Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Suzuki is our top pick in the auto sector in Japan as a key beneficiary of strong demand for autos in India</li>
<li>Suzuki reported better-than-expected 2Q earnings – but the stock price has not reacted</li>
<li>Suzuki remains mispriced. Suzuki’s market cap is negative if we strip out the value of Maruti</li>
</ul>


Suzuki is our top pick in the auto sector in Japan as a key beneficiary of strong demand for autos in India
Suzuki reported better-than-expected 2Q earnings – but the stock price has not reacted
Suzuki remains mispriced. Suzuki’s market cap is negative if we strip out the value of Maruti


Suzuki (7269 JT) | Ex-Maruti Valuation Now NEGATIVE

<ul>
<li>Maruti Suzuki reported above Consensus 2Q driven by strong volumes and improved margins</li>
<li>Earnings bode well for Suzuki's 2Q earnings on Nov 8. Also, Maruti indicated significant easing of semi-driven supply constraints. Positive readacross for Suzuki. </li>
<li>Suzuki's ex-Maruti operations are now cheaper than ever at under 2.5x PER. We see upside to earnings vs. Consensus and keep our bullish stance on the stock.</li>
</ul>


Maruti Suzuki reported above Consensus 2Q driven by strong volumes and improved margins
Earnings bode well for Suzuki's 2Q earnings on Nov 8. Also, Maruti indicated significant easing of semi-driven supply constraints. Positive readacross for Suzuki. 
Suzuki's ex-Maruti operations are now cheaper than ever at under 2.5x PER. We see upside to earnings vs. Consensus and keep our bullish stance on the stock.


Suzuki (7269 JT) | Way Too Cheap Ahead of 2Q Earnings – India’s Maruti (MSIL IN) Shows the Way

<ul>
<li>We are bullish on the share price of Suzuki given its exposure to secular growth in India</li>
<li>The ex-Maruti business is recovering as supply chain constraints ease.</li>
<li>We see at least 25% upside to the share price and believe the non-Maruti business is significantly undervalued</li>
</ul>


We are bullish on the share price of Suzuki given its exposure to secular growth in India
The ex-Maruti business is recovering as supply chain constraints ease.
We see at least 25% upside to the share price and believe the non-Maruti business is significantly undervalued


Suzuki (7269) | Small Cars at Tiny Valuations

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The TSE announced its first large FFW rebalance under new rules and Market Segmentation. ~1,000 names see FFW drop 5% or more. 100+ rise 5+%. Reverse funding trades are significant.</li>
<li>Top BUY flow: Toyota, Olympus, Daiichi Sankyo, Tokio Marine, JP Holdings with an average of 4.0 days' ADV to buy. Softbank/9984, MitCorp, Hitachi, Suzuki, Marubeni average 4.8 days to SELL.</li>
<li>493 names start their phased weight reduction out of TOPIX because they do not meet the hurdle for minimum trading value. <em>And... Shinsei is the most impressive SELL name.</em>
</li>
</ul>


The TSE announced its first large FFW rebalance under new rules and Market Segmentation. ~1,000 names see FFW drop 5% or more. 100+ rise 5+%. Reverse funding trades are significant.
Top BUY flow: Toyota, Olympus, Daiichi Sankyo, Tokio Marine, JP Holdings with an average of 4.0 days' ADV to buy. Softbank/9984, MitCorp, Hitachi, Suzuki, Marubeni average 4.8 days to SELL.
493 names start their phased weight reduction out of TOPIX because they do not meet the hurdle for minimum trading value. And... Shinsei is the most impressive SELL name.



TOPIX October 2022 Rebal - BIG Names with BIG Flows

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

S&P BSE SENSEX Index / Technical Analysis

<ul>
<li>We continue to see global equities as being in pullback mode, with the MSCI ACWI index (ACWI-US) already testing important support in the $86-87 range, highlighted last week.</li>
<li>A bounce here would be ideal for the bullish case, but we could easily see a test of the YTD lows near $81.50 if $86 fails to hold.</li>
<li>Japan's TOPIX/Nikkei225/TOPIX Small remain bullish, as does India's SENSEX -- add exposure. Seeing some failed breakouts in Europe, notably the EURO STOXX 50 and STOXX Europe 600; a concerning development.</li>
</ul>


We continue to see global equities as being in pullback mode, with the MSCI ACWI index (ACWI-US) already testing important support in the $86-87 range, highlighted last week.
A bounce here would be ideal for the bullish case, but we could easily see a test of the YTD lows near $81.50 if $86 fails to hold.
Japan's TOPIX/Nikkei225/TOPIX Small remain bullish, as does India's SENSEX -- add exposure. Seeing some failed breakouts in Europe, notably the EURO STOXX 50 and STOXX Europe 600; a concerning development.


Pullback Continues; Japan & India Remain Attractive

Japan

Suzuki Motor Corporation manufactures automobiles, motorcycles, and their related parts. The Company has production facilities in USA, Japan, Taiwan, India, Pakistan, Indonesia, Thailand, and Hungary.

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Suzuki Motor (7269 JP)

Suzuki (7269 JT) | Ex-Maruti Valuation Now NEGATIVE

Suzuki remains mispriced. Suzuki’s market cap is negative if we strip out the value of Maruti. We expect margin improvements at Maruti to drive re...

Mark Chadwick

Suzuki (7269 JT) | Way Too Cheap Ahead of 2Q Earnings – India’s Maruti (MSIL IN) Shows the Way

Suzuki's is simply trading far too cheaply for a stock exposed to India - of the the best structural growth market for Auto, and extremely strong...

Mark Chadwick

Suzuki (7269) | Small Cars at Tiny Valuations

We are bullish on Suzuki as (1) India, is growing with auto buyers actively trading up to SUVs, and (2) Japan sales are recovering as parts supply...

Mark Chadwick

TOPIX October 2022 Rebal - BIG Names with BIG Flows

The annual TOPIX FFW rebalance is larger this year than normal, with the twist that 493 names will now start to be phased out completely.

Travis Lundy

Pullback Continues; Japan & India Remain Attractive

Stick with Japan & India. $ACWI bounce at $86 would be ideal for the bullish case (i.e., establishing a higher low), but we could easily see a test...

Vermilion Research

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