Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

Kosaido Governance Ever Better - Death Is a Growth Business

Kosaido (7868): A Story Being Told, A Story Being Bought

Kosaido Moves Quickly Post Failed Tenders

Quiddity Advisors

Event-Driven

<p>Kosaido has been a "pet" of mine since the Bain-led MBO led to a Murakami activist opposition, a bumped then broken deal, and then a change in governance. </p><p>That change in governance has been remarkable. After the failed MBO, the company switched out its management and its board and its shareholder returns policy. </p><p>The company sold off its publishing business, quickly spent more on its main business, started getting leaner at its printing business, and then as discussed in <a href="https://www.smartkarma.com/insights/kosaido-governance-ever-better-death-is-a-growth-business" target="_blank" data-smartkarma-citation="insights:36374" rel="noopener">Kosaido Governance Ever Better - Death Is a Growth Business</a> last month, they did a GREAT thing for shareholders by announcing it would try to buy in minorities (mostly Buddhist temples and families related to the legacy businesses) in its funeral parlor business, then merge with it at the end of March 2020. </p><table class="table table-striped"><tbody>
<tr><td colspan="4"><h2>Previous Insights on the Kosaido Situation Published on Smartkarma...</h2></td></tr>
<tr>
<td>Date</td>
<td>Buy/Sell</td>
<td>Price</td>
<td>Insight</td>
</tr>
<tr>
<td>21-Jan</td>
<td>Buy</td>
<td>¥609</td>
<td><a href="https://www.smartkarma.com/insights/smallcap-kosaido-7868-jp-tender-offer-wrong-price-but-whaddya-gonna-do" target="_blank" data-smartkarma-citation="insights:27405" rel="noopener">Smallcap Kosaido (7868 JP) TOB: Wrong Price But Whaddya Gonna Do?</a></td>
</tr>
<tr>
<td>7-Feb</td>
<td>Sell</td>
<td>¥775</td>
<td><a href="https://www.smartkarma.com/insights/kosaido-activism-drives-price-30-through-terms" target="_blank" data-smartkarma-citation="insights:27821" rel="noopener">Kosaido: Activism Drives Price 30+% Through Terms</a></td>
</tr>
<tr>
<td>19-Feb</td>
<td>Sell</td>
<td>¥703</td>
<td><a href="https://www.smartkarma.com/insights/kosaido-tob-7868-jp-situation-gets-weird-activists-and-independent-opposition-to-an-mbo" target="_blank" data-smartkarma-citation="insights:28052" rel="noopener">Kosaido (7868 JP) Situation Gets Weird - Activists+Indie Opposition to MBO</a></td>
</tr>
<tr>
<td>26-Feb</td>
<td>Buy</td>
<td>¥738</td>
<td><a href="https://www.smartkarma.com/insights/kosaido-7868-jp-tob-extended" target="_blank" data-smartkarma-citation="insights:28240" rel="noopener">Kosaido (7868 JP) TOB Extended</a></td>
</tr>
<tr>
<td>19-Mar</td>
<td>Buy</td>
<td>¥748</td>
<td><a href="https://www.smartkarma.com/insights/kosaido-7868-jp-reno-goes-bigger-but-tob-price-this-time-is-final-so-what-next" target="_blank" data-smartkarma-citation="insights:28664" rel="noopener">Kosaido (7868 JP) - Reno Goes Bigger But TOB Price Is Final So What Next?</a></td>
</tr>
<tr>
<td>21-Mar</td>
<td>Buy</td>
<td>¥737</td>
<td><a href="https://www.smartkarma.com/insights/murakami-san-goes-hostile-on-kosaido-7868-jp-overbids-bain-s-final-offer" target="_blank" data-smartkarma-citation="insights:28716" rel="noopener">Murakami-San Goes Hostile on Kosaido (7868 JP), Overbids Bain's "Final" Offer</a></td>
</tr>
<tr>
<td>24-Mar</td>
<td>Sell</td>
<td>¥859</td>
<td><a href="https://www.smartkarma.com/insights/kosaido-7868-jp-reaches-value-you-can-sell" target="_blank" data-smartkarma-citation="insights:28775" rel="noopener">Kosaido (7868 JP) Reaches Value You Can Sell</a></td>
</tr>
<tr>
<td>25-Apr</td>
<td>Sell</td>
<td>¥771</td>
<td><a href="https://www.smartkarma.com/insights/kosaido-the-bull-case-the-bear-case-and-the-base-case" target="_blank" data-smartkarma-citation="insights:29416" rel="noopener">Kosaido: The Bull Case, The Bear Case, and the Base Case</a></td>
</tr>
<tr>
<td>23-May</td>
<td>Sell</td>
<td>¥724</td>
<td><a href="https://www.smartkarma.com/insights/murakami-group-tender-for-kosaido-fails-spectacularly" target="_blank" data-smartkarma-citation="insights:29978" rel="noopener">Murakami Group Tender for Kosaido Fails... Spectacularly</a></td>
</tr>
<tr>
<td>27-May</td>
<td>Sell</td>
<td>¥708</td>
<td>
<a href="https://www.smartkarma.com/insights/kosaido-moves-quickly-post-failed-tenders" target="_blank" data-smartkarma-citation="insights:30072" rel="noopener">Kosaido Moves Quickly Post Failed Tenders</a> </td>
</tr>
<tr>
<td>29-Nov</td>
<td>Buy</td>
<td>~¥900</td>
<td>
<a href="https://www.smartkarma.com/insights/kosaido-7868-a-story-being-told-a-story-being-bought" target="_blank" data-smartkarma-citation="insights:34886" rel="noopener">Kosaido (7868): A Story Being Told, A Story Being Bought</a> </td>
</tr>
<tr>
<td>5-Feb-20</td>
<td>Buy</td>
<td>~1040</td>
<td>
<a href="https://www.smartkarma.com/insights/kosaido-governance-ever-better-death-is-a-growth-business" target="_blank" data-smartkarma-citation="insights:36374" rel="noopener">Kosaido Governance Ever Better - Death Is a Growth Business</a> </td>
</tr>
</tbody></table><p>Several days after my last insight, the company reported <a href="https://contents.xj-storage.jp/xcontents/AS01383/0092e38a/0095/409d/aac7/b3b1fd4b6f79/140120200210460960.pdf" target="_blank" rel="noopener">Q3 earnings</a> which were "in line" with Revenues, OP, RP all down small year-on-year. Printing and Business Support revenues were down 3.4%yoy while funeral parlour revenues were up year-on-year.</p><p>The EGM of the funeral parlour business to approve that is on 7 March 2020.</p><p>But that's not the big news. The big news is in the reshuffling of ownership. This change in ownership has been fierce, with the initial flurry taking place last fall - discussed in <a href="https://www.smartkarma.com/insights/kosaido-7868-a-story-being-told-a-story-being-bought" target="_blank" data-smartkarma-citation="insights:34886" rel="noopener">Kosaido (7868): A Story Being Told, A Story Being Bought</a>.</p><p>Since then, the widow has sold a chunk of shares, Murakami has now sold, and someone who was not on the register as of 6 weeks ago owns 19% of the company.</p>

