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/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661)</a>, <a href="https://www.smartkarma.com/entities/renesas-electronics-corp" target="_blank" data-smartkarma-citation="entities:15933:1" rel="noopener">Renesas Electronics (6723)</a> and <a href="https://www.smartkarma.com/entities/japan-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1184:1" rel="noopener">Japan Airlines (9201)</a> will replace <a href="https://www.smartkarma.com/entities/toyobo-co-ltd" target="_blank" data-smartkarma-citation="entities:6187:1" rel="noopener">Toyobo (3101)</a>, <a href="https://www.smartkarma.com/entities/nippon-light-metal-holdings" target="_blank" data-smartkarma-citation="entities:1485:1" rel="noopener">Nippon Light Metal (5703)</a> and <a href="https://www.smartkarma.com/entities/toho-zinc-co-ltd" target="_blank" data-smartkarma-citation="entities:2796:1" rel="noopener">Toho Zinc (5707)</a> in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a> has been added at a post-split PAF of 1. This reduces the passive buying on the stock by around a third.</li>
<li>Passive trackers need to buy between 2.2-6.7 days of ADV on the adds while selling between 5-12 days of ADV on the deletes. There's a big funding trade too.</li>
</ul>



Oriental Land (4661), Renesas Electronics (6723) and Japan Airlines (9201) will replace Toyobo (3101), Nippon Light Metal (5703) and Toho Zinc (5707) in the Nikkei 225 (NKY INDEX). 

Oriental Land (4661 JP) has been added at a post-split PAF of 1. This reduces the passive buying on the stock by around a third.
Passive trackers need to buy between 2.2-6.7 days of ADV on the adds while selling between 5-12 days of ADV on the deletes. There's a big funding trade too.


Nikkei 225 Index Rebalance: Oriental Land, Renesas, JAL IN; Toyobo, Nippon LightMetal, Toho Zinc OUT

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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.

Keisei Electric Railway Co / Event-Driven

<ul>
<li>We think there’s something fundamentally wrong with <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a>’s current valuation.</li>
<li>Its core business with an estimated fair value of ¥720bn, currently has an implied valuation of negative ¥942bn (stub value).</li>
<li>If investors can convince the management to dispose its stake in <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a>, we think there’s more than a 200% upside to Keisei Electric’s valuation.</li>
</ul>


We think there’s something fundamentally wrong with Keisei Electric Railway Co (9009 JP)’s current valuation.
Its core business with an estimated fair value of ¥720bn, currently has an implied valuation of negative ¥942bn (stub value).
If investors can convince the management to dispose its stake in Oriental Land (4661 JP), we think there’s more than a 200% upside to Keisei Electric’s valuation.


Keisei Electric: Needs Activists to Push the Market

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>As discussed in <a href="https://www.smartkarma.com/insights/nikkei-225-march-review-quiddity-leaderboard-jan-2023" target="_blank" data-smartkarma-citation="insights:86844" rel="noopener">Nikkei 225 March Review - Quiddity Leaderboard (Jan 2023)</a> (and earlier versions), <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a> is a candidate to join the Nikkei 225 in March 2023.</li>
<li>As of early January, it was the top-ranked impact name with 11.8 days of ADV to buy, and if it underperformed the Nikkei from there, there'd be more to buy. </li>
<li>With the data collection period now complete, it is top-ranked, still. And it is still ~10-12 days to buy. Understanding shareholder structure, however, is key. So I dive in.</li>
</ul>


As discussed in Nikkei 225 March Review - Quiddity Leaderboard (Jan 2023) (and earlier versions), Oriental Land (4661 JP) is a candidate to join the Nikkei 225 in March 2023.
As of early January, it was the top-ranked impact name with 11.8 days of ADV to buy, and if it underperformed the Nikkei from there, there'd be more to buy. 
With the data collection period now complete, it is top-ranked, still. And it is still ~10-12 days to buy. Understanding shareholder structure, however, is key. So I dive in.


Oriental Land (4661) As Nikkei 225 Candidate - What Is Float? What Is "The Tricky Twist"?

Equity Bottom-Up

<ul>
<li>Aided by the Japanese Government’s efforts to rebuild the COVID-ravaged leisure sector, <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a>’s 3QFY23 OP surpassed consensus by more than 35%.</li>
<li>We believe 3QFY23 could be a peak in terms of financial performance for Oriental Land, at least until the opening of the Fantasy Springs.</li>
<li>In addition, the growth story that OLC offered through the expansion of DisneySea, seems to be no longer compelling as the management has simply stopped talking about its progress.</li>
</ul>


Aided by the Japanese Government’s efforts to rebuild the COVID-ravaged leisure sector, Oriental Land (4661 JP)’s 3QFY23 OP surpassed consensus by more than 35%.
We believe 3QFY23 could be a peak in terms of financial performance for Oriental Land, at least until the opening of the Fantasy Springs.
In addition, the growth story that OLC offered through the expansion of DisneySea, seems to be no longer compelling as the management has simply stopped talking about its progress.


Oriental Land: Fantasy Springs Is No Longer on Management’s Interest

David Blennerhassett

<ul>
<li>
<strong><a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a></strong> is trading "cheap" as <strong><a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a></strong> enjoys a zero-Covid revival.</li>
<li>Preceding my comments on Keisei/Oriental Land, are the current setup/unwind tables for Asia-Pacific Holdcos. </li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



Keisei Electric Railway Co (9009 JP) is trading "cheap" as Oriental Land (4661 JP) enjoys a zero-Covid revival.
Preceding my comments on Keisei/Oriental Land, are the current setup/unwind tables for Asia-Pacific Holdcos. 
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Mickey Upstages Keisei Electric

Japan

McDonald's Holdings Company (Japan), Ltd. operates a hamburger fast food restaurant chain throughout Japan.  The Company operates its own stores and franchise stores.

