Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

In November 2017, <a href="https://www.smartkarma.com/entities/637" target="_blank" data-smartkarma-citation="entities:637:1">Toshiba Corp (6502 JP)</a> bowed to the inevitable and issued shares in order to shore up shareholder equity ahead of the 31 March 2018 deadline where if the company had not announced a positive shareholder equity number, it would have been delisted according to the Enforcement Rules of the Tokyo Stock Exchange. So it issued ¥600 billion of equity in an accelerated privately-negotiated placement to hedge funds. There was some jawboning later from domestic institutions who had not gotten the show on the deal, but they would do well to remember that when Toshiba was in dire straits earlier that year, and continued listing was not guaranteed because of accounting issues which were later overcome (before the equity issuance), it was the hedge funds who bought dozens of percent of the company - not domestic financial institutions. In any case, the equity was predictably needed, but as a way of making it clear that it would not be forever, the release accompanying the financing said the company would accelerate returns to shareholders once the sale of Toshiba Memory Corporation was complete. That return of capital to shareholders was <a href="https://www.toshiba.co.jp/about/ir/en/news/20180613_1.pdf" target="_blank">announced</a> in June 2018 after the closing of the TMC transaction had been confirmed. Toshiba would buy back ¥700 billion of shares. At the time, that was up to 40% of shares outstanding, but the shares rose as the shares of companies with large buyback plans do, and it took until November to dot the "i"s and cross the "t"s on making sure that the cash in the bank account was deemed distributable capital surplus. On November 8th, a year after announcing the sale of equity, Toshiba announced the start of a Very Large Buyback. A few days later the company announced a large ToSTNeT-3 buyback, offering to buy back all  ¥700 billion of shares the following morning at that day's close. A week later the company had bought back ¥243 billion or more than 35% of the total buyback then announced further purchases would be made in the market. That's when the fun began. <hr>For previous recent treatment on the Toshiba buyback, see the following:    <a href="https://www.smartkarma.com/insights/toshiba-king-street-s-buyback-proposals-lack-required-detail" target="_blank" data-smartkarma-citation="insights:24727">Toshiba: King Street's Buyback Proposals Lack Required Detail</a> (5 Oct 2018)     <a href="https://www.smartkarma.com/insights/toshiba-s-buyback-how-it-might-work" target="_blank" data-smartkarma-citation="insights:25748">Toshiba's Buyback - How It Might Work</a> (9 Nov 2018)     <a href="https://www.smartkarma.com/insights/toshiba-s-tostnet-3-buyback-unwinding-another-game-of" target="_blank" data-smartkarma-citation="insights:25863">Toshiba's ToSTNeT-3 Buyback: Unwinding? Another Game of 🐓?</a> (12 Nov 2018)     <a href="https://www.smartkarma.com/insights/toshiba-tostnet-3-round-2-579bn-to-go" target="_blank" data-smartkarma-citation="insights:25945">Toshiba ToSTNeT-3: Round 2 (¥579bn To Go)</a> (14 Nov 2018)     <a href="https://www.smartkarma.com/insights/toshiba-tostnet-3-buyback-means-1-3-done-off-to-buy-in-the-market-now" target="_blank" data-smartkarma-citation="insights:26126">Toshiba ToSTNeT-3 Buyback Means 1/3 Done. Off To Buy In The Market Now!</a> (21 Nov 2018)     <a href="https://www.smartkarma.com/insights/toshiba-buyback-update-not-banging-down-doors-to-get-stock-yet" target="_blank" data-smartkarma-citation="insights:26434">Toshiba Buyback Update - Not Banging Down Doors To Get Stock Yet</a> (3 Dec 2018)

