1897 Kaneshita Construction
- Jul 15, 2025
- 1 min read
Kaneshita is a general construction company based in northern Kinki. Founded in civil engineering. Strong in public sector demand, including road paving. Expanding private construction sector. Good balance sheet.
https://x.com/mr_deepvalue/status/1975975981081907307?t=JlHL206b7bGKzIdHrvn_7g&s=19
One of my largest positions. I first wrote to management on 6 January to advocate for changes to capital allocation policy. They announced a 3% buyback of outstanding shares in mid-February.
I sent a follow-up letter with a "proposal to close the valuation gap" on 12 February. At that time, with the share price around ¥2,690, the Company traded at a:
* 29% discount to Cash holdings (approximately ¥3,807 per share).
* 31% discount to Net Current Asset Value (approximately ¥3,923 per share).
* 63% discount to Net Financial Value (net cash + l/t investments; approximately ¥7,289 per share).
* 69% discount to Book Value (approximately ¥8,565 per share).
My message to management: ¥12.3 billion of stranded liquid assets are held…
Kaneshita is actually a relatively popular name among retail investors coz (i) this is net net trade (ii) they are HQed near Amanohashidate - tourist destination by the sea and (iii) opened a local sushi restaurant giving shareholders reason to attend SH mtg and eat the sushi during the stay lol
net cash of 14 bil yen against the mkt cap of 10 bil yen.
low trading volume w/ 40% treasury shares
earning is thin at 0.3 bil yen, and competition as well as maintaining margin for regional construction is hard under current inflationary environment
Historically boutique activist Black Clover bot 11% and later sold back to the issuer in a buyback right b/4 COVID. (This fund is now facing SESC proceeding for unlicensed solicitation activity in Japan, so unlikely to come back even when the stock falls this low)