Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS. SPX Flat after Memorial Day; AI/Tech still strong, but momentum fading; Debt Ceiling Vote on Tap - as Republication far right protests deal; Crude -4% on OPEC/USD Debt Uncertainty</li>
<li>JAPAN. NKY Futs -0.6% Discount vs Cash;  Yen weakness a concern-Officials vow to act;  Toyota gives Up on Hino - Welcomes the Germans</li>
<li>NUGGET. The New JPX150 Index-Interesting Concept. We are hopeful that it will incentivize the numerous low PBR companies to take proactive steps to join the "elite" group of value creators.</li>
</ul>


OVERSEAS. SPX Flat after Memorial Day; AI/Tech still strong, but momentum fading; Debt Ceiling Vote on Tap - as Republication far right protests deal; Crude -4% on OPEC/USD Debt Uncertainty
JAPAN. NKY Futs -0.6% Discount vs Cash;  Yen weakness a concern-Officials vow to act;  Toyota gives Up on Hino - Welcomes the Germans
NUGGET. The New JPX150 Index-Interesting Concept. We are hopeful that it will incentivize the numerous low PBR companies to take proactive steps to join the "elite" group of value creators.


Ohayo Japan |AI Rally Fades; Debt Deal In Focus;SPX Flat/NUGGET:New JPX150 Prime Index-Has Potential

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>As designed, the JPX-Nikkei400 Index is something of a disaster. It aims to be slightly 'smart' vs other cap-weighted indices like TOPIX, but tracking error vs TOPIX is de minimus.</li>
<li>This year, in week 1, the ADD vs DELETE performance is positive. If we sector-hedge the ADDs vs DELETEs, it's doing even better.</li>
<li>This is probably due to relatively low pre-positioning, and cares. Momentum suggests one could be long ADDs vs DELETEs. And there is the perennial trade to watch out for.</li>
</ul>


As designed, the JPX-Nikkei400 Index is something of a disaster. It aims to be slightly 'smart' vs other cap-weighted indices like TOPIX, but tracking error vs TOPIX is de minimus.
This year, in week 1, the ADD vs DELETE performance is positive. If we sector-hedge the ADDs vs DELETEs, it's doing even better.
This is probably due to relatively low pre-positioning, and cares. Momentum suggests one could be long ADDs vs DELETEs. And there is the perennial trade to watch out for.


2022 JPX Nikkei 400 Rebal Update - Going the Right Way

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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>Hino announced during market hours that it was being probed for falsifying exhaust data prompting a 14.8% drop in the stock price. </li>
<li>At its press conference the company revealed that up to 116k vehicles were affected and roughly 35% of domestic production would be halted. </li>
<li>Some uncertainty remains and valuations after the fall are reasonable rather than exceedingly cheap so we would be hesitant to bottom fish here.</li>
</ul>


Hino announced during market hours that it was being probed for falsifying exhaust data prompting a 14.8% drop in the stock price. 
At its press conference the company revealed that up to 116k vehicles were affected and roughly 35% of domestic production would be halted. 
Some uncertainty remains and valuations after the fall are reasonable rather than exceedingly cheap so we would be hesitant to bottom fish here.


Hino – Some Uncertainty, Probably an Overreaction, But Still Not Worth Bottom Fishing

Kyokuto Kaihatsu Kogyo Co / Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/kyokuto-kaihatsu-kogyo-co-ltd" target="_blank" data-smartkarma-citation="entities:14390:1" rel="noopener">Kyokuto Kaihatsu Kogyo Co (7226 JP)</a> is, and has been for a a couple of decades, a value-stock player's dream. This company makes garbage trucks, dump trucks, concrete mixer trucks, sprinkler trucks, and truck parts such as lifters, etc.  They also make multi-story metal parking frames which can be sited easily on empty lots for those who want to use land but not redevelop.</p>
<p>The company has been cash-rich and asset-rich for ages - sometimes more so, sometimes less so - and has had hidden assets to boot. </p>
<p>The stock tends to "range-trade" around a range of PBR, dipping when earnings dip and rising as people get excited about trucks. But despite being a stock which some might call a value-trap, it has done pretty well over the years. Sometimes it gets REALLY cheap. </p>
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<h3>The NEW News</h3>
<p>On March 30, the company announced the sale of one of its "hidden assets" with the contract signed today and the close expected in the fiscal year which starts April 1. </p>
<p>It is worth looking at this company just to see what else it might spit out. </p>

