In today’s briefing:
- Share Buybacks In Japan – A 2023 Primer
- Joyful Honda (3191) – Repeats Its ASR In Double the Size
- Last Week in Event SPACE: Aussie Tax-Loss Selling, Japan Post Bank/Holdings, AviChina, Hang Lung
Share Buybacks In Japan – A 2023 Primer
- The TSE and Government are pressuring low-PBR companies to DO SOMETHING to raise their PBR to >1.0x. The easiest way to do that is raise ROE.
- Raising R requires customers “agree” (buying more, paying a higher price, etc). Lowering E means buying back shares or paying big special dividends. That’s easier for a company.
- So buybacks have been increasing in number, and breadth, and to some degree in size. This insight describes the mechanics/details of how buybacks work in Japan.
Joyful Honda (3191) – Repeats Its ASR In Double the Size
- Last year, I wrote about Joyful Honda (3191 JP)‘s implementation of a ¥2.5bn ToSTNeT-3 into Accelerated Share Repurchase. It was the first such transaction I knew of in Japan.
- This year, they have just announced another for nearly twice the size. It is worth looking at the details and comparing the stock vs Peers.
- It is also worth understanding exactly what the incentives are for whom and how that impacts the path. And who might respond to it.
Last Week in Event SPACE: Aussie Tax-Loss Selling, Japan Post Bank/Holdings, AviChina, Hang Lung
- Concerning Australian tax-loss selling baskets, the sell across the four baskets made 4.2% vs ASX200 in May, then is up.
- Be long Japan Post Bank (7182 JP). Or longJapan Post Holdings (6178 JP) for a long JPB position. Don’t be short JPB or short JPB vs JPH.
- As a PRC aviation/defense play, AviChina Industry & Technology H (2357 HK)‘s fundamentals are undemanding.
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