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08-03-2010, 05:10 PM   #16
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QuoteOriginally posted by RonHendriks1966 Quote
This is a nonsens thread.
It's actually not — it's based on a real report from a financial group, and so fits well in this forum.

QuoteOriginally posted by glanglois Quote
at the bottom of page four, under Risks.
That's actually, somewhat ironically, under "Upside risks" — in other words, if this thing which they don't expect to happen would happen, the company would probably outperform this prediction.

In this case, it's "...decisions earlier than expected and on better than expected terms for the sale of the Pentax camera operations...", but oddly, the rest of the document doesn't mention those expectations.

These reports are produced quarterly, and often they contain a lot of text recycled from the previous version. My guess is that this paragraph got left in, even as the prediction changed.

From the intro to this article and my reading of articles about Hoya's own quarterly report, I remember that one of the big items is that Pentax Imaging is no longer a separate group; Hoya consolidated its previous seven groups to three. This does not seem at all what they would do if they were aiming to sell it off again immediately, which is probably one factor in why that prediction went away.

08-03-2010, 05:34 PM   #17
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QuoteOriginally posted by glanglois Quote
Did you read it?
Yes I did and this is not Hoya's voice : this is the point of view of Citi.
And as we have experienced many times in the past, bank's interest is not always in the interest of a company...
08-03-2010, 05:37 PM - 1 Like   #18
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QuoteOriginally posted by glanglois Quote
at the bottom of page four, under Risks.

Others with investment experience may comment. I think the reasons to sell are very clear: Hoya does not like low margins, small market share, and small profits for a lot of work. Not their style. And it's often easier to sell a profitable business ....
I have considerable professional experience reading, using and distributing investment research in general and Citi research in particular for over 20 years.

The analyst states an investment thesis and recommendation. The world is not perfectly predictable. Circumstances that MIGHT cause the recommendation to result in a less than optimal result (including events where the price outcome is better than predicted, so the risk is opportunity cost or loss if short) are Risks. They are unknowable. The sale of Pentax would, should it occur, alter the predicted outcome.

To me this report is one in a series. It assumes the reader has contextual knowledge of the ongoing opinion on Hoya. These notes are brief updates to much deeper, in depth Research Reports. In such a report the analyst would have made an in depth analysis for the potential timing and value of a sale of Pentax.

To the poster who believes the paragraph is boilerplate left over from the prior quarter, I assure you compliance officers review every word, coma, period and character format of these releases. Nothing is an erroneous entry.

Further, the Japanese division of Citi is not fully integrated in Global Markets. The research writing is often not to the same standard as New York, London or the quant group in China. Last, the report is imperfectly translated from Japanese.

In analysts language a Risk is just that - an unpredictable but possible future event that would alter the Base Case outcome.

Nothing special here.

Last edited by monochrome; 08-06-2010 at 07:31 PM.
08-03-2010, 05:48 PM   #19
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QuoteOriginally posted by Kunzite Quote
I bet on McDonalds.
agree

08-03-2010, 06:02 PM   #20
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QuoteOriginally posted by monochrome Quote
In analysts langauge a Risk is just that - an unpredictable but possible future event that would alter the Base Case outcome.

Nothing special here.

That is what I was going to say. This Risk secion is here to remind investors which factors can alter the analysis previously descrbed. It is NOT an estimation of what will happen.
So, in my opinion, no, Hoya is not planning to sell Pentax... yet. But witihn a few years, it is probably in there projects, when they can get a max of money by selling it. And for that, they need to give Pentax products offering a higher market price. EVIL is the new "market to be" in Japan. Starting EVIL camera can also be the best way for Hoya to improve selling price of Pentax Imaging.

PS: if you read Risk chapter, you will see that for analyst, selling Pentax early (within next year?) is a risk, but also not selling Pentax as early as expected is another one! Their opinion seems to be clear on what Hoya plans to do.
08-03-2010, 06:05 PM   #21
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08-03-2010, 06:08 PM   #22
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The term "Exit Strategy" can be interpreted a number of different ways. For example, it can be taken the way the OP is interpreting it, that Hoya intends to eventually sell Pentax and is working toward this goal. The way the report reads, without context, does make it sound like this.

On the other hand, just because you have an exit strategy as a company doesn't mean you need to execute it. I imagine it would be in Hoya's best interest to develop Pentax into an attractive commodity in case they ever need to sell it or choose to go in a different direction, even if they have no intention of doing so at the moment. That's probably part of why it was important to them to make Pentax profitable, as they'd likely get a better price for a profitable camera division than a failing bargain bin company that a vulture company would only be interested in for the patents or other reasons.

Either interpretation doesn't seem out of the question to me. Wasn't it just last fall that JVC Kenwood was rumored to be buying Pentax? We've already reached another year and nothing of the sort from JVC or any other company has come to pass. And even if they did sell Pentax, there's no guarantee that it wouldn't keep existing much like it has under Hoya's control. There's too much that hasn't happened yet to be worried about it.
08-03-2010, 06:52 PM   #23
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QuoteOriginally posted by monochrome Quote
I have considerable professional experience reading, using and distributing investment research in general and Citi research in particular for over 20 years.

The analyst states an investment thesis and recommendation. The world is not perfectly predictable. Circumstances that MIGHT cause the recommendation to result in a less than optimal result (including events where the price outcome is better than predicted, so the risk is opportunity cost or loss if short) are Risks. They are unknowable. The sale of Pentax would, should it occur, alter the predicted outcome.

To me this report is one in a series. Ot assumes the reader has contextual knowlege of the ongoing opinion on Hoya. These notes are brief updates to much deeper, in depth Researxh Reports. In such a report the analyst would have made an in depth analysis for the potential timing and value of a sale of Pentax.