In November 2017, Toshiba Corp (6502 JP) bowed to the inevitable and issued shares in order to shore up shareholder equity ahead of the 31 March 2018 deadline where if the company had not announced a positive shareholder equity number, it would have been delisted according to the Enforcement Rules of the Tokyo Stock Exchange. So it issued ¥600 billion of equity in an accelerated privately-negotiated placement to hedge funds. There was some jawboning later from domestic institutions who had not gotten the show on the deal, but they would do well to remember that when Toshiba was in dire straits earlier that year, and continued listing was not guaranteed because of accounting issues which were later overcome (before the equity issuance), it was the hedge funds who bought dozens of percent of the company - not domestic financial institutions. In any case, the equity was predictably needed, but as a way of making it clear that it would not be forever, the release accompanying the financing said the company would accelerate returns to shareholders once the sale of Toshiba Memory Corporation was complete. That return of capital to shareholders was announced in June 2018 after the closing of the TMC transaction had been confirmed. Toshiba would buy back ¥700 billion of shares. At the time, that was up to 40% of shares outstanding, but the shares rose as the shares of companies with large buyback plans do, and it took until November to dot the "i"s and cross the "t"s on making sure that the cash in the bank account was deemed distributable capital surplus. On November 8th, a year after announcing the sale of equity, Toshiba announced the start of a Very Large Buyback. A few days later the company announced a large ToSTNeT-3 buyback, offering to buy back all  ¥700 billion of shares the following morning at that day's close. A week later the company had bought back ¥243 billion or more than 35% of the total buyback then announced further purchases would be made in the market. That's when the fun began. For previous recent treatment on the Toshiba buyback, see the following:    Toshiba: King Street's Buyback Proposals Lack Required Detail (5 Oct 2018)     Toshiba's Buyback - How It Might Work (9 Nov 2018)     Toshiba's ToSTNeT-3 Buyback: Unwinding? Another Game of 🐓? (12 Nov 2018)     Toshiba ToSTNeT-3: Round 2 (¥579bn To Go) (14 Nov 2018)     Toshiba ToSTNeT-3 Buyback Means 1/3 Done. Off To Buy In The Market Now! (21 Nov 2018)     Toshiba Buyback Update - Not Banging Down Doors To Get Stock Yet (3 Dec 2018)

Toshiba Buyback: Proceeding Apace, But That's Slow

Materials Analyst/Strategist, Janus Analysis

Gaius King

Materials Analyst/Strategist

Accelerating Tomorrow’s Independent Research

Boost Research

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Thematic (Sector/Industry)

<ul>
<li>Quantifying nuclear statistics with substantial discrepancies</li>
<li>LT contracts &amp; speculative hoarding driving recent 40% spot price increase</li>
<li>Primary/secondary Uranium supplies currently 112% of 2017 demand</li>
<li>Uranium supply deficits extremely unlikely before 2022</li>
<li>Global Uranium demand to fall 25-40% by 2050</li>
<li> Primary Uranium sector LT SELL</li>
</ul>
We have independently audited global nuclear construction statistics in order to determine future Uranium demand.  Although near-term statistics match those in the public domain, long-term demand determined via construction pipeline illustrates substantial discrepancies.  Compiling planned plant construction, operational extensions, nameplate upgrades, versus decommissioning announcements/events, and in many cases, public policy inertia; has led us to believe that despite historical primary supply shortages, global nuclear demand peaked in 2006.
Since plateauing and despite strong Chinese growth, nuclear power generation has fallen &lt;2% over the past two decades, a decline that is predicted to accelerate as a number of developed and developing nations pursue other energy options.
The macro-trend not replacing existing nuclear infrastructure means (dependent on assumptions), according to our calculations, global uranium demand will decrease between 20 to 40% by 2050.
As opposed to signifying a fundamental change in underlying demand, we believe that recent Uranium price increases are the result of producers closing primary operations, and substituting production with purchases on the spot market to meet long-term contract obligations.  In addition, hedge funds are buying physical uranium in order to realise profits on potential future commodity price increases.  Critically, we determine that primary and secondary supplies are more than sufficient to meet forecast demand over the next four to five years; before taking into account substantial existing global uranium stocks, some of which are able to re-enter the spot market at short notice.


