Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent Inc (4751 JP)</a> reported 3QFY09/2023 results today. Revenue decreased 0.2% YoY to ¥171.7n (vs consensus ¥177.8bn) while operating income decreased 86.2% YoY to ¥1.4bn (vs consensus ¥11.0bn).</li>
<li>The game business has further deteriorated during 3Q with the absence of hit title launches and drop in UMA MUSUME Rankings. Segment reported losses during the quarter.</li>
<li>CA has opened pre-registrations for two new games, we are not convinced that these could become top performers as the company has not given a hit title since UMA MUSUME.</li>
</ul>



CyberAgent Inc (4751 JP) reported 3QFY09/2023 results today. Revenue decreased 0.2% YoY to ¥171.7n (vs consensus ¥177.8bn) while operating income decreased 86.2% YoY to ¥1.4bn (vs consensus ¥11.0bn).
The game business has further deteriorated during 3Q with the absence of hit title launches and drop in UMA MUSUME Rankings. Segment reported losses during the quarter.
CA has opened pre-registrations for two new games, we are not convinced that these could become top performers as the company has not given a hit title since UMA MUSUME.


CyberAgent 3Q: Gaming Collapses and Spurs Downward Revision

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

<ul>
<li>On 5 June, Shift Up announced that it will be postponing its IPO to July. The original book building period for the institutional investors was from 3 to 13 June.  </li>
<li>The final book building date has been postponed to 27 June. The subsequent public offering subscription for general investors was also postponed to 2 to 3 July.</li>
<li>A major investment positive of Shift Up is enormous initial success of Stellar Blade which was the best selling game in the U.S. and numerous other countries in April 2024. </li>
</ul>


On 5 June, Shift Up announced that it will be postponing its IPO to July. The original book building period for the institutional investors was from 3 to 13 June.  
The final book building date has been postponed to 27 June. The subsequent public offering subscription for general investors was also postponed to 2 to 3 July.
A major investment positive of Shift Up is enormous initial success of Stellar Blade which was the best selling game in the U.S. and numerous other countries in April 2024. 


Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>The FRTIB benchmark switch from the EAFE Index to the ACWI IMI ex-USA ex-China ex-Hong Kong Index will result in a round trip trade of around US$56bn.</li>
<li>The changes for the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500</a>, <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50</a>, <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50</a> and a bunch of other mainland China indices will be announced after market close on Friday.</li>
<li>Relatively quiet week for ETF flows with no major creations or redemptions during the week.</li>
</ul>


The FRTIB benchmark switch from the EAFE Index to the ACWI IMI ex-USA ex-China ex-Hong Kong Index will result in a round trip trade of around US$56bn.
The changes for the CSI 300, CSI 500, STAR50, SSE50 and a bunch of other mainland China indices will be announced after market close on Friday.
Relatively quiet week for ETF flows with no major creations or redemptions during the week.


Index Rebalance & ETF Flow Recap: FRTIB, Japan, CSI300, CSI500, STAR50, WuXi XDC, Asahi

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The 2023 Version of JAPAN PASSIVE: Who Owns What? where we break down the major (and minor) passive tracking indices and which category of investor owns how much of each. </li>
<li>Even if you do not "play" index changes, understanding impact is important. Advantest is up 100% in 3mos. Existing passive ownership and new passive buying were crucial to that performance.</li>
<li>Understanding the nature of the ownership and flows is crucial to understanding how to trade certain stocks in Japan. </li>
</ul>


The 2023 Version of JAPAN PASSIVE: Who Owns What? where we break down the major (and minor) passive tracking indices and which category of investor owns how much of each. 
Even if you do not "play" index changes, understanding impact is important. Advantest is up 100% in 3mos. Existing passive ownership and new passive buying were crucial to that performance.
Understanding the nature of the ownership and flows is crucial to understanding how to trade certain stocks in Japan. 


Telco/Internet specialist

Kirk Boodry

Redex Research

<ul>
<li>Internet advertising revenue growth has come in below expectations for Google, Meta and CyberAgent as ad budgets appear to be shrinking</li>
<li>There is an indirect read-across to Z Holdings which has almost always posted slower ad growth although it has some insulation from volatility with eCommerce and LINE official accounts</li>
<li>Sill, management targets for ad revenue growth of 5-10% look increasingly challenging which is an issue when Media generates c. 80% of profitability. We remain cautious</li>
</ul>


Internet advertising revenue growth has come in below expectations for Google, Meta and CyberAgent as ad budgets appear to be shrinking
There is an indirect read-across to Z Holdings which has almost always posted slower ad growth although it has some insulation from volatility with eCommerce and LINE official accounts
Sill, management targets for ad revenue growth of 5-10% look increasingly challenging which is an issue when Media generates c. 80% of profitability. We remain cautious


Z Holdings (Neutral) - Quick Thoughts on the Read Across from Google, Meta, and CyberAgent

Japan

FUJI MEDIA HOLDINGS, INC., a member of the Fuji-Sankei Group, produces and broadcasts a variety of television programs and sells commercial spots through a network system.  The Company is advancing into digital satellite broadcasting.

