Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Diaper-Making machine maker <a href="https://www.smartkarma.com/entities/zuiko-corp" target="_blank" data-smartkarma-citation="entities:5568:1" rel="noopener">Zuiko Corp (6279 JP)</a> late last year introduced a shareholder benefit coupon program, and the stock has flown. Earnings improved from the trough too. </li>
<li>Now that the market cap is high enough, the company has applied to, and is now approved, to join TSE Prime, which means a TOPIX inclusion at end-June 2023.</li>
<li>With 30 days of 6mo ADV, and much more of longer average ADV, this looks like a win, but there are.... considerations. Shareholder structure matters. Yet again. </li>
</ul>


Diaper-Making machine maker Zuiko Corp (6279 JP) late last year introduced a shareholder benefit coupon program, and the stock has flown. Earnings improved from the trough too. 
Now that the market cap is high enough, the company has applied to, and is now approved, to join TSE Prime, which means a TOPIX inclusion at end-June 2023.
With 30 days of 6mo ADV, and much more of longer average ADV, this looks like a win, but there are.... considerations. Shareholder structure matters. Yet again. 


ZUIKO (6279 JP) Move to TSE Prime and TOPIX - Again, Shareholder Structure Matters

David Blennerhassett

<ul>
<li>Murakami to tender stake in <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a>? Maybe the "double arb": i.e. short on swap, long on cash, will tender the cash, remain short the back end.</li>
<li>
<a href="https://www.smartkarma.com/entities/austal-ltd" target="_blank" data-smartkarma-citation="entities:14420:1" rel="noopener">Austal Ltd (ASB AU)</a> rejected (for now) <a href="https://www.smartkarma.com/entities/hanwha-ocean-co-ltd" target="_blank" data-smartkarma-citation="entities:12531:1" rel="noopener">Hanwha Ocean (042660 KS)</a>'s bid based on regulatory concerns.  Hanwha reckons these should not be an issue.</li>
<li>If you can tolerate owning the mobile biz, buy <a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a> on dips. If not, avoid Rakuten Group and Rakuten Bank short-term; buy Rakuten Bank on larger dips.</li>
</ul>


Murakami to tender stake in JSR Corp (4185 JP)? Maybe the "double arb": i.e. short on swap, long on cash, will tender the cash, remain short the back end.

Austal Ltd (ASB AU) rejected (for now) Hanwha Ocean (042660 KS)'s bid based on regulatory concerns.  Hanwha reckons these should not be an issue.
If you can tolerate owning the mobile biz, buy Rakuten (4755 JP) on dips. If not, avoid Rakuten Group and Rakuten Bank short-term; buy Rakuten Bank on larger dips.


Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

<ul>
<li>Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.</li>
<li>One of our TOPIX Inclusion Pre-event names <a href="https://www.smartkarma.com/entities/visional-inc" target="_blank" data-smartkarma-citation="entities:32977:1" rel="noopener">Visional (4194 JP)</a> confirmed it has received approval to move to the Prime Market in December 2023.</li>
<li>Currently, we are expecting one TOPIX Inclusion at the end of December 2023 and two more at the end of January 2024 (including Visional). </li>
</ul>


Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
One of our TOPIX Inclusion Pre-event names Visional (4194 JP) confirmed it has received approval to move to the Prime Market in December 2023.
Currently, we are expecting one TOPIX Inclusion at the end of December 2023 and two more at the end of January 2024 (including Visional). 


TOPIX Inclusions: Who Is Ready (Dec 2023)

<ul>
<li>The Korean Financial Services Commission and the Financial Supervisory Service held a press briefing, unveiling the comprehensive prohibition of short selling from the 6th November, until June 30th next year.</li>
<li>Recco or Ascendant for <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys (HOLI US)</a>? Ascendant could easily get &gt;50% of shares out, and spill the board. Recco, with no shares held, looks to have a weaker hand. </li>
<li>
<a href="https://www.smartkarma.com/entities/sankyo-co-ltd" target="_blank" data-smartkarma-citation="entities:12385:1" rel="noopener">Sankyo (6417 JP)</a> is cheap. It will never trade at 20x expected PER because of the nature of the business; right now, on an ex-cash basis, it trades 1.6x ex-cash PER.</li>
</ul>


The Korean Financial Services Commission and the Financial Supervisory Service held a press briefing, unveiling the comprehensive prohibition of short selling from the 6th November, until June 30th next year.
Recco or Ascendant for Hollysys (HOLI US)? Ascendant could easily get &gt;50% of shares out, and spill the board. Recco, with no shares held, looks to have a weaker hand. 

Sankyo (6417 JP) is cheap. It will never trade at 20x expected PER because of the nature of the business; right now, on an ex-cash basis, it trades 1.6x ex-cash PER.


Last Week in Event SPACE: Korea's Short Selling, Hollysys, Sankyo, Descente

<ul>
<li>Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.</li>
<li>Our main pre-event candidate <a href="https://www.smartkarma.com/entities/celsys-inc" target="_blank" data-smartkarma-citation="entities:20774:1" rel="noopener">CELSYS (3663 JP)</a> has outperformed TOPIX by ~12.6% since 1 Sep (when it was highlighted) and 6 Nov 2023.</li>
<li>There are three TOPIX Inclusion events confirmed for the end of November and two other interesting pre-event names we are closely monitoring.</li>
</ul>


Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
Our main pre-event candidate CELSYS (3663 JP) has outperformed TOPIX by ~12.6% since 1 Sep (when it was highlighted) and 6 Nov 2023.
There are three TOPIX Inclusion events confirmed for the end of November and two other interesting pre-event names we are closely monitoring.