Quantifying nuclear statistics with substantial discrepancies
LT contracts &amp; speculative hoarding driving recent 40% spot price increase
Primary/secondary Uranium supplies currently 112% of 2017 demand
Uranium supply deficits extremely unlikely before 2022
Global Uranium demand to fall 25-40% by 2050
 Primary Uranium sector LT SELL

We have independently audited global nuclear construction statistics in order to determine future Uranium demand.  Although near-term statistics match those in the public domain, long-term demand determined via construction pipeline illustrates substantial discrepancies.  Compiling planned plant construction, operational extensions, nameplate upgrades, versus decommissioning announcements/events, and in many cases, public policy inertia; has led us to believe that despite historical primary supply shortages, global nuclear demand peaked in 2006.
Since plateauing and despite strong Chinese growth, nuclear power generation has fallen &lt;2% over the past two decades, a decline that is predicted to accelerate as a number of developed and developing nations pursue other energy options.
The macro-trend not replacing existing nuclear infrastructure means (dependent on assumptions), according to our calculations, global uranium demand will decrease between 20 to 40% by 2050.
As opposed to signifying a fundamental change in underlying demand, we believe that recent Uranium price increases are the result of producers closing primary operations, and substituting production with purchases on the spot market to meet long-term contract obligations.  In addition, hedge funds are buying physical uranium in order to realise profits on potential future commodity price increases.  Critically, we determine that primary and secondary supplies are more than sufficient to meet forecast demand over the next four to five years; before taking into account substantial existing global uranium stocks, some of which are able to re-enter the spot market at short notice.

Uranium - About to Enter Its Own Nuclear Winter

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

The year is winding down and there are only three weeks left in 2018. The sentiment on the global stock markets has been turning down rapidly in recent weeks. For those that follow Smartkarma, some of you may have noticed that the sentiment on the reports have also been getting progressively bearish. Smartkarma's monthly sentiment distribution (number of bearish reports/total number of reports) reached the highest bearish level this year in November at 46.2%, up from 42% in October and 37.6% in September. 
KOSPI was down 1% from end of November to December 7th. Nikkei was down 0.3% during the same period. 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/072/607/original/Smartkarma-sentiment.PNG?1544403635" class="editor-image img-responsive" data-smartkarma-image-id="72607"></figure>
<div class="content-caption">Smartkarma Sentiment Index (Source: Smartkarma)</div>
There have been numerous excellent insights on Nissan/Renault by several Smartkarma contributors that are worthwhile taking another look: 
<ul>
<li>
<a href="https://www.smartkarma.com/insights/nissan-is-the-alliance-ghosn-with-the-wind" target="_blank" data-smartkarma-citation="insights:26109">Nissan: Is the Alliance Ghosn With the Wind?</a> (21 Nov, <a href="https://www.smartkarma.com/profiles/713" target="_blank" data-smartkarma-citation="accounts:713">Mio Kato, CFA</a>)</li>
<li>
<a href="https://www.smartkarma.com/insights/nissan-renault-french-fireworks-ahead" target="_blank" data-smartkarma-citation="insights:26162">Nissan/Renault:  French Fireworks Ahead?</a> (22 Nov, <a href="https://www.smartkarma.com/profiles/25" target="_blank" data-smartkarma-citation="accounts:25">Travis Lundy</a>)</li>
<li>
<a href="https://www.smartkarma.com/insights/nissan-motor-risks-to-the-alliance-if-ghosn-returns-to-renault-as-chairman" target="_blank" data-smartkarma-citation="insights:26131">Nissan Motor--Risks to the Alliance if Ghosn Returns to Renault as Chairman</a> (22 Nov, <a href="https://www.smartkarma.com/profiles/914" target="_blank" data-smartkarma-citation="accounts:914">SC Capital</a>)</li>
<li>
<a href="https://www.smartkarma.com/insights/nissan-motor-charting-the-ghosn-supremacy" target="_blank" data-smartkarma-citation="insights:26191">Nissan Motor: Charting the Ghosn Supremacy</a> (25 Nov, <a href="https://www.smartkarma.com/profiles/2531" target="_blank" data-smartkarma-citation="accounts:2531">Campbell Gunn</a>)</li>
<li>
<a href="https://www.smartkarma.com/insights/nissan-motor-what-happens-if-nissan-renault-both-owned-25-stakes-in-each-other" target="_blank" data-smartkarma-citation="insights:26292">Nissan Motor--What Happens if Nissan &amp; Renault Both Owned 25% Stakes in Each Other?</a> (29 Nov, <a href="https://www.smartkarma.com/profiles/914" target="_blank" data-smartkarma-citation="accounts:914">SC Capital</a>)</li>
<li>
<a href="https://www.smartkarma.com/insights/nissan-renault-french-state-intervention" target="_blank" data-smartkarma-citation="insights:26444">Nissan/Renault: French State Intervention</a> (4 Dec, <a href="https://www.smartkarma.com/profiles/25" target="_blank" data-smartkarma-citation="accounts:25">Travis Lundy</a>)</li>
</ul>