ZENSHO Holdings CO., LTD. operates a fast food chain specialized in GYUDON which serves bowls of rice topped with seasoned beef based in Kanto.      The Company operates also diversifying into other types of food chains such as "Coco's" and "Big Boy" in Japan.

Skylark Co. Ltd. mainly operates a family restaurant chain across Japan.  The Company offers Japanese-style, Western-style, and Asia-style foods for a wide variety of targeted customer segments.  Skylark also sells food and provides delivery servies.

RESORTTRUST, INC. plans, develops, markets, and operates timeshare resort hotels under the "XIV" and "SUN MEMBERS" brand name.  The Company's resort facilities are located in the suburb of major Japanese cities.  Resorttrust operates golf courses.

ROUND ONE Corporation operates bowling alleys and video game arcades.  The Company operates primarily in the Osaka area.

TORIDOLL Holdings Corporation operates a variety of restaurants such as skewered grill chicken, Japanese noodle, ramen noodle, Japanese-style pancake, and pasta restaurants.  The Company operates its business at food courts in shopping centers, stations, highway rest areas, and suburbs.

create restaurants holdings inc. operates direct-run Western, Chinese, and Japanese restaurants.  The Company also operates fast food restaurants.

create restaurants holdings inc. (3387 JP)

SAIZERIYA CO., LTD. operates an Italian restaurant chain based in the Tokyo metropolitan area.  The Company's menu includes pizza, pasta, seafood, and meat entrees.

KYORITSU MAINTENANCE CO., LTD operates student dormitories and dormitories for young businessmen throughout Japan.  The Company builds condominiums and dormitories.

Food & Life Companies Limited operates sushi restaurant chains. The Company operates kaiten sushi stores and restaurants, sushi takeout, sushi bars with snacks, and more. Food & Life Companies serves customers worldwide.

Sands China Ltd. develops, owns, and operates integrated resorts, retail malls, and casinos. The Company also manages convention and exhibition halls in Macau.

Galaxy Entertainment Group Limited, through its subsidiary, operates casino, hotel and other entertainment facilities in Macau. The company also manufactures sells and distributes construction materials.

Las Vegas Sands Corp. owns and operates casino resorts and convention centers. The Company operates in the United States, Macau and Singapore. Las Vegas Sand Corp's casinos offer a wide range of gaming activities and entertainment as well as overnight accommodations, while its expo centers host a wide range of entertainment shows, expositions, and other activities.

Yum! Brands, Inc, owns and franchises quick-service restaurants worldwide.  The Company develops, operates, franchises and licenses a worldwide system of restaurants which prepare, package and sell a menu of food items.

Royal Caribbean Cruises Ltd. is a global cruise company operating a fleet of vessels in the cruise vacation industry. The Company operates through brands which primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which also includes the budget and luxury segments.

Hyatt Hotels Corp. is a global hospitality company. The Company manages, franchises, owns, and develops branded hotels, resorts and residential and vacation ownership properties around the world.

Chipotle Mexican Grill, Inc. owns and operates quick serve Mexican restaurants. The Company manages restaurants throughout the United States.

Marriott International Inc. is a worldwide operator and franchisor of hotels. The Company franchises lodging facilities and vacation timesharing resorts under various brand names. Marriott also provides services to home and condominium owner associations for projects associated with several of its brands.

Wingstop Inc. owns and operates restaurants. The Company specializes in cooked-to-order, hand-sauced, and tossed chicken wings. Wingstop serves customers worldwide.

Indian Hotels Company Limited operates The Taj Group of hotels.  The Company owns or maintains long term leases/licenses for hotels in India, in addition to International hotels.  The Group's hotels are divided into three groups: Luxury, Business, and, Leisure.

ORIENTAL LAND CO., LTD. operates Tokyo Disney Resort.  The Company also operates restaurants within the complex and sells Disney merchandise.

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Oriental Land (4661 JP)

Nikkei 225 Index Rebalance: Oriental Land, Renesas, JAL IN; Toyobo, Nippon LightMetal, Toho Zinc OUT

There are 3 adds and 3 deletes in March - mostly on expected line. The inclusion of Oriental Land at a lower than expected PAF could see some...

Brian Freitas

Keisei Electric: Needs Activists to Push the Market

Keisei Electric’s core business is in the transportation sector. It served around 170.0m commuters in the east part of Tokyo, Chiba and Ibaraki...

Oshadhi Kumarasiri

Oriental Land (4661) As Nikkei 225 Candidate - What Is Float? What Is "The Tricky Twist"?

Oriental Land is a top choice to be added to the Nikkei 225 in Mar23. Data cutoff was 31 January; PAF setting was yesterday too. Or.... was it? ...

Travis Lundy

Oriental Land: Fantasy Springs Is No Longer on Management’s Interest

We believe 3QFY23 could be a peak in terms of financial performance for Oriental Land, at least until the opening of the Fantasy Springs. In...

Oshadhi Kumarasiri

StubWorld: Mickey Upstages Keisei Electric

Keisei is trading "cheap" as Oriental Land enjoys a zero-Covid revival. This appears a set-up here. The pushback is that the momentum and positive...

David Blennerhassett

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