Unbeknownst to me, until now, a TAKEOVER offer for my Soshin Electric was made 3 days ago by Kamaya Electric!

 

The offeror is a Taiwanese company & the TOB is being made at a 32% discount to the co's book value. I originally speculated that it would make a quasi- double bottom formation spanning the 2020-2023 period but instead it declined another -18% to finally bottom around Christmas. In early March there was a strong intra-day surge to ¥366 on higher than usual volume: apparently insiders were busy snapping up the shares ahead of  the TOB announcement. My original prediction of a double bottom was vindicated, BUT  on the daily timeframe instead of the monthly one, spanning the Dec/Feb period at ¥283 / ¥284. Only on digging deeper did I become aware of a prior ¥460 offer by the same co. in Dec '20 that resulted in Kamaya replacing NGK as the 40.4% major shareholder ( the latter retaining a 5% stake), which nonetheless did not prevent the share price decline to below ¥300.

The offer is at a 38% premium to my entry price almost 7 months ago, with one tiny dividend already pocketed. The chances of an increased offer is 40% by my estimation since the co. recommends the TOB. It's my THIRD takeover involvement after Teraoka Seisakusho in October & Chuo Built in December. The former ended its 37-year history as a listed company earlier this month, my 2nd biggest Japanese earner in my 7th year of involvement in the Tokyo Stock Exchange.

Good ol' Japanese blue-chip Panasonic(formerly Matsushita Industrial) rounds out a record FIFTEEN this week!

 The Gainers' List(22/3/24):

1. Nomura +65%              ¥192,300

2. Tomita E  +28%           ¥164,000

3. Katsuragawa +58%   ¥85,500

4. Seikoh Giken +37%    ¥177,100

5. Fujix +10%                     ¥172,600

6. Nichiwa S +27%            ¥59,500

7. Ogura Clutch +4%       ¥333,300

8. Aida Eng +15%               ¥87,900

9. Kuroda P +9%               ¥136,100

10. Fujisash  +10%              ¥87,500 

11.Mochida Pharma +4% ¥323,800

12. Ono Sokki +33%       ¥62,000

13. Nepon +6%                ¥182,700

14. Panasonic +7%         ¥144,300 

15. Shindengen E +4%  ¥313,000

Forget NEXT week, a miracle manifested TODAY!

The biggest Japanese investment bank-cum-broker, Nomura, soared past its ¥980 high in 2013 at the height of the Abenomics euphoria, before losing 2/3 of that price by 2019, which was a year after I participated as an equity owner for the 1st time ever.

Heartbreak in 2021 when a+20% paper gain was wiped out & turned into an immediate paper loss when the Archegos debacle, in which the co. lost $2 billion financing the market rigging by a Korean fake rich wannabe, turned into redemption late last year when the stock price nudged above my ¥596.90 breakeven. Although I did sell 60% of my position for a ¥17,305.11 profit far too early on hindsight( in the ¥630 & ¥810 range), such things are highly unpredictable & nonetheless contributed to a much-coveted gain(+dividend) in advertising heavyweight Dentsu.

The coming days will reveal if it can convincingly bust through the ¥1,000 threshold, a level unseen since 2008!!!

The number of Japanese paper gainers also nudge up to a record 14 as Shindengen Electric rises 1.28% to pass the breakeven point of ¥3,133 on a long position initiated Dec 3rd & Fujisash sits right on its own breakeven point from a long position entered October 2020!

 

A wonderful miracle is due to manifest next week!!!

 

The Great YTL Premium in Tokyo!

The M'sian stock, which has been a star performer since a year ago, vaults inexplicably to a LIMIT UP level of about M$3.50 early in Tokyo trading & still closed impressively ahead by 28%, compared to the M$2.77 level at the midday KL close, a level significantly higher than the M$2.62 open when the aforementioned  feat was attained!

 

List of Japanese paper gainers expands again, equaling the peak on Thaipusam (25 Jan)!

 A few weeks after the disappointment of Alps Alpine falling clear OUT of the winners' circle & newly acquired Panasonic unable to sustain momentum after a blowout quarter & a week after long losing Tobishima blew past its own breakeven point dating back to early '23 only to fall back into a paper loss, this week witnessed fresh, NEW members entering the Gainer's list:

Despite falling back 4.27% today, Ono Sokki is up 21% on the poor entry in July & one of the newest to go into the black. Ogura Clutch fell out last week & re-entered this week, 4% higher than last year's entry. Aida Engineering is the very latest to turn black from red after announcing an increase in its share buyback limit, rising 5.43% today & stands 11% above 2022's entry price, jointly with recent purchase Kuroda Precision, firming 3.75% today & standing 9.6% above the ¥1,287 entry. Mochida Pharma re-entered the black after falling in & out of it several times 5 weeks after entry. Long-suffering aspiring two-timer Fujisash broke into the black yesterday but dropped back 4% today, still ¥3 above its minimum breakeven point.

The other longer standing members who maintain their gains are Nomura,  Katsuragawa, Nichiwa Sangyo, Fujix, Seikoh Giken & Tomita Electric: the last two widening their gains in March, now standing at +27.8% & +31.8% respectively.