The year is winding down and there are only three weeks left in 2018. The sentiment on the global stock markets has been turning down rapidly in recent weeks. For those that follow Smartkarma, some of you may have noticed that the sentiment on the reports have also been getting progressively bearish. Smartkarma's monthly sentiment distribution (number of bearish reports/total number of reports) reached the highest bearish level this year in November at 46.2%, up from 42% in October and 37.6% in September. 
KOSPI was down 1% from end of November to December 7th. Nikkei was down 0.3% during the same period. 

Smartkarma Sentiment Index (Source: Smartkarma)
There have been numerous excellent insights on Nissan/Renault by several Smartkarma contributors that are worthwhile taking another look: 


Nissan: Is the Alliance Ghosn With the Wind? (21 Nov, Mio Kato, CFA)

Nissan/Renault:  French Fireworks Ahead? (22 Nov, Travis Lundy)

Nissan Motor--Risks to the Alliance if Ghosn Returns to Renault as Chairman (22 Nov, SC Capital)

Nissan Motor: Charting the Ghosn Supremacy (25 Nov, Campbell Gunn)

Nissan Motor--What Happens if Nissan &amp; Renault Both Owned 25% Stakes in Each Other? (29 Nov, SC Capital)

Nissan/Renault: French State Intervention (4 Dec, Travis Lundy)


Smartkarma’s Week That Was in JP/​​​​​KR: Softbank, Nissan, & A Star Is Born in 2018 Rewind to 1937

David Blennerhassett

Last Week in Event SPACE: Takeda, Graincorp, Alps, Hopewell, Renesas, Toshiba, Red Hat, Renault

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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

After <a href="https://www.smartkarma.com/entities/17524" target="_blank" data-smartkarma-citation="entities:17524:1">Mcdermott Intl (MDR US)</a> announced further write-downs related to the Cameron and Freeport LNG projects at its 3Q earnings, <a href="https://www.smartkarma.com/entities/6232" target="_blank" data-smartkarma-citation="entities:6232:1">Chiyoda Corp (6366 JP)</a>'s stock price entered free fall as the company came out with a ¥98bn downward revision, announcing losses that would severely weaken its balance sheet. The majority of this was driven by a ¥85bn write-down for Cameron but adjustments were also made to their Freeport and Tangguh projects.The expected ¥105bn net loss will be the worst in the company's history and the cumulative losses over the last three years (¥125.0bn) would now exceed the overall loss accumulated in the three years between 1997-1999 (¥116.7bn) when the company flirted with bankruptcy and became a sub ¥100 stock. Chiyoda now forms a triumvirate with <a href="https://www.smartkarma.com/entities/637" target="_blank" data-smartkarma-citation="entities:637:1">Toshiba Corp (6502 JP)</a>/Westinghouse and Mcdermott as companies announcing huge write-downs with the common thread being CB&amp;I. Toshiba's net losses before minority interests were ¥1,160bn while Mcdermott has avoided losses but been forced to write-down a total of $909m (¥103bn) since its acquisition of CB&amp;I.We examine the history of CB&amp;I and try to shed some light on the issues facing EPC companies in the US, potential root causes of these write-downs and an evaluation of Chiyoda's risk management below.

