Great timing on the write up, thanks! Would guess it has more room to run on dividend hike
Also saw their manufacturing facility outside of Columbus Ohio was appraised by the local county at ~16m vs. the market cap of ~100m or so after today's move. Think they had another sizable facility in the US but value here is so obvious I didn't think to check it
We're in net net land while ignoring the real estate. The RE is required to operate the biz, so not really easily sellable. A small bonus for sure! I get excited when I see stuff like rental RE on the balance sheet on a net net. ie, Kinki Sharyo's rental real estate is prob worth close to its mcap.
It's a half basket sized position. Poison pill mostly means the likely eventual buyer is management themselves. Or maybe poison pill eventually goes away as governance slowly improves.
Yes poison pill is bad, but the price of this thing is less than free given current assets and inv securities.
Hello, thanks for the interesting idea. In the course of your research, did you come across the fact that the company intends to consider the Tokyo Stock Exchange's "Action to Implement Management that is Conscious of Cost of Capital and Stock Price" initiative? (The increased dividend in 2024 is presumably already an indication of this.)
They are listed as 'disclosed' by the TSE as their corporate governance report mentions they will do additional disclosure. They have begun putting out presentations and mentioned they are aiming for a payout ratio of 30% or more. Estimated payout ratio for FY2025 is 42%.
It is striking that companies from the automotive industry and suppliers are generally very low valued at the moment around the world. For example, the giants Volkswagen and Stellantis are trading at a P/E of 4. Honda Motor trades for a P/E of 6. I assume that there are structural problems in this industry.
Auto manufacturors are a different beast. A LOT of employees and very capital heavy. I stay away from that industry. Auto parts are a bit easier to wrap your mind around.
I have some exposure so far. I am invested in Porsche Automobil Holding because it offers a discount of about 30 - 50% compared to its holdings in Porsche and VW which are both listed (sum of the parts valuation). However, the company is probably too large for this discount to disappear. I also hold the French stock Akwel, which trades at an EV / EBITDA of less than 1 and a P/E of 5.6, P/B of 0.3.
Great timing on the write up, thanks! Would guess it has more room to run on dividend hike
Also saw their manufacturing facility outside of Columbus Ohio was appraised by the local county at ~16m vs. the market cap of ~100m or so after today's move. Think they had another sizable facility in the US but value here is so obvious I didn't think to check it
We're in net net land while ignoring the real estate. The RE is required to operate the biz, so not really easily sellable. A small bonus for sure! I get excited when I see stuff like rental RE on the balance sheet on a net net. ie, Kinki Sharyo's rental real estate is prob worth close to its mcap.
Tigers Polymer (TYO 4231) up 10% today on dividend hike and earnings revision upwards. Good timing on the writeup.
I found some other Japanese net-nets that are covered here:
https://favonahathaway.substack.com/p/a-walk-through-the-land-of-the-rising
Are you not put off by the poison pill?
It's a half basket sized position. Poison pill mostly means the likely eventual buyer is management themselves. Or maybe poison pill eventually goes away as governance slowly improves.
Yes poison pill is bad, but the price of this thing is less than free given current assets and inv securities.
Hello, thanks for the interesting idea. In the course of your research, did you come across the fact that the company intends to consider the Tokyo Stock Exchange's "Action to Implement Management that is Conscious of Cost of Capital and Stock Price" initiative? (The increased dividend in 2024 is presumably already an indication of this.)
They are listed as 'disclosed' by the TSE as their corporate governance report mentions they will do additional disclosure. They have begun putting out presentations and mentioned they are aiming for a payout ratio of 30% or more. Estimated payout ratio for FY2025 is 42%.
Thanks for sharing,
It is striking that companies from the automotive industry and suppliers are generally very low valued at the moment around the world. For example, the giants Volkswagen and Stellantis are trading at a P/E of 4. Honda Motor trades for a P/E of 6. I assume that there are structural problems in this industry.
Auto manufacturors are a different beast. A LOT of employees and very capital heavy. I stay away from that industry. Auto parts are a bit easier to wrap your mind around.
I have some exposure so far. I am invested in Porsche Automobil Holding because it offers a discount of about 30 - 50% compared to its holdings in Porsche and VW which are both listed (sum of the parts valuation). However, the company is probably too large for this discount to disappear. I also hold the French stock Akwel, which trades at an EV / EBITDA of less than 1 and a P/E of 5.6, P/B of 0.3.
I'm familiar with PAH3. It's been a popular value story for a long time and it does look very cheap!