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

Hitachi Transport & SG Holdings:  Consciously Uncoupling

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/seino-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:13248:1" rel="noopener">Seino Holdings (9076 JP)</a>, based in Gifu Prefecture (two prefectures east of Kyoto, directly north of Nagoya), is a combination transportation logistics company and car dealer, with a few other local specialties tacked on.It has 10 auto sales branches in Gifu, Shiga (next door between Gifu and Kyoto), Aichi (just south), and Tokyo, plus a unit in the Philippines, and together they sell about US$1bn of autos a year. Most of its transportation business is warehouses/logistics and truck transport but in the last couple of years it has started executing a "modal shift" to increase domestic transport by rail and ship. It has started working with partners to reduce its carbon footprint in everything it does. <h2>The NEW News</h2>Yesterday, the company reported its <a href="https://www.seino.co.jp/seino/media/pdf-lib/20200513-03.pdf" target="_blank" rel="noopener">full-year earnings</a> (Japanese only) to March 31, with revenue +1.4%yoy, OP -5.7%, and Net Profit +21%.Somewhat unusually, it provided a forecast for the year to March 31, 2021. And it isn't pretty. Revenue is scheduled to drop 10.4%, OP is scheduled to drop nearly 55%, and Net Profit is guided to fall 71%. Given the quantum of this move, and given the fact that few of their customers seem willing to forecast their own revenues, this guidance has to be seen as speculative at best, even though it is the kind of company with extremely stable revenues normally. To mitigate the potential damage from this, the company announced (also only in Japanese) <a href="https://www.seino.co.jp/seino/media/pdf-lib/20200513-05.pdf" target="_blank" rel="noopener">a large buyback</a> today. A very large buyback. It is up to 20 million shares for up to 20 billion yen, to be executed between 14 May 2020 and 23 December 2020. The oddly-specific end-date is somewhat unusual, but it is possible this leaves room to buy back more shares if needed in fiscal Q4 if the shares remain under pressure. This is, after all, a VERY cash-rich company.

Seino Holdings (9076 JP), based in Gifu Prefecture (two prefectures east of Kyoto, directly north of Nagoya), is a combination transportation logistics company and car dealer, with a few other local specialties tacked on.It has 10 auto sales branches in Gifu, Shiga (next door between Gifu and Kyoto), Aichi (just south), and Tokyo, plus a unit in the Philippines, and together they sell about US$1bn of autos a year. Most of its transportation business is warehouses/logistics and truck transport but in the last couple of years it has started executing a "modal shift" to increase domestic transport by rail and ship. It has started working with partners to reduce its carbon footprint in everything it does. The NEW NewsYesterday, the company reported its full-year earnings (Japanese only) to March 31, with revenue +1.4%yoy, OP -5.7%, and Net Profit +21%.Somewhat unusually, it provided a forecast for the year to March 31, 2021. And it isn't pretty. Revenue is scheduled to drop 10.4%, OP is scheduled to drop nearly 55%, and Net Profit is guided to fall 71%. Given the quantum of this move, and given the fact that few of their customers seem willing to forecast their own revenues, this guidance has to be seen as speculative at best, even though it is the kind of company with extremely stable revenues normally. To mitigate the potential damage from this, the company announced (also only in Japanese) a large buyback today. A very large buyback. It is up to 20 million shares for up to 20 billion yen, to be executed between 14 May 2020 and 23 December 2020. The oddly-specific end-date is somewhat unusual, but it is possible this leaves room to buy back more shares if needed in fiscal Q4 if the shares remain under pressure. This is, after all, a VERY cash-rich company. 

Seino Holdings (9076) - Delivering Cash Back in BIG BUYBACK, May Be an MBO Candidate