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

DeNA – Buyback Protects Downside but Net Cash and Investments Dilute Upside Potential

Quiddity Advisors

Event-Driven

On 10 May, <a href="https://www.smartkarma.com/entities/747" target="_blank" data-smartkarma-citation="entities:747:1">Dena Co Ltd (2432 JP)</a><a href="https://ssl4.eir-parts.net/doc/2432/ir_material3/116168/00.pdf" target="_blank">reported</a> FY18 (to 31March 2019) revenue down 11%yoy, Operating Profit down 50.1%, and Net Profit -44.7% (somewhat assisted by the result of asset sales during the year).The company, for the first time in many years, failed to provide any numbers whatsoever for the new fiscal year just commenced ("The consolidated financial results forecast for FY2019 cannot be provided due to the difficulty of reasonably and accurately estimating the figures"). For the several years prior to that the company only provided in its 決算短信 kessan tanshin (short form results) a forecast for the following quarter. For the year to March 2019, in May 2018 the company provided a full-year forecast. That looks to have been the first and last one. <h2>The Big New News</h2>The big new news is that the company also <a href="https://ssl4.eir-parts.net/doc/2432/announcement1/50025/00.pdf" target="_blank">announced</a> a ¥50 billion, 38 million share buyback. The headline figure is that 38 million shares is 26.14% of shares outstanding excluding treasury shares. Given the market cap at the time of announcement was ¥256 billion, it is a bit less than 20%, which is still a lot. With the shares up 16% today, it is worth even less than 20%, but it is still a lot.THAT is worth delving into.

On 10 May, Dena Co Ltd (2432 JP)reported FY18 (to 31March 2019) revenue down 11%yoy, Operating Profit down 50.1%, and Net Profit -44.7% (somewhat assisted by the result of asset sales during the year).The company, for the first time in many years, failed to provide any numbers whatsoever for the new fiscal year just commenced ("The consolidated financial results forecast for FY2019 cannot be provided due to the difficulty of reasonably and accurately estimating the figures"). For the several years prior to that the company only provided in its 決算短信 kessan tanshin (short form results) a forecast for the following quarter. For the year to March 2019, in May 2018 the company provided a full-year forecast. That looks to have been the first and last one. The Big New NewsThe big new news is that the company also announced a ¥50 billion, 38 million share buyback. The headline figure is that 38 million shares is 26.14% of shares outstanding excluding treasury shares. Given the market cap at the time of announcement was ¥256 billion, it is a bit less than 20%, which is still a lot. With the shares up 16% today, it is worth even less than 20%, but it is still a lot.THAT is worth delving into. 

DeNA

DeNA's Yuuuuuge Buyback