Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>The TSE Free Float Weight Rebalance to be executed at the close Monday (30 May) is about ¥729bn a side, so it will add ~¥1.5trln to volumes. </li>
<li>A sector-neutral basket of the 98 top upweights and 98 top downweights across the 33 TOPIX sectors saw the upweights UNDER-perform the downweights by about 0.3% since the April rebalance.</li>
<li>Monday again sees very large buy and sell flows at the close. This is a guide to taking advantage of those flows. Sector tables and a spreadsheet is attached.</li>
</ul>


The TSE Free Float Weight Rebalance to be executed at the close Monday (30 May) is about ¥729bn a side, so it will add ~¥1.5trln to volumes. 
A sector-neutral basket of the 98 top upweights and 98 top downweights across the 33 TOPIX sectors saw the upweights UNDER-perform the downweights by about 0.3% since the April rebalance.
Monday again sees very large buy and sell flows at the close. This is a guide to taking advantage of those flows. Sector tables and a spreadsheet is attached.


TOPIX May Rebalance - The BIG Flows at the Close MONDAY

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>Q4 and FY21 results released Thursday were largely in-line with forecasts although guidance for FY22 missed consensus as upfront costs for entering the tower business ramp up</li>
<li>For FY22, JTower will compete the transfer of 2,000 DoCoMo towers (c. one-third) and 90% of NTT East/West towers with the handover starting in Q3 </li>
<li>By FY26, JTower expects annual revenue of ¥30bn (+51% CAGR from ¥6bn in FY22) and EBITDA margins of 60% (¥18bn in EBITDA v ¥ 1.6bn)</li>
</ul>


Q4 and FY21 results released Thursday were largely in-line with forecasts although guidance for FY22 missed consensus as upfront costs for entering the tower business ramp up
For FY22, JTower will compete the transfer of 2,000 DoCoMo towers (c. one-third) and 90% of NTT East/West towers with the handover starting in Q3 
By FY26, JTower expects annual revenue of ¥30bn (+51% CAGR from ¥6bn in FY22) and EBITDA margins of 60% (¥18bn in EBITDA v ¥ 1.6bn)


JTower Q4 21 Results Reaction: Impact of Tower Deals Encouraging

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Downtrends remain intact for Japan’s TOPIX/Nikkei 225, Hong Kong’s Hang Seng, Europe’s EURO STOXX50, Germany's DAX, China (MCHI-US), and all the MSCI global indexes (ACWI, ACWI ex-US, EM, and EAFE).</li>
<li>The majority of these indexes are in well-defined downtrends; that means when the downtrends eventually reverse, it will be clear and we will be ready to buy/turn bullish.</li>
<li>Relative strength on Japan's TOPIX is reversing topside a 4.5-year downtrend, signaling Japan is emerging as leadership. We highlight buy opportunities in Japan and also in defensive Sectors</li>
</ul>


Downtrends remain intact for Japan’s TOPIX/Nikkei 225, Hong Kong’s Hang Seng, Europe’s EURO STOXX50, Germany's DAX, China (MCHI-US), and all the MSCI global indexes (ACWI, ACWI ex-US, EM, and EAFE).
The majority of these indexes are in well-defined downtrends; that means when the downtrends eventually reverse, it will be clear and we will be ready to buy/turn bullish.
Relative strength on Japan's TOPIX is reversing topside a 4.5-year downtrend, signaling Japan is emerging as leadership. We highlight buy opportunities in Japan and also in defensive Sectors


Japan Emerging as Leadership; Actionable Themes: Japan and Defensives

<ul>
<li>KDDI reported earnings today, offering a near meaningless March 2022 results presentation slide deck, and an only slightly more meaningful new Mid-Term Plan.</li>
<li>The only clarity provided is on the bit which makes up about a third of future OP as the two-thirds (mobile telephony ARPU-related revenues) will see considerable pain this year. </li>
<li>The buyback is nice, but KDDI is no longer cheap, and may have relative upside only against Softbank Corp. </li>
</ul>


KDDI reported earnings today, offering a near meaningless March 2022 results presentation slide deck, and an only slightly more meaningful new Mid-Term Plan.
The only clarity provided is on the bit which makes up about a third of future OP as the two-thirds (mobile telephony ARPU-related revenues) will see considerable pain this year. 
The buyback is nice, but KDDI is no longer cheap, and may have relative upside only against Softbank Corp. 


KDDI (9433) Results OK, Forecasts OK, Buyback Even Better, But No Longer Cheap

<ul>
<li>Guidance for modest growth in FY22 operating income is broadly in line with expectations and reassuring after a range of potential outcomes in reports from NTT and Softbank  </li>
<li>The company has issued a mid-term plan with a positive message on growth from new businesses and in-line guidance for capex/shareholder returns but a lack of FY24 finanical targets</li>
<li>On balance, the message is positive as a stable business and rising shareholder returns makes KDDI an attractive option in a frothy market</li>
</ul>


Guidance for modest growth in FY22 operating income is broadly in line with expectations and reassuring after a range of potential outcomes in reports from NTT and Softbank  
The company has issued a mid-term plan with a positive message on growth from new businesses and in-line guidance for capex/shareholder returns but a lack of FY24 finanical targets
On balance, the message is positive as a stable business and rising shareholder returns makes KDDI an attractive option in a frothy market


KDDI (Buy) Q4 21 Results Reaction: FY22 Profits Steady and Wide-Ranging Mid-Term Plan

Japan

KDDI CORPORATION provides mobile communication services and sells mobile devices.  The Company also is a broadband provider.

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KDDI Corp (9433 JP)

TOPIX May Rebalance - The BIG Flows at the Close MONDAY

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Travis Lundy

JTower Q4 21 Results Reaction: Impact of Tower Deals Encouraging

At its Q4 results last week, JTower defined the magnitude of potential growth expected from tower carve-out deals announced with NTT last year. By...

Kirk Boodry

Japan Emerging as Leadership; Actionable Themes: Japan and Defensives

Despite the intact downtrend on Japan's TOPIX, relative strength is reversing topside a 4.5-year downtrend; this tells us Japan is emerging as...

Vermilion Research

KDDI (9433) Results OK, Forecasts OK, Buyback Even Better, But No Longer Cheap

KDDI (9433) earnings, when taken with NTT's, more than anything highlight how bad Softbank Corp (9434) earnings were. KDDI gets small growth next...

Travis Lundy

KDDI (Buy) Q4 21 Results Reaction: FY22 Profits Steady and Wide-Ranging Mid-Term Plan

KDDI appears to be weathering market challenges and guidance for modest growth in profitability in FY22 is positive. The company also issued mid...

Kirk Boodry

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