jpan economy is still #2, page-13

Thank you for thoghts;

my response:


(Yes i agree that number of shares are not what i indicated:

i put it for ilustration point only.

The point i am making is that after conversion NTA will stay at 33c per unit; (like in the expamle i gave before ))

In your expample you already assumed 5% reduction in asset value whereas i did not : let me go thru your numbers without 5 % reduction and you will seee that NTA will be @33c per share after conversion (again calculating it your ligical way):



Starting equity 16.58B Yen (agreed)

Less 5% reduction in property values -3.8B Yen (do not agree)

Less capitalising interest on Mezz debt -0.25B Yen (can not check but assume will eat into equity , yes)

New equity at Japan TK level 12.53B Yen (my number is 16.25 B YEN)

Convert to AUD $152M over 405m units equals $0.38 per unit. Now this is the NTA that would be shown in the accounts. However it is not a true reflection of the underlying value until you convert the bond. So let's do that: (now you convert @ 82 December 09(?) which is making it worse the June rates here you values take another HIT ; now it is 78 what rate will be going forward is big question I will bet on rate staying 75-80

Japan TK equity 12.53B Yen (My number 16.25 B Yen)

Add 1.2B Yen for debt converted to TK equity. New equity 13.73B Yen (my number is 17.45)

Now GJT only holds 60% so GJT's share is 8.23B Yen. (my number 10.47 Bn Yen)

Convert to AUD and you have $100m. Over 405m units is 24.6 cents per unit with a liability to asset ratio of around 85% (Convert to AUD now: 10.47BN Yen divided by 78 = AUD 134mln)
(AUD 134 mln divided by 405mln units = 33c per share)


(Our major disagreements are:

1. You say it will devalue by 5 % ( I say it will not and in fact I think value will go up); Japan property started to go up after long period of deflation but was stoped due to GFC !!!
2. Rates you say rates will be at 82 ( I say Yen will be below 80) ;

AND that what crates different in our figures and opnions about buying opportunity !!!

First test will be nest week , let see by how much compnay will devalue its ASSETS ; let not take Exchnage rate flactuations !


In fact I think Japan will start coming out of recession faster then US/Europe and being close to China is a huge plus ; Possibility of deflation is a concern but not much after change of Government and push the banks to start lending; )

0.523 405,000,000 211,815,000
0.057 265,000,000 15,000,000 Bonds conversion
0.339 670,000,000 226,815,000 After bond converstion


Anyway it is good to talk to you and see somebody who calculates! ( we only differ on assumptions)