Kyokuto Kaihatsu Kogyo Co (7226 JP) is, and has been for a a couple of decades, a value-stock player's dream. This company makes garbage trucks, dump trucks, concrete mixer trucks, sprinkler trucks, and truck parts such as lifters, etc.  They also make multi-story metal parking frames which can be sited easily on empty lots for those who want to use land but not redevelop.
The company has been cash-rich and asset-rich for ages - sometimes more so, sometimes less so - and has had hidden assets to boot. 
The stock tends to "range-trade" around a range of PBR, dipping when earnings dip and rising as people get excited about trucks. But despite being a stock which some might call a value-trap, it has done pretty well over the years. Sometimes it gets REALLY cheap. 



The NEW News
On March 30, the company announced the sale of one of its "hidden assets" with the contract signed today and the close expected in the fiscal year which starts April 1. 
It is worth looking at this company just to see what else it might spit out. 

Japan Value:  Kyokuto Kaihatsu (7226) To Log BIG Special Profit - Governance Activism Target

<p>Yesterday Toyota, Hino and Isuzu announced a new partnership to accelerate development of commercial vehicles utilising CASE technologies. The move is something of a surprise given that Toyota and Isuzu previously ended their capital tie-up (formed in 2006 to develop diesel engines) in 2018 without anything of real substance coming to fruition. It is, however, an indication that the Japanese auto sector will continue to consolidate around Toyota as we have been saying for some time.</p>

Yesterday Toyota, Hino and Isuzu announced a new partnership to accelerate development of commercial vehicles utilising CASE technologies. The move is something of a surprise given that Toyota and Isuzu previously ended their capital tie-up (formed in 2006 to develop diesel engines) in 2018 without anything of real substance coming to fruition. It is, however, an indication that the Japanese auto sector will continue to consolidate around Toyota as we have been saying for some time.

Toyota – Isuzu Re-Tie-Up Drives Further Japanese Consolidation

Japan

HINO MOTORS, LTD. develops, manufactures and markets diesel buses and trucks. The Company also produces heavy duty trucks, special purpose vehicles, and diesel engines for industrial and marine applications.

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Hino Motors Ltd (7205 JP)

Ohayo Japan |AI Rally Fades; Debt Deal In Focus;SPX Flat/NUGGET:New JPX150 Prime Index-Has Potential

SPX flat head of Debt Vote; Hard right Republicans rebel. NKY Futs -0.6% Discount vs Cash; Yen weakness a concern-Officials vow to act; Toyota...

Mark Chadwick

2022 JPX Nikkei 400 Rebal Update - Going the Right Way

JPX Nikkei 400 rebalance is going the right way in the 6 trading days so far, and it wasn't done on Day1 (which was lacklustre). It may be under...

Travis Lundy

Hino – Some Uncertainty, Probably an Overreaction, But Still Not Worth Bottom Fishing

Hino announced during market hours that it was being probed for falsifying exhaust data prompting a 14.8% drop in the stock price but we would be...

Mio Kato

Japan Value: Kyokuto Kaihatsu (7226) To Log BIG Special Profit - Governance Activism Target

Kyokuto Kaihatsu announced yesterday it would log a large special profit on the sale of a piece of land it has owned for a long time. Laden with...

Travis Lundy

Toyota – Isuzu Re-Tie-Up Drives Further Japanese Consolidation

We believe the tie-up between Isuzu and Toyota is an indication that the Japanese auto sector will continue to consolidate around Toyota as we have...

Mio Kato

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