pan Pacific International Holdings / Equity Bottom-Up

<ul>
<li>PPI has begun roll out of new, specialty food stores designed to slot into a variety of shopping malls. </li>
<li>On the surface, these stores look like mini-Don Quijote stores, emphasising low prices and a dazzling density of product, but focused on sweets, liquor, cosmetics, or a combination.</li>
<li>Expansion will help reach new customers, reduce the expense of opening new stores, and help with building scale for private brands. </li>
</ul>


PPI has begun roll out of new, specialty food stores designed to slot into a variety of shopping malls. 
On the surface, these stores look like mini-Don Quijote stores, emphasising low prices and a dazzling density of product, but focused on sweets, liquor, cosmetics, or a combination.
Expansion will help reach new customers, reduce the expense of opening new stores, and help with building scale for private brands. 


<ul>
<li>Bain is getting the major execs to tender, and rolling <a href="https://www.smartkarma.com/entities/sojitz-corp" target="_blank" data-smartkarma-citation="entities:14437:1" rel="noopener">Sojitz Corp (2768 JP)</a>'s 23% into the post-Tender EGM vote. That gets them to 57+%. No majority of minority here. </li>
<li>But the equity check appears to be about 0.06x revenue, 4-5x PER, and takeover price EV at 4+ish years of forecast EBITDA. It's a good rollup for its ads business.</li>
<li>Too cheap, but not much you can do about it. Foreigners and financial holders own less than 0.5% of shares out. </li>
</ul>


Bain is getting the major execs to tender, and rolling Sojitz Corp (2768 JP)'s 23% into the post-Tender EGM vote. That gets them to 57+%. No majority of minority here. 
But the equity check appears to be about 0.06x revenue, 4-5x PER, and takeover price EV at 4+ish years of forecast EBITDA. It's a good rollup for its ads business.
Too cheap, but not much you can do about it. Foreigners and financial holders own less than 0.5% of shares out. 


Tri-Stage (2178 JP) MBO by Bain - Another Lowball Takeover Likely To Get Done

<ul>
<li>Sojitz and JAL have announced the start of their tender offer for <a href="https://www.smartkarma.com/entities/jalux-inc" target="_blank" data-smartkarma-citation="entities:4339:1" rel="noopener">Jalux Inc (2729 JP)</a>. There was no surprise in November. And no change in the interim.</li>
<li>While not outrageously generous, it is not particularly egregious to minority shareholders and the shareholder structure suggests it gets done easily. </li>
<li>The lack of Japan FTC approval prior to launch is a little odd, but there should be minimal risk, and practically speaking, zero incremental risk vs waiting to start.</li>
</ul>


Sojitz and JAL have announced the start of their tender offer for Jalux Inc (2729 JP). There was no surprise in November. And no change in the interim.
While not outrageously generous, it is not particularly egregious to minority shareholders and the shareholder structure suggests it gets done easily. 
The lack of Japan FTC approval prior to launch is a little odd, but there should be minimal risk, and practically speaking, zero incremental risk vs waiting to start.


JALUX (2729 JP) Tender Offer Commences - Open & Shut Case With Weirdness

Japan

Sojitz Corporation is a general trading company.  The Company has business divisions such as Machinery & Aerospace, Energy & Mineral Resources, Chemicals & Plastics, Real Estate Development & Forest Products, Consumer Lifestyle Business, and New Business Development Group.  Sojitz was formed through the business integration between Nichimen and Nissho Iwai.

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Sojitz Corp (2768 JP)

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Travis Lundy

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Travis Lundy

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