TSMC and Kioxia supplier buying back shares and selling its HQ for up to 2/3 its market cap

Part one of the TSMC supplier basket.

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Dear readers,

We have now netted very quick doubles in the shape of Seikoh Giken and Union Tool, just four months after starting our search for companies in Japan.

This newsletter turns six months old in a few days, and we have now handily exceeded the US$ 100k ARR milestone, putting us on the same ARR trajectory as Stratechery

Capital flowing to APAC industrials has helped our cause, but we also could not have done it without you. Thank you.

We are still finding many Japanese TSMC suppliers that either have reasonable valuations or have an interesting set up, and which may warrant quick basket-sized positions.

Today’s post is about one such position, from a new contributor to the newsletter. He is a European analyst with hundreds of write-ups and thousands of followers on Seeking Alpha.

At his request, I visited the company’s headquarters in Japan. It is an impressive building five minutes from the Shinkansen, which I understand makes it a relatively attractive and liquid asset.

The company supplies equipment and consumables to TSMC and Kioxia, has recently repurchased more than 5% of its shares, and has resolved to sell its headquarters to unlock more shareholder value. It also appears to have relatively good IR published in English.

Intriguingly, according to Gemini, a sale of the building could net up to 2/3 of the company’s market cap.

What follows is his note, followed by my notes on the building and the area surrounding it.