Kosaido has been a "pet" of mine since the Bain-led MBO led to a Murakami activist opposition, a bumped then broken deal, and then a change in governance. That change in governance has been remarkable. After the failed MBO, the company switched out its management and its board and its shareholder returns policy. The company sold off its publishing business, quickly spent more on its main business, started getting leaner at its printing business, and then as discussed in Kosaido Governance Ever Better - Death Is a Growth Business last month, they did a GREAT thing for shareholders by announcing it would try to buy in minorities (mostly Buddhist temples and families related to the legacy businesses) in its funeral parlor business, then merge with it at the end of March 2020. 
Previous Insights on the Kosaido Situation Published on Smartkarma...

Date
Buy/Sell
Price
Insight


21-Jan
Buy
¥609
Smallcap Kosaido (7868 JP) TOB: Wrong Price But Whaddya Gonna Do?


7-Feb
Sell
¥775
Kosaido: Activism Drives Price 30+% Through Terms


19-Feb
Sell
¥703
Kosaido (7868 JP) Situation Gets Weird - Activists+Indie Opposition to MBO


26-Feb
Buy
¥738
Kosaido (7868 JP) TOB Extended


19-Mar
Buy
¥748
Kosaido (7868 JP) - Reno Goes Bigger But TOB Price Is Final So What Next?


21-Mar
Buy
¥737
Murakami-San Goes Hostile on Kosaido (7868 JP), Overbids Bain's "Final" Offer


24-Mar
Sell
¥859
Kosaido (7868 JP) Reaches Value You Can Sell


25-Apr
Sell
¥771
Kosaido: The Bull Case, The Bear Case, and the Base Case


23-May
Sell
¥724
Murakami Group Tender for Kosaido Fails... Spectacularly


27-May
Sell
¥708

Kosaido Moves Quickly Post Failed Tenders 


29-Nov
Buy
~¥900

Kosaido (7868): A Story Being Told, A Story Being Bought 


5-Feb-20
Buy
~1040

Kosaido Governance Ever Better - Death Is a Growth Business 

Several days after my last insight, the company reported Q3 earnings which were "in line" with Revenues, OP, RP all down small year-on-year. Printing and Business Support revenues were down 3.4%yoy while funeral parlour revenues were up year-on-year.The EGM of the funeral parlour business to approve that is on 7 March 2020.But that's not the big news. The big news is in the reshuffling of ownership. This change in ownership has been fierce, with the initial flurry taking place last fall - discussed in Kosaido (7868): A Story Being Told, A Story Being Bought.Since then, the widow has sold a chunk of shares, Murakami has now sold, and someone who was not on the register as of 6 weeks ago owns 19% of the company.

Kosaido

Aso Corp Running at Kosaido (7868)