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

TASAKI: [CORRECTION]: Glaring error in my analysis

Event-Driven

As their website says, TASAKI (7968) is Japan's only 'Maison' which has its own pearl farm. TASAKI has been in business for ~70 years, was listed in 1985, and is one of Japan's well-known jewellery store brands. The company has been selling pearls and diamonds in Ginza since forever it seems and is one of two ubiquitous pearl maisons in Japan.What had been a pretty sad story of net profits for many years turned into a bad story in 2008 on the operating side. In late 2008, the Tasaki family relinquished control, MBK Partners injected capital and new management, the company restructured very heavily for four years and has now started seeing those efforts pay off. Net profits in H1 this fiscal year were double what the company has earned on any full year in the last 20 years. There is a turnaround. Then it gets interesting.We have a <a href="http://www.smartkarma.com/lab/insights/970/sale%20process" target="_blank">sale process</a>, a sharp increase in annual <a href="http://www.tasaki.co.jp/corporate/ir/pdf/2015/whats189.pdf" target="_blank">forecasts</a>, a <a href="http://www.tasaki.co.jp/corporate/ir/pdf/2015/whats190.pdf" target="_blank">conversion</a> of MBK's prefs so that at one point this month MBK owned almost 80% of the common shares. An <a href="http://www.tasaki.co.jp/corporate/ir/pdf/2015/whats193.pdf" target="_blank">expression of intent</a> by MBK to sell its stake. We then have an aggressive and accelerated effort by the company to buy back its shares (it <a href="http://www.tasaki.co.jp/corporate/ir/pdf/2015/whats201.pdf" target="_blank">bought back</a> 24+% of shares outstanding last Friday).MBK now has a 72% stake (9.65mm shs out of the ~13.45mm shares extant ex-Treasury shares). There is no recent media news regarding a sale of the company. But the company has a forward PER (based on its own forecasts) of 13x while growing revenues 19% and income 112% this year. It will have an ROE over 20% this year.And TASAKI is in prime position (along with <a href="http://www.smartkarma.com/insights/seibu-holdings-tough-deal-to-swallow-long-term-there-s-hope" target="_blank">certain hotel chains</a>) to benefit from a significant and perhaps still under-estimated inbound China tourism &amp; spending story.If you look at smaller-cap catalyst-driven situations, TASAKI deserves your attention.More below the fold.

As their website says, TASAKI (7968) is Japan's only 'Maison' which has its own pearl farm. TASAKI has been in business for ~70 years, was listed in 1985, and is one of Japan's well-known jewellery store brands. The company has been selling pearls and diamonds in Ginza since forever it seems and is one of two ubiquitous pearl maisons in Japan.What had been a pretty sad story of net profits for many years turned into a bad story in 2008 on the operating side. In late 2008, the Tasaki family relinquished control, MBK Partners injected capital and new management, the company restructured very heavily for four years and has now started seeing those efforts pay off. Net profits in H1 this fiscal year were double what the company has earned on any full year in the last 20 years. There is a turnaround. Then it gets interesting.We have a sale process, a sharp increase in annual forecasts, a conversion of MBK's prefs so that at one point this month MBK owned almost 80% of the common shares. An expression of intent by MBK to sell its stake. We then have an aggressive and accelerated effort by the company to buy back its shares (it bought back 24+% of shares outstanding last Friday).MBK now has a 72% stake (9.65mm shs out of the ~13.45mm shares extant ex-Treasury shares). There is no recent media news regarding a sale of the company. But the company has a forward PER (based on its own forecasts) of 13x while growing revenues 19% and income 112% this year. It will have an ROE over 20% this year.And TASAKI is in prime position (along with certain hotel chains) to benefit from a significant and perhaps still under-estimated inbound China tourism &amp; spending story.If you look at smaller-cap catalyst-driven situations, TASAKI deserves your attention.More below the fold. 

TASAKI:  A turnaround-slash-company-sale-slash-huge-buyback-slash-China-inbound-tourism-story

Tasaki & Co Ltd

TASAKI: A turnaround-slash-company-sale-slash-huge-buyback-slash-China-inbound-tourism-story