After Mcdermott Intl (MDR US) announced further write-downs related to the Cameron and Freeport LNG projects at its 3Q earnings, Chiyoda Corp (6366 JP)'s stock price entered free fall as the company came out with a ¥98bn downward revision, announcing losses that would severely weaken its balance sheet. The majority of this was driven by a ¥85bn write-down for Cameron but adjustments were also made to their Freeport and Tangguh projects.The expected ¥105bn net loss will be the worst in the company's history and the cumulative losses over the last three years (¥125.0bn) would now exceed the overall loss accumulated in the three years between 1997-1999 (¥116.7bn) when the company flirted with bankruptcy and became a sub ¥100 stock. Chiyoda now forms a triumvirate with Toshiba Corp (6502 JP)/Westinghouse and Mcdermott as companies announcing huge write-downs with the common thread being CB&amp;I. Toshiba's net losses before minority interests were ¥1,160bn while Mcdermott has avoided losses but been forced to write-down a total of $909m (¥103bn) since its acquisition of CB&amp;I.We examine the history of CB&amp;I and try to shed some light on the issues facing EPC companies in the US, potential root causes of these write-downs and an evaluation of Chiyoda's risk management below.

Chiyoda: Assessing Risk Management Amidst the Trail of Write-Downs in CB&I's Wake

Japan

Toshiba Corporation manufactures and markets electrical and electronic products. The Company's products include digital products such as PCs and televisions, NAND flash memories, and system LSIs (large-scale integrated), as well as social infrastructures such as power generators, medical equipment, and home appliances.

Price Gauge
52-week Range	0.00 - 0.00
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Toshiba Corp (6502 JP)

Toshiba Buyback: Proceeding Apace, But That's Slow

In November 2017, Toshiba Corp (6502 JP) bowed to the inevitable and issued shares in order to shore up shareholder equity ahead of the 31 March...

Travis Lundy

Uranium - About to Enter Its Own Nuclear Winter

Quantifying nuclear statistics with substantial discrepancies LT contracts & speculative hoarding driving recent 40% spot...

Boost Research

Smartkarma’s Week That Was in JP/KR: Softbank, Nissan, & A Star Is Born in 2018 Rewind to 1937

The year is winding down and there are only three weeks left in 2018. The sentiment on the global stock markets has been turning down rapidly in...

Douglas Kim

Last Week in Event SPACE: Takeda, Graincorp, Alps, Hopewell, Renesas, Toshiba, Red Hat, Renault

Last Week in Event SPACE ... Takeda Pharmaceutical (4502 JP) is a significantly interesting trade still, but there are path, borrow, settlement,...

David Blennerhassett

Chiyoda: Assessing Risk Management Amidst the Trail of Write-Downs in CB&I's Wake

After Mcdermott Intl (MDR US) announced further write-downs related to the Cameron and Freeport LNG projects at its 3Q earnings, Chiyoda Corp (6366...

Mio Kato

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Toshiba Buyback: Proceeding Apace, But That's Slow

In November 2017, Toshiba Corp (6502 JP) bowed to the inevitable and issued shares in order to shore up shareholder equity ahead of the 31 March...

Travis Lundy

Uranium - About to Enter Its Own Nuclear Winter

Quantifying nuclear statistics with substantial discrepancies LT contracts & speculative hoarding driving recent 40% spot...

Boost Research

Smartkarma’s Week That Was in JP/​​​​​KR: Softbank, Nissan, & A Star Is Born in 2018 Rewind to 1937

The year is winding down and there are only three weeks left in 2018. The sentiment on the global stock markets has been turning down rapidly in...

Douglas Kim

Last Week in Event SPACE: Takeda, Graincorp, Alps, Hopewell, Renesas, Toshiba, Red Hat, Renault

Last Week in Event SPACE ... Takeda Pharmaceutical (4502 JP) is a significantly interesting trade still, but there are path, borrow, settlement,...

David Blennerhassett

Chiyoda: Assessing Risk Management Amidst the Trail of Write-Downs in CB&I's Wake

After Mcdermott Intl (MDR US) announced further write-downs related to the Cameron and Freeport LNG projects at its 3Q earnings, Chiyoda Corp (6366...

Mio Kato

Smartkarma’s Week That Was in JP/KR: Softbank, Nissan, & A Star Is Born in 2018 Rewind to 1937