Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Sentiment for AI related rising with NVDA de-risked and outlook strong, despite the marginal beat.</li>
<li>Kioxia IPO pricing at $4.84bn supportive for memory ecosystem names.</li>
<li>Deere numbers and outlook for farming lifting AG machinery names - watch Kubota.</li>
</ul>


Sentiment for AI related rising with NVDA de-risked and outlook strong, despite the marginal beat.
Kioxia IPO pricing at $4.84bn supportive for memory ecosystem names.
Deere numbers and outlook for farming lifting AG machinery names - watch Kubota.


Japan Morning Connection: Risk-On for the AI Ecosystem

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<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. 


<a href="https://www.smartkarma.com/entities/wakita-co-ltd" target="_blank" data-smartkarma-citation="entities:11924:1" rel="noopener">Wakita &amp; Co Ltd (8125 JP)</a> has been a deep value stock for years. It has had deep value investors owning stakes before.However, the company has pretty low ROE based on truly awful capital allocation policy. A very large portion of the long-term assets in the firm are effectively managed by people with little to no experience in the space, in a sub-optimal capital structure. The company has large amounts of net cash, and securities, and more securities and crossholdings. And the entire company is effectively a leasing business with some add-ons, and it finances itself with almost zero debt. While it is dangerous to call a paradigm change on companies where there is a significant corporate cross-holding and significant family holding and control, there are times when the confluence of events make stocks like Wakita worth a deeper look.This may be such a time.

Wakita &amp; Co Ltd (8125 JP) has been a deep value stock for years. It has had deep value investors owning stakes before.However, the company has pretty low ROE based on truly awful capital allocation policy. A very large portion of the long-term assets in the firm are effectively managed by people with little to no experience in the space, in a sub-optimal capital structure. The company has large amounts of net cash, and securities, and more securities and crossholdings. And the entire company is effectively a leasing business with some add-ons, and it finances itself with almost zero debt. While it is dangerous to call a paradigm change on companies where there is a significant corporate cross-holding and significant family holding and control, there are times when the confluence of events make stocks like Wakita worth a deeper look.This may be such a time.

Japan Activism: A Look into Wakita (8125 JP) Potential Pre-Event

<ul>
<li>Tech weakness in Japan to continue, following the profit taking lead out of the US with NVDA numbers on Wednesday.</li>
<li>Defence related may get a lift after yesterdays weakness, with Middle East tensions rising, Japan warding off a Chinese spy plane and ex-Defence Minister announcing candidacy for LDP leader.</li>
<li>Typhoon Shanshan is expected in Kyushu. Resulting weakness on related names is usually short-lived and largely retail investor driven, making reverse positioning into the moves the more attractive tactic.</li>
</ul>


Tech weakness in Japan to continue, following the profit taking lead out of the US with NVDA numbers on Wednesday.
Defence related may get a lift after yesterdays weakness, with Middle East tensions rising, Japan warding off a Chinese spy plane and ex-Defence Minister announcing candidacy for LDP leader.
Typhoon Shanshan is expected in Kyushu. Resulting weakness on related names is usually short-lived and largely retail investor driven, making reverse positioning into the moves the more attractive tactic.


Japan Morning Connection: Further Sector Rotation on the Cards as Risk-Off Mood for Tech Continues

<ul>
<li>Gains for Micron on the potential for DDR5 price hikes should help lift <a href="https://www.smartkarma.com/entities/micronics-japan-co-ltd" target="_blank" rel="noopener">6871 Micronics</a> after yesterdays excessive weakness.</li>
<li>More cheer for US home builders after Smith Douglas number beat, adding to the upside story for Sumi Forestry and Selkisui House.</li>
<li>Defence related plays should remain in the spotlight with Kishida replacement candidates Ishiba and Kono both ex-defence ministers.</li>
</ul>


Gains for Micron on the potential for DDR5 price hikes should help lift 6871 Micronics after yesterdays excessive weakness.
More cheer for US home builders after Smith Douglas number beat, adding to the upside story for Sumi Forestry and Selkisui House.
Defence related plays should remain in the spotlight with Kishida replacement candidates Ishiba and Kono both ex-defence ministers.


Japan Morning Connection: Micronics, Mitsubishi Heavy, Kawasaki Heavy

Japan

Hitachi Construction Machinery Co., Ltd. develops, manufactures, sells, and repairs construction machinery. The Company's products include hydraulic excavators, crawler cranes, wheel loaders, shield machines, and bulldozers. Hitachi Construction Machinery, a subsidiary of Hitachi, Ltd., markets its products worldwide through sales offices overseas.

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Hitachi Construction Machinery (6305 JP)

Japan Morning Connection: Risk-On for the AI Ecosystem

AI sentiment rising with NVDA de-risked, Kioxia IPO positive for memory ecosystem names, Deere's positive outlook lifts AG machinery names like...

Andrew Jackson

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

Japan Activism: A Look into Wakita (8125 JP) Potential Pre-Event

Wakita (8125) is a serial underperformer, has a corporate governance and crossholder problem, an activist making noise, an inheritance stake to...

Travis Lundy

Japan Morning Connection: Further Sector Rotation on the Cards as Risk-Off Mood for Tech Continues

Tech weakness in Japan likely to persist. Defense stocks may see a boost amid rising tensions. Reverse position into Typhoon-related weakness.

Andrew Jackson

Japan Morning Connection: Micronics, Mitsubishi Heavy, Kawasaki Heavy

Micron's gains from potential DDR5 price hikes could boost Micronics; Defence-related stocks are in focus with Kishida replacement candidates both...

Andrew Jackson

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Morning Connection: Risk-On for the AI Ecosystem

​AI sentiment rising with NVDA de-risked, Kioxia IPO positive for memory ecosystem names, Deere's positive outlook lifts AG machinery names like...

Andrew Jackson

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

Japan Activism: A Look into Wakita (8125 JP) Potential Pre-Event

Wakita (8125) is a serial underperformer, has a corporate governance and crossholder problem, an activist making noise, an inheritance stake to...

Travis Lundy

Japan Morning Connection: Further Sector Rotation on the Cards as Risk-Off Mood for Tech Continues

​Tech weakness in Japan likely to persist. Defense stocks may see a boost amid rising tensions. Reverse position into Typhoon-related weakness.

Andrew Jackson

Japan Morning Connection: Micronics, Mitsubishi Heavy, Kawasaki Heavy

​Micron's gains from potential DDR5 price hikes could boost Micronics; Defence-related stocks are in focus with Kishida replacement candidates both...

Andrew Jackson

AI sentiment rising with NVDA de-risked, Kioxia IPO positive for memory ecosystem names, Deere's positive outlook lifts AG machinery names like...

Tech weakness in Japan likely to persist. Defense stocks may see a boost amid rising tensions. Reverse position into Typhoon-related weakness.

Micron's gains from potential DDR5 price hikes could boost Micronics; Defence-related stocks are in focus with Kishida replacement candidates both...