TOPIX Inclusions: Who Is Ready (Nov 2023)

Japan

Computer Institute of Japan, Ltd. develops a variety of software for operating systems, applications, network, engineering, and development support tools.  The Company also develops packaged software.  Computer Institute of Japan also analyzes clients' systems and develops, manages, and maintains systems such as network, database, and Internet.

CORE CORPORATION develops software for microcomputers with embedded systems, Internet related systems, and engineering systems.  The Company also provides information systems for Internet, financial, manufacturing, distribution companies as well as public services.

INTELLIGENT WAVE INC. develops computer software and provides consulting services for networking.  The Company also imports, exports, and sells computer equipment.  Intelligent Wave provides the online network of credit and debit cards, the network system of security trading, and the total system of consumer finance.

SOURCENEXT CORPORATION produces and sells utility software and software products for training purposes.  The Company also designs and distributes hardware and peripheral devices.

TOHO SYSTEM SCIENCE CO., LTD. is a system software development company.  The Company designs, develops, and supports system integration software and also provides data processing and system operation services.

eBASE Co., Ltd. develops and sells packaged software which manages product information on digital contents.  The Company also provides maintenance and support services to users.

NEOJAPAN Inc. develops and provides Internet application software, which includes  a web-based groupware for information sharing within a company. The Company mainly provides package software, application service and system integration.

SOLITON SYSTEMS K.K. builds and manages broadband VOD (Video on Demand) systems for residence and hotels.  The Company also sells security related software. Soliton Systems sets up and manages network systems for companies and sells embedded systems as well.

Cybernet Systems Co., Ltd. provides CAE (Computer Aided Engineering) software for computation/visualization, structural analysis, optical design, electronic design automation, acoustic analysis, and fluid dynamics analysis.  The Company also provides network related software.  Cybernet Systems provides support, training, seminars, and consulting services.

JASTEC Co., Ltd. is an independent computer software development company.  The Company mainly develops business application software for such industries as manufacturing, financial, retail, and service.  The Company also develops packaged software.

Softstar Entertainment Inc. develops and markets computer game software. The Company's games are available on home video game platforms and personal computers.

E-Tron Co., Ltd. provides software solution for multimedia mobile and wireless internet service.  The Company's product includes embedded graphic user interface, messeging flatform, and wireless digital contents.

AEWIN Technologies Co., Ltd. is mainly engaged in the manufacture and sale of network security platforms, customized control panels, single board computers, embedded computing boards and industrial computer boards.

Financial Technologies (India) Ltd. offers financial services.  The Company creates financial markets for commodities, equities, currencies and bonds in emerging markets in Asia, Africa and the Middle East.

Netcall plc designs, develops, sells, and markets communications, workforce management, and business process management software and services to the healthcare, public, and private sectors in the United Kingdom and internationally. It offers multichannel contact center solutions, including response management, IVR and speech recognition, call back and queue management, unified agent desktop, wallboard reporting, streamlined and integrated workflows and systems, and automated and personalized bi-directional process driven communication and alerts. The company also provides workforce optimization solutions, such as workforce management, quality management, agent evaluation, screen and voice recording, customer survey, and speech analytics, as well as resource management services; and customer and patient self-services through assisted channels comprising email, Web forms, two way SMS, live chat, Web chat, social chat, call back, and social media. In addition, it offers case, records, and document management; patient appointment management cycle; and interactive voice response payment solutions, as well as front desk operator services. Further, the company provides professional, deployment, and support services. Netcall plc was incorporated in 1984 and is based in Hemel Hempstead, the United Kingdom.

OMG plc, through its subsidiaries, provides hardware and software products in the United Kingdom, Europe, North America, the Asia Pacific, and internationally. The company develops, produces, and sells computer software and equipment for the engineering, entertainment, and life science markets. It also provides services for the management of infrastructure, highway surveying, and associated software development; and develops and sells software and hardware solutions for the consumer electronics market. In addition, the company offers sales, marketing, and customer support services; and software products and services for aerial platforms. OMG plc was founded in 1984 and is based in Oxford, the United Kingdom.

Avaya Holdings Corp. operates as a holding company. The Company, through its subsidiaries, Avaya, Inc. provides business collaboration and communications software solutions. The Company offers unified communications, contact centers, real-time video, and collaboration services. Avaya serves clients worldwide.

Chanjet Information Technology Company Limited is a provider of enterprise software and services designed for micro and small scale enterprises in The People's Republic of China.

Chanjet Information Technology Company Limited H (1588 HK)

Chanjet Information Technology Company Limited H

Userjoy Technology Co Ltd develops a wide range of gaming software for personal computers. The Company's games include role-playing, strategy, simulation, and puzzle titles.

X-Legend Entertainment Co Ltd provides and markets internet online games software.

CELSYS, Inc. provides application software and digital services. The Company operates creators support business, digital books support business and planning of middleware and contents services. CELSYS also offers painting and drawing app services.

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CELSYS (3663 JP)

ZUIKO (6279 JP) Move to TSE Prime and TOPIX - Again, Shareholder Structure Matters

Zuiko is moving to TSE Prime next week and to TOPIX next month. That creates 1.9-2.1mm shares or 30 days of ADV of demand. Nice, but there is a big...

Travis Lundy

Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

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

TOPIX Inclusions: Who Is Ready (Dec 2023)

There are currently 68 names that satisfy all 6 key Segment Transfer requirements based on current data. Another 67 names can satisfy 5 out of 6...

Janaghan Jeyakumar, CFA

Last Week in Event SPACE: Korea's Short Selling, Hollysys, Sankyo, Descente

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

TOPIX Inclusions: Who Is Ready (Nov 2023)

Celsys, Visional, and Core Concept Technologies are interesting pre-event names for TOPIX Inclusion Events worth tracking over the next few months.

Janaghan Jeyakumar, CFA

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