Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

HK Type 4 license through Ballingal Investment Advisors Ltd. 

I'm a highly experienced sell-side analyst with in excess of 22 years of covering Asia Pacific equities, the past 19 years immersed in event strategies encompassing M&A risk arbitrage, directional long/short, stub trades and restructuring.  

My background also includes accountancy (liquidation/bankruptcy/receivership) earlier in my career and as a chief financial officer of a global commodity company based in the US and Mexico.

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a> is up 24% in the past three months compared to ~5% for 8.5%-held <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> and ~6% for the TOPIX.
As a result, the implied stub is at levels only (briefly) surpassed in 2H17 and 1Q2018.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/164/055/original/image_67435027051602142877061.png?1602142878" class="editor-image img-responsive" data-smartkarma-image-id="164055"></figure>
<div class="content-caption">Source: CapIQ. Lines for 6201 &amp; 7203 are base 100 from 10 years ago</div>
The stub expansion is likely driven by demand for materials handling equipment, such as forklifts, which have been on a progressive growth trail recently. TICO is a global leader in forklifts and shares of <a href="https://www.smartkarma.com/entities/kion-group-ag" target="_blank" data-smartkarma-citation="entities:21659:1" rel="noopener">KION Group AG (KGX GR)</a>, a key competitor, are up 36%/85% in the past three/six months.
Yet a closer inspection of earnings does not support TICO's recent outperformance - unless the market is assigning a significantly high valuation for the stub ops. I think the recent movement in TICO is unwarranted, and recommend an unwind trade.
As always, more below the fold.

Toyota Industries (6201 JP) is up 24% in the past three months compared to ~5% for 8.5%-held Toyota Motor (7203 JP) and ~6% for the TOPIX.
As a result, the implied stub is at levels only (briefly) surpassed in 2H17 and 1Q2018.

Source: CapIQ. Lines for 6201 &amp; 7203 are base 100 from 10 years ago
The stub expansion is likely driven by demand for materials handling equipment, such as forklifts, which have been on a progressive growth trail recently. TICO is a global leader in forklifts and shares of KION Group AG (KGX GR), a key competitor, are up 36%/85% in the past three/six months.
Yet a closer inspection of earnings does not support TICO's recent outperformance - unless the market is assigning a significantly high valuation for the stub ops. I think the recent movement in TICO is unwarranted, and recommend an unwind trade.
As always, more below the fold. 

Toyota Industries (6201 JP): Trading Rich Vs Toyota Motors