Research Coverage of Japanese Listed Companies, Shared Research Inc

Shared Research

Research Coverage of Japanese Listed Companies

Shared Research Inc

Pioneering research coverage of Japanese listed companies. Now customizable and interactive for global institutional investors. Corporate access reimagined.

Equity Bottom-Up

<ul><li>Sales fell JPY48.2bn YoY due to TMD Group transfer; Wireless and Communications sales rose from Hitachi Kokusai Electric consolidation.</li><li>FY12/24 forecast projects JPY485.0bn sales, JPY15.0bn operating profit, and JPY10.0bn net income, with a JPY36.0 dividend.</li><li>Micro Devices sales declined as EV market growth slowed, with weak demand from China affecting industrial machinery products.</li></ul>

Sales fell JPY48.2bn YoY due to TMD Group transfer; Wireless and Communications sales rose from Hitachi Kokusai Electric consolidation.FY12/24 forecast projects JPY485.0bn sales, JPY15.0bn operating profit, and JPY10.0bn net income, with a JPY36.0 dividend.Micro Devices sales declined as EV market growth slowed, with weak demand from China affecting industrial machinery products.

Nisshinbo Holdings (3105 JP): Q3 FY12/24 flash update

<ul><li>Sales fell JPY29.3bn (-10.9%) YoY; consolidation of Hitachi Kokusai Electric increased Wireless and Communications sales, TMD Group transfer decreased sales.</li><li>Operating profit declined JPY5.3bn (-44.0%) YoY; increased in Wireless and Communications, declined in Micro Devices and Real Estate.</li><li>Q1 FY12/24: sales JPY130.8bn (-9.2% YoY), operating profit JPY8.1bn (-36.1% YoY); Q2: sales JPY109.3bn (-12.8% YoY), operating loss JPY1.4bn.</li></ul>

Sales fell JPY29.3bn (-10.9%) YoY; consolidation of Hitachi Kokusai Electric increased Wireless and Communications sales, TMD Group transfer decreased sales.Operating profit declined JPY5.3bn (-44.0%) YoY; increased in Wireless and Communications, declined in Micro Devices and Real Estate.Q1 FY12/24: sales JPY130.8bn (-9.2% YoY), operating profit JPY8.1bn (-36.1% YoY); Q2: sales JPY109.3bn (-12.8% YoY), operating loss JPY1.4bn.

Nisshinbo Holdings (3105 JP): 1H FY12/24 flash update

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>
<a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari Inc (4385 JP)</a> will be added to the <a href="https://www.smartkarma.com/entities/tokyo-stock-exchange-tokyo-price-index-topix" target="_blank" data-smartkarma-citation="entities:22910:1" rel="noopener">Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX)</a> at the close on 28 July.</li>
<li>There are a lot of FFW changes, mainly reductions. This leads to large funding inflows on the large index stocks.</li>
<li>We estimate the inclusion of Mercari and the FFW changes will lead to a one-way turnover of 0.56% leading to a one-way trade of JPY 442.23bn (US$3.25bn).</li>
</ul>



Mercari Inc (4385 JP) will be added to the Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) at the close on 28 July.
There are a lot of FFW changes, mainly reductions. This leads to large funding inflows on the large index stocks.
We estimate the inclusion of Mercari and the FFW changes will lead to a one-way turnover of 0.56% leading to a one-way trade of JPY 442.23bn (US$3.25bn).


TOPIX July Rebalance: Mercari Inclusion, FFW Changes, US$6.5bn To Trade

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.</li>
<li>From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.</li>
<li>Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.</li>
</ul>


On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.
From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.
Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.


TOPIX FFW Transition - Big Flows from April to June

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

The September 2021 Nikkei 225 Rebalance was the first under the new rules. It was discussed in <a href="https://www.smartkarma.com/insights/2021-nikkei-225-rebalance-nintendo-murata-keyence-in-nisshinbo-toyo-seikan-skupper-out" target="_blank" data-smartkarma-citation="insights:57008" rel="noopener">2021 Nikkei 225 Rebalance: Nintendo, Murata, Keyence IN; Nisshinbo, Toyo Seikan, 'Skupper' OUT</a> about three weeks ago when announced. The ADDITIONS and DELETIONS were announced on 6 September for implementation on 30 September at the close. There was, ex-ante, quite a bit to buy, and not a huge amount to sell from the explicit deletions, though there is a little to sell on a down-weight to the Price Adjustment Factor on <a href="https://www.smartkarma.com/entities/sompo-holdings-inc" target="_blank" data-smartkarma-citation="entities:632:1" rel="noopener">Sompo Holdings (8630 JP)</a> and there was - on an ex-ante basis - something like US$4.8bn of the other 221 names to sell. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/054/original/N225+Sep+2021+Adds+Deletes.png?1632731028" class="editor-image img-responsive" data-smartkarma-image-id="232054"></figure></section>That was then. Since then, we have had 13 trading days to build up new pre-positioning or unwind previous pre-positioning. And we are have a run-up to the trade on Thursday at the close. An accompanying insight will briefly discuss the OTHER delta trade which interferes with the smooth flow of this event. More below.

The September 2021 Nikkei 225 Rebalance was the first under the new rules. It was discussed in 2021 Nikkei 225 Rebalance: Nintendo, Murata, Keyence IN; Nisshinbo, Toyo Seikan, 'Skupper' OUT about three weeks ago when announced. The ADDITIONS and DELETIONS were announced on 6 September for implementation on 30 September at the close. There was, ex-ante, quite a bit to buy, and not a huge amount to sell from the explicit deletions, though there is a little to sell on a down-weight to the Price Adjustment Factor on Sompo Holdings (8630 JP) and there was - on an ex-ante basis - something like US$4.8bn of the other 221 names to sell. That was then. Since then, we have had 13 trading days to build up new pre-positioning or unwind previous pre-positioning. And we are have a run-up to the trade on Thursday at the close. An accompanying insight will briefly discuss the OTHER delta trade which interferes with the smooth flow of this event. More below.

September 2021 Nikkei 225 Rebal With 3 Days Left

Japan

Nisshinbo Holdings Inc. manufactures cotton fabrics, synthetic textiles, and chemical products used in apparel and industrial materials.  The Company also makes a variety of paper products, electronics products for wireless communication devices and semiconductors, and specialized machines for industrial manufacturing. In addition, Nisshinbo makes brakes for automobiles.

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Nisshinbo Holdings (3105 JP)