To the poster who believes the paragraph is boilerplate left over from the prior quarter, I assure you compliance officers review every word, coma, period and character format of these releases. Nothing is an erroneous entry.
Further, the Japanese division od Citi is not fully integrated in Global Markets. The research writing is often not to the same standard as New York, London or the quant group in China. Last, the report is imperfectly translated from Japanese.

In analysts langauge a Risk is just that - an unpredictable but possible future event that would alter the Base Case outcome.

Nothing special here.
+1

My point was not that this is a boilerplate risk analysis, but that after Hoya bought Pentax, the economy turned south, credit was brutal to come by, and Hoya tok on debt to acquire.

So they shopped Pentax around, as well all know, maybenot with misgivings around being a camera manufacturer, but more about dumping debt. For Hoya having a substantial retail product arm is a very different proposition than their traditional B2B model. It's been very clear to me Hoya has struggled with the marketing and distribution of Pentax.

So they left the shopping around option in the prospectus because I doubt it has been explicitly taken off the table. It's very difficult to undo a risk profile once stated. It's a contingent risk. I see no contingency. The 645D says otherwise, in fact.

Carry on.

08-03-2010, 08:03 PM   #24
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QuoteOriginally posted by Votesh Quote
Where does it say anywhere in that document that Hoya is selling Pentax?
It explicitly says: "Hoya plans to release a mirrorless camera under Pentax brand that is distinct from models already on the market." How would they release a mirrorless camera under the Pentax brand if they didn't own the Pentax brand?

Pentax is making them money, so why sell?
It also talks about a Pentax exit strategy in the document.
08-03-2010, 08:04 PM   #25
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QuoteOriginally posted by monochrome Quote
To the poster who believes the paragraph is boilerplate left over from the prior quarter, I assure you compliance officers review every word, coma, period and character format of these releases. Nothing is an erroneous entry.

Further, the Japanese division od Citi is not fully integrated in Global Markets. The research writing is often not to the same standard as New York, London or the quant group in China. Last, the report is imperfectly translated from Japanese.
Aren't these two statements at odds with each other, rather than the second being a "furthermore"?
08-03-2010, 09:10 PM   #26
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Kodak

I bet it's Kodak. Why else would it be reported by Citi? Citi and Kodak are based in the US. Kodak also bought Chinon (based in Japan) years ago but killed the Chinon brand name. Pentax would give Kodak a strong foothold into camera manufacturing again.

This is just my speculation. To me the last good Kodak product was Porta film, Kodak just does not make good products, especially digital cameras. Kodak overall just makes junk. I feel sorry for Pentax if Kodak did purchase them from Hoya.



QuoteOriginally posted by glanglois Quote
Per the purported Citigroup analysis, Hoya will sell Pentax as soon as possible. For all we know the deal is complete but not announced until photokina. Perfect timing.

http://www.mirrorlessrumors.com/wp-content/uploads/2010/08/Hoya-SBJ-2010-08-03.pdf

So on with the speculation .....

1. A direct competitor. Sony in desperation? Panasonic moving up from m43?

2. A company on the fringe of the SLR makers. Samsung? Sigma?

3. Photo-but-not-camera company. Tokina? Epson?

4. Consumer electronics but not photo company. JVC?

Just off the top of my head - no research.

Perhaps there will be a very, very big announcement in Koln.
08-03-2010, 11:46 PM   #27
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QuoteOriginally posted by Angevinn Quote
I bet it's Kodak. Why else would it be reported by Citi? Citi and Kodak are based in the US.
So you're guessing that Hoya went to Citi directly and bought this analysis? And that it wasn't someone else attempting to .. I dunno, manipulate Hoya's stock price? Discredit the company? Or do any of the countless other things that they use investment bank research for?

QuoteOriginally posted by Angevinn Quote
Pentax would give Kodak a strong foothold into camera manufacturing again.

This is just my speculation.
It wouldn't be the end of the world. Certainly less ludicrous and disastrous than a near-bankrupt and non-participatory JVC as per last year's commentary.

It seems to me that what Pentax needs in an owner and/or partner is distribution in the consumer electronics field, someone who's interested in cameras. Perhaps Hitachi?

QuoteOriginally posted by Angevinn Quote
To me the last good Kodak product was Porta film, Kodak just does not make good products, especially digital cameras. Kodak overall just makes junk.
Porta's great, I shoot it all the time.
08-04-2010, 01:09 AM   #28
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QuoteOriginally posted by Angevinn Quote
I bet it's Kodak.
It can't be; think about it, why would Kodak buy Pentax?
It has to be McDonalds, or KFC - maybe even Starbucks... I think McDonalds is the answer, but I like the idea of Starbucks buying Pentax - finally we'll see a Pentax coffee mug (btw, if we won't, I'm afraid I'll have to switch to either Canon or Nikon)
08-04-2010, 01:27 AM   #29
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QuoteOriginally posted by glanglois Quote
But this wording does not speak of the risk of sale of Hoya. At least I didn't catch it.

The risk is that Citi's evaluation of Hoya's target share price will be incorrect if Hoya does not divest itself of Pentax sooner rather than later.

The target price appears to apply to Hoya's current fiscal year.
That's not what it says at all. It lists upside risk as "decisions earlier than expected and on better than expected terms for the sale of the Pentax camera operations or
the media operations in the memory disk business".

Upside risk means a risk that would increase the value beyond their projections. Selling off pentax would, in their opinion, increase the price of Hoya stock. That is what they are saying. It doesn't mean it is going to happen, it means they see it as a possibility they need ot cover their ass on in terms of investment advice.
08-04-2010, 03:35 AM   #30
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Hoya sold their "memory disk business" to WD.
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