8909 - Shinoken Group Co

[RetroRanger]

I agree that Shinoken doesn’t look like a typically Japanese value trap, but spawning née business is a very Japanese thing (that’s how the Keiretsu evolved after all) and many companies start new business lines that often waste capital and don’t work out.
Shinoken does better here because their business seems to be working out. Now we we just need a CEO that is friendly to gaijin shareholders.

Youre right of course about the Keiretsu. But it is just one aspect of Shinoken like stated

@Shameless cloner. Sadly no. If anyone would know LiLus japanese fund name or at least one position, we could easily find out. But without any clou no chance

[keerthiprasad]

I have the feeling for clarification to a few things here!!

1) Jeremy Raper did not sold because of the 3% share spending , He sold before ( you can read that on twitter) because he saw better opportunities. If you follow Jeremy you know that he is seeking way shorter investment stories than Shinoken.

2) Pabrai even increased his stake on 29.01 . You can check that for yourseld on EBINET ( the japanese filing system) . Pabrais Fund code is E36293. But here is the query for you guy, to find his latest filings EBINET Filings. If you use google translate you can see that he increased the amount . And if you look closely you will find out that Pabrai has this position in 2 different funds, not only his Pabrai Fund, but also in the Dhandoo Fund ( i guess for his daughter)

3) "Why is Shinoken any different than all the other Japanese value traps?" Because Shinoken is undervalued even without growth. It is shown in the latest Report from Jeremy Raper and it is even shown in the latest official Shinoken document (mid-long term view) . So even without any future growth you buy the company for less than its asset value... Also Shinoken is not the typical REIT company. It has spawned different stuff, like life insurance, services per app , customer services like managing contracts . Those "managed services" already make 50% of their profit and has even increased during Covid. This is the future of the company.

And i did not even include their expansion programs in Indonesia ( the first official foreigner REIT )

So it is the typical Pabrai move. You have nearly no downside but high potential upside through this "REaaS = Real Estate as a Service" and expansion program. And you have this spawning potential like they have done over the last years.  Look at their 30 years history: https://www.shinoken.co.jp/en/about/history/

Thanks. I think it may be higher quality than most of the typical japanese value traps. However, its not rare to find solid businesses trading below book in Japan. I guess I was trying to figure out why this one has caught on all of a sudden. Jeremy is a really smart guy who I respect. He's also fluent in Japanese, so I trust him more than myself on this haha.

[RetroRanger]

"I guess I was trying to figure out why this one has caught on all of a sudden. Jeremy is a really smart guy who I respect. He's also fluent in Japanese, so I trust him more than myself on this haha."

From what i found out from other japanese investors via twitter...  locals are very "careful" about this one since the Loan Scandals of "Tateru" , "Suruga" , "Leopalace".
That would be one explanation.  But i guess the most compelling difference for me is simply the REaaS = Real Estate as a Service.
They dont rely purely on real estate building/selling anymore.

Shinoken is a company that is 30 years old, survived the real estate crisis/bubble in Japan and is ( thats what it looks like ) able to transform their business model into something more crisis stable.
And thats really working out. Also you have to look closely to Indonesia.. Its important that the model works their too. If so, you have an additional catalysator for healthy growth in the next 10-15 years. If you read through their long term vision, they are planing to do this in more and more external locations.


The biggest risk is, that the undervaluation is never really "seen" by the market or the trust of people is broken for those kind of companies ( like with the telekom stocks back than in Germany).
Another risk is, that the company does not act in a gaijin friendly shareholder perspective...  But the management Team "delievered" the last 15-20 years.

But Pabrai owns nearly 7% of the company. So i guess he even has some more insights we dont see or get.

[zuminsan]

Hey there,
First time getting involve in the forum and love the back and forth on the story!
Just a personal income, they were not quite as friendly as I thought even, I actually try calling their headquarter and try to speak to someone at the IR department, they don’t have a separate number for people who speak English even though the PowerPoint slide indicated to call. When I finally transfer over to someone who speaks English, they took down my name and promised someone will call back. Unfortunately, all I got was a email and telling me to schedule meeting through brokerage.

Not quite sure what they mean by silent period. Maybe they assume that I was gonna ask about their earning before they release it, I don’t know. I thought it was pretty interesting and wanna share it with everyone.
 

_______


Hi,

Thank you for your prompt reply.

I'm afraid we are currently in our silent period prior to our
disclosure (FY 2020 results) on February 12.

If you wish for a conference call after that as an institutional investor,
please provide the background information of
your company or that of your partnership fund.
And kindly request through a stock broker company to arrange it.

As for our company information,
Please refer to our material we have on our website.
https://www.shinoken.co.jp/press_ens/get_img/181/file1_path
(If you already have, my apologies..)

Thank you so much and best regards,
Yuki Otowa
Shinoken Group

[RetroRanger]

From what i know this is practicle behaviour. Meeting/Calls will only be hold/scheduled during specific times.

I guess if you were a fund with 1.000.000 shares it would be different.

[RetroRanger]

New stuff from Shinoken:
https://www.shinoken.co.jp/press_ens/get_img/185/file1_path/20210226_185.pdf

Shinoken Office Service (Further referred to as SKO), a subsidiary of
Shinoken Group Co., Ltd. (Tokyo Headquarters: Minato-ku, Tokyo, President
Hideaki Shinohara, TSE Ticker 8909, further referred to as Shinoken, including
the whole group) has acquired all shares and subsidiarized Computer
System Co., Ltd. (Headquarters: Shinjuku-ku, Tokyo, CEO Keiichi Tamura,
further referred to as CSC) as of today, February 26th, 2021. SKO initiates
information system and shared services of administration operations, and
CSC is a software developer.

So an aquisition for their internal digital transformation they need to improve in order to make Reit as a service work in the future

[zuminsan]

Thanks for the new stuff