Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

TSE Tokyo Price Index TOPIX / Event-Driven

<ul>
<li>Every year it's the same trade. But it isn't really. But it kinda is. This year it is Wednesday and Thursday. There are risks to the analysis - notably allocation.</li>
<li>But, ceteris paribus, it is still possibly a ¥1,580,876,450,407 buying spree to take place on one day into the close later this month. Or something close to it.</li>
<li>And for a two-day period, over the last ten years, the average return is 1.60% on these two days with a 9:1 win ratio. Lots of angles here.</li>
</ul>


Every year it's the same trade. But it isn't really. But it kinda is. This year it is Wednesday and Thursday. There are risks to the analysis - notably allocation.
But, ceteris paribus, it is still possibly a ¥1,580,876,450,407 buying spree to take place on one day into the close later this month. Or something close to it.
And for a two-day period, over the last ten years, the average return is 1.60% on these two days with a 9:1 win ratio. Lots of angles here.


The BIG March 2023 "Wednesday Thursday Trade"

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

NTT (Nippon Telegraph & Telephone) / Equity Bottom-Up

<ul>
<li>Segment results for DoCoMo and NTT Data were impressive as NTT plans to restructure both businesses start to bear fruit</li>
<li>DoCoMo is also leading MNOs in moving past the impact of regulatory driven price reductions with Q3 service revenue largely flat YoY supported by 5G upsell and subscriber wins</li>
<li>Rising utility costs have had a material impact on profitability for NTT East and West but management believes upside in other areas and cost discipline provides some offset</li>
</ul>


Segment results for DoCoMo and NTT Data were impressive as NTT plans to restructure both businesses start to bear fruit
DoCoMo is also leading MNOs in moving past the impact of regulatory driven price reductions with Q3 service revenue largely flat YoY supported by 5G upsell and subscriber wins
Rising utility costs have had a material impact on profitability for NTT East and West but management believes upside in other areas and cost discipline provides some offset


NTT (Buy) - Q3 22 Results Reaction: Mixed Quarter but Solid Mobile/Data Performance

Thematic (Sector/Industry)

<ul>
<li>Japan trails global peers in the proportion of payments that are cashless but it is starting to close the gap led by Internet and telecom companies</li>
<li>Rakuten is a fintech leader in Japan (15% of cashless payments) but PayPay is closing the gap as it ramps up cashless app users</li>
<li>We expect compound annual growth in the mid-teens but margin expansion will be limited by competitive intensity</li>
</ul>


Japan trails global peers in the proportion of payments that are cashless but it is starting to close the gap led by Internet and telecom companies
Rakuten is a fintech leader in Japan (15% of cashless payments) but PayPay is closing the gap as it ramps up cashless app users
We expect compound annual growth in the mid-teens but margin expansion will be limited by competitive intensity


Japan Fintech - Cashless Payments Competition Is Heating Up

David Blennerhassett

<ul>
<li>Stay long <a href="https://www.smartkarma.com/entities/ntt-data-corp" target="_blank" data-smartkarma-citation="entities:11232:1" rel="noopener">NTT Data Corp (9613 JP)</a> through mid-January. Then sell. </li>
<li>
<a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a> may drift lower as the street crunches numbers, in tandem with a vacuum of news as Brookfield undertakes its due diligence.</li>
<li>
<a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a> is now upset that YFO has decided to release the reason why Toyo management didn't.</li>
</ul>


Stay long NTT Data Corp (9613 JP) through mid-January. Then sell. 

Origin Energy (ORG AU) may drift lower as the street crunches numbers, in tandem with a vacuum of news as Brookfield undertakes its due diligence.

Toyo Construction (1890 JP) is now upset that YFO has decided to release the reason why Toyo management didn't.


Last Week in Event SPACE: NTT Data, Origin Energy, Toyo Construction, Haidilao, Toshiba

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a> and <a href="https://www.smartkarma.com/entities/ntt-data-corp" target="_blank" data-smartkarma-citation="entities:11232:1" rel="noopener">NTT Data Corp (9613 JP)</a> did a deal earlier this year to sell NTT's global data business to NTT Data. Discussed <a href="https://www.smartkarma.com/insights/ntt-and-ntt-data-reshuffle-the-deckchairs-and-everyone-wins" target="_blank" rel="noopener">here</a>.</li>
<li>NTT sold 55% of its current overseas business in NTT Communications, Dimension Data, and NTT Security Group, in return getting 45% of NTT Data's current global business, plus ¥112bn. </li>
<li>NTT would then spend ¥100bn of the ¥112bn increasing its stake. So far it has spent ¥58.39bn buying 18% of volume every day since Oct 1.</li>
</ul>



NTT (Nippon Telegraph &amp; Telephone) (9432 JP) and NTT Data Corp (9613 JP) did a deal earlier this year to sell NTT's global data business to NTT Data. Discussed here.
NTT sold 55% of its current overseas business in NTT Communications, Dimension Data, and NTT Security Group, in return getting 45% of NTT Data's current global business, plus ¥112bn. 
NTT would then spend ¥100bn of the ¥112bn increasing its stake. So far it has spent ¥58.39bn buying 18% of volume every day since Oct 1.


NTT Buying NTT Data Shares - ¥40bn to Go

Japan

Nippon Telegraph and Telephone Corporation provides a variety of telecommunication services, including telephone, telegraph, leased circuits, data communication, terminal equipment sales, and related services. The Company provides both local and long distance telephone services within Japan.

NTT (Nippon Telegraph & Telephone) (9432 JP)

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NTT (Nippon Telegraph & Telephone) (9432 JP)

The BIG March 2023 "Wednesday Thursday Trade"

This year, there is a US$12bn buy to do on 29 March at the close. Historically, performance is pretty good both on a 2-day period, then slumps....

Travis Lundy

NTT (Buy) - Q3 22 Results Reaction: Mixed Quarter but Solid Mobile/Data Performance

Operating profit was light versus expectations on rising electricity costs but solid results for DoCoMo and NTT Data should be the focus

Kirk Boodry

Japan Fintech - Cashless Payments Competition Is Heating Up

Japan telecom and Internet companies are driving growth in cashless payments led by Rakuten in credit cards and PayPay in cashless apps. This is a...

Kirk Boodry

Last Week in Event SPACE: NTT Data, Origin Energy, Toyo Construction, Haidilao, Toshiba

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

NTT Buying NTT Data Shares - ¥40bn to Go

NTT's business swap plan with NTT Data entailed NTT buying JPY 100bn of NTT Data shares. They've bought 60bn. There's more impact to go, then there...

Travis Lundy

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