Thursday, March 27, 2014

Dynam Japan purchased

Dynam Japan (HK:6889) has been on a wild ride. Since I purchased at $16.86 last year the shares have traded as high as $36.70 and fallen sharply since then. This morning I added a few more shares to the portfolio at HK$22.00 per share.

The story remains largely unchanged - strong cash flows from the Japanese pachinko business (a shrinking industry), a small shareholding in Macau Legend (HK:1680), a question over the impact of an increase in Japan's consumption tax and the potential to be one of the early movers as and when Japan legalises casinos. The only recent developments appear to be (i) an arrangement for the distribution of pachinko machines in Macau and (ii) a lawsuit which does not appear to be material to shareholders in the company.

With a dividend yield of 4.8% (less Japanese withholding tax), this is essentially a case of being paid to wait for Japan to legalise casinos.

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