The Gainers' List(15/3/24):

1. Nomura

2. Tomita E

3. Katsuragawa

4. Seikoh Giken

5. Fujix

6. Nichiwa S

7. Ogura Clutch

8. Aida Eng

9. Kuroda P

10. Fujisash 

11.Mochida Pharma

12. Ono Sokki

Has the Nikkei index peaked at 40,472.11?

 

Just one month short of the 9 months between the Aug '22 & Jun '23 interim summits, with slight bearish divergence on the RSI, but not on the MACD indicators. I had already stopped buying before the stock index went above the 39,000 level in late Feb, cautious about the estimated 56-44 probability of a sharp pullback that would accompany a double-top scenario!

The nearest month futures have gone from a slight premium in early March to a 500+ point discount currently.

My Tomita Electric ( トミタ電機 ), about to mark 3 full months of ownership, goes LIMIT UP(stop high) in Tokyo!

 

 

The long odyssey with GE is about to end...💗😄💚

Having already returned 18% of my capital invested in late '17 in the form of GE Healthcare & WABTech shares plus a handful of pitiful dividends, I will play it cool & bide my time to see if GE will approach the $180-200 mark envisaged factoring in the upcoming Vernova spinoff going ex- on April 2nd!

The laggard blue chips of Japan : Panasonic & Teijin

 

I have previously traded Teijin once, buying @ ¥1268 and selling @ ¥1397 within one month after the outbreak of the Ukraine war & recently bought into Panasonic @¥1388 the very day it released a stupendously good quarterly report after the market close, not that I predicted it!

Stock du Jour : Toda Kogyo

 

The stock peaked way before the bubble popped, in 1984 at an amazing (adjusted) ¥30,683 in January of that year. From '85-'88, turnover stayed in the ¥15,000 - 18,000 mil range while EPS was ¥400,¥100,¥200 & ¥260 between 85- '88, sustained by the now obsolete VCR & audio tape deck market. In the last 30 years, revenue fluctuated between  ¥16,623 mil in '96 &  ¥43,900 mil in '08, with EPS fluctuating between ¥45 & 80 between '92 & '97(small loss in '94), ¥98 & 182 between '98 & '02 and ¥(1255) & 238 between '03-'13, with the last 5 years showing two massive years of consecutive losses of ¥(917.1) & ¥(718.8) in '20 & '21 before rebounding to ¥566.5 last year & a forecast of a -78% drop to ¥121.2 this year. Capital adequacy ratio has almost doubled from 19.5 in the last huge losing year of '21 to 30.5 currently. Revenue in the last few years has fluctuated between ¥26,500 & ¥35,000 mil.

 Trading giant Itochu used to own 20.66% of the stock until '19, after which another well-known Japanese co. TDK took over that stake. About 5% of the stock is treasury shares. Book value was steady at over ¥6000 from the mid-'80s till '08, reaching a high of ¥6600 in '02 then dropped to 6080 in '08, declining to the low ¥5000s by '13 & then tumbled 72% to ¥1411 in '21 before almost doubling to ¥2744 currently, giving a PBR of 0.52. In its latest quarter, the co. forecast that demand for magnet metals & diaelectric materials will recover going forward. The 200-year-old functional pigments maker has developed catalytic iron oxides that will suppress generation of harmful substances in combustion & is collaborating with two other listed companies in ventures to hoist its share price from the danger line of ¥1,640 that marks the 1 billion mkt cap criterion to avoid delisting. Though still  in a net current assets position, its net-net position has declined from  (¥6,991 mil)  to  (¥8,279 mil) from '23 -'24. Cash & investment securities have decreased from  ¥11,185 mil to  ¥10,603 mil with borrowings rising from  ¥21,717 mil to  ¥22,591 mil while land valued at over ¥6 bil rests on its balance sheet.

Technically, there are both MACD & Stochastics bullish crossovers in the weekly & timeframe & the latter in the monthly timeframe while a nice bullish engulfing pattern has emerged in the monthly chart. The current price is lower than both the '09 & '12 lows and about half the '02 low, though still 60% above the ¥1,043 panic selling low in '20.

Looking back to the bubble peaking period of the late '80s, the price came up against the ¥17,000 (adjusted) resistance at least 6 times between '88  till '90 before tumbling in earnest, repenetrating the ¥10,000 level(¥1,000 back then) 3 times: in '91,'94 & '96 before resuming a decline that brought it down by 2/3 to ¥3,240 in '97 & ¥3,550 in '02. Subsequent rebounds only hoisted it as high as ¥6,380('06) & it got to a few hundred yen short of the the ¥ 1 万 level in late '09 & just before the '11 East Japan quake. Current price is the lowest since 1977, when it spurted to as high as ¥2,799. Currently at 8/9 on the TdM yearly candlestick downtrend count.

Toda Kogyo could turn out to be a classic Peter Lynch-type TURNAROUND play. 

The most watched Japanese equity index comes within 9.77 points of scraping the 40,000 barrier

 

39,990.23 at the intraday peak. Predicted on this blog, but never that it would come so close, so soon in 2024!