KADOKAWA DWANGO CORP is a holding company established through the merger of DWAN GO and KADOKAWA. The company publishes a variety of books and magazines as well as produces movies and videos.  KADOKAWA DWANGO CORP also develops and makes int ernet communication tools for cellular phones.

HAKUHODO DY HOLDINGS INCORPORATED is a holding company established through the merger of Hakuhodo Inc., Daiko Advertising Inc., and Yomiko Advertising Inc. The Company, through its subsidiaries, provides comprehensive advertising services.

TOEI ANIMATION CO., LTD. plans and produces animated cartoon movies.  The Company also grants broadcasting rights and licenses for other companies to produce and sell the animated characters' merchandise.  Toei Animation stages its own promotional shows and events to advertise movies.

Nippon Television Holdings Inc is a commercial television broadcaster which provides programs through a national network system.  The Company is expanding into digital satellite broadcasting. Nippon Television also operates publication and entertainment business such as concerts and exhibitions. The Company is affiliated with Yomiuri Shimbun.

TOKYO BROADCASTING SYSTEM HOLDINGS, INC. is a media company that broadcasts television and radio programs nationally.  The Company offers a variety of TV programs & film production, visual & music software production, and cable television programming.  Tokyo Broadcasting System provides digital satellite broadcasting services and also operates real estate business.

SKY Perfect JSAT Holdings, Inc. is a holding company, which manages financial operations for its subsidiaries. As a group, the Company provides broadcasting and data transmission services via satellites. SKY Perfect JSAT delivers digital TV programs including movies, music, sports and entertainment to its subscribers.

TOEI COMPANY, LTD. produces and distributes movies, television programs, and video software.  The Company also manages direct-run movie theaters.

DAIICHIKOSHO CO., LTD. manufactures, sells, and, leases karaoke equipment and software.  The Company also operates karaoke booth chains called Big Echo, provides karaoke software via cable line called DAM, and participates in broadcasting via satellite.

TV Asahi Holdings Corporation produces and broadcasts a variety of television programs mainly in the Tokyo area. The Company sells commercial spots through a network system. TV Asahi also provides patent maintenance for music publication, entertainment planning, sales of broadcasting equipment, and TV shopping.

DISH Network Corp. provides a direct broadcast satellite subscription television, audio programming and interactive television services to commercial and residential subscribers in the United States.

Beijing Enlight Media Company Limited invest, produces and distributes television programs, films and teleplays. The Company's major products include TV shows, TV entertainment programs, films and drama series.

Cinemark Holdings, Inc. operates movie theaters.  The Company operates in the United States and Latin America.

Jiangsu Phoenix Publishing & Media Corporation Limited publishes, distributes books, publications and audio-visual products, and sells cultural goods. The Company's main products include textbooks, teaching aids, and general books.

Chinese Universe Publishing and MediaCo., Ltd. manufactures enamel-covered wires and other copper wires.  Through its subsidiaries, the Company also manufactures buses and related parts.

Chinese Universe Publishing&Media (600373 CH)

TEGNA Inc. is an international broadcasting and digital media company. The Company owns and operates television and radio stations, delivering news and informative content. TEGNA also provides digital marketing solutions in the automotive, human capital and digital marketing industries for individuals and businesses.

Sun TV Network Ltd. offers television channels. The Company operates Tamil and Malayalam language channels in southern India.

China South Publishing & Media Group Company Ltd. is a media company.  The Company prints, publishes and distributes books, newspapers and journals; develops audio-visual materials; and offers digital publishing services.

Telenet Group Holding NV provides telephone and internet services through a network of fiber-optic and coaxial cable.  The company offers customized packages to businesses and individual clients in Belgium.

Eutelsat Communications is a KU-band satellite operator.  The Company offers television and radio broadcasting, video broadcasting, corporate networks, Internet access, and mobile communications.  Eutelsat serves Europe, the Middle East, Africa, Asia, eastern North America, and South America.

CyberAgent, Inc. operates blog media website, Ameba.  The Company also operates internet advertising agency, foreign exchange trading website, and creates PC and mobile contents such as advertisements and games. CyberAgent invests in companies with internet related business.

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CyberAgent Inc (4751 JP)

CyberAgent 3Q: Gaming Collapses and Spurs Downward Revision

Game biz collapsed due to lack of new releases and drop in UMA MUSUME rankings, and reported losses which led to downward revision of guidance. 2...

Shifara Samsudeen, ACMA, CGMA

Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April

Shift Up announced that it will be postponing its IPO to July. A major investment positive is the enormous initial success of Stellar Blade which...

Douglas Kim

Index Rebalance & ETF Flow Recap: FRTIB, Japan, CSI300, CSI500, STAR50, WuXi XDC, Asahi

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

JAPAN PASSIVE: Who Owns What 2023?

This is the annual JAPAN PASSIVE: Who Owns What report for 2023. It is a comprehensive of the major index exposures in Japan by index tracker type,...

Travis Lundy

Z Holdings (Neutral) - Quick Thoughts on the Read Across from Google, Meta, and CyberAgent

Industry ad revenue growth has disappointed which could put Z Holding's target of 5-10% growth at risk. Unique exposure to eCommerce monetization...

Kirk Boodry

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