Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

S&P BSE SENSEX Index / Technical Analysis

<ul>
<li>Our 2023 outlook remains unchanged as we continue to expect broad-based consolidation with $93 capping upside on MSCI ACWI (ACWI-US), while important downside targets are $86, $84, and $75-77.</li>
<li>We still recommend tactical overweight to defensives including gold miners and MSCI ACWI Staples, Health Care, and Utilities, given ACWI-US remains near the top of our expected 2023 trading range.</li>
<li>We are now starting to see broad-based improvement, particularly in Japan and India, but also in Taiwan and South Korea. Most of today's buy recommendations are cyclicals in these countries.</li>
</ul>


Our 2023 outlook remains unchanged as we continue to expect broad-based consolidation with $93 capping upside on MSCI ACWI (ACWI-US), while important downside targets are $86, $84, and $75-77.
We still recommend tactical overweight to defensives including gold miners and MSCI ACWI Staples, Health Care, and Utilities, given ACWI-US remains near the top of our expected 2023 trading range.
We are now starting to see broad-based improvement, particularly in Japan and India, but also in Taiwan and South Korea. Most of today's buy recommendations are cyclicals in these countries.


Broad-Based Improvement in India, Add Exposure/Overweight. Buys: Cyclicals in Japan, India, & Taiwan

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>In <a href="https://www.smartkarma.com/insights/jpx-nikkei-400-2022-rebal-final-predictions" target="_blank" data-smartkarma-citation="insights:72159" rel="noopener">JPX-Nikkei 400 2022 Rebal: Final Predictions</a>, I discussed Quiddity's final predictions for Potential ADDs/DELs for the JPX-Nikkei Index August 2022 Annual Review.</li>
<li>In that insight, I classified the potential ADDs/DELs by conviction levels and discussed why the high conviction ADDs and DELs deserved a higher weight than the other baskets.</li>
<li>Since then, the LONG High Conviction ADDs - SHORT High conviction DELs Trade has outperformed the other LONG-SHORT combinations.</li>
</ul>


In JPX-Nikkei 400 2022 Rebal: Final Predictions, I discussed Quiddity's final predictions for Potential ADDs/DELs for the JPX-Nikkei Index August 2022 Annual Review.
In that insight, I classified the potential ADDs/DELs by conviction levels and discussed why the high conviction ADDs and DELs deserved a higher weight than the other baskets.
Since then, the LONG High Conviction ADDs - SHORT High conviction DELs Trade has outperformed the other LONG-SHORT combinations.


JPX-Nikkei 400 2022 Rebal: Final Pre-Event Phase Strategy Worked. What Next?

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>Q2 financial results were in-line or better than management targets but lagged consensus expectations</li>
<li>Guidance for Q3 is slightly disappointing with the target range for revenue mostly below expectations whilst promotional and marketing spend continues to expand</li>
<li>The secular growth story is attractive and operating KPI growth remains robust but investors probably needed more from a stock that trades at 7.5x EV/FY22 rev in a risk-off environment</li>
</ul>


Q2 financial results were in-line or better than management targets but lagged consensus expectations
Guidance for Q3 is slightly disappointing with the target range for revenue mostly below expectations whilst promotional and marketing spend continues to expand
The secular growth story is attractive and operating KPI growth remains robust but investors probably needed more from a stock that trades at 7.5x EV/FY22 rev in a risk-off environment


Money Forward - Q2 22 Results Reaction: Mixed Results Short of Consensus

Japan Specialist

Mark Chadwick

<ul>
<li>San San should benefit from an end to Covid restrictions as employees start to network again, with revenue driven to some extent by the volume of business cards that are digitised</li>
<li>San San remains in the early stages of its growth cycle as corporate Japan embraces digital transformation</li>
<li>Q1 Sales growth +25% YoY, accelerated from 19% YoY the previous quarter</li>
<li>Bill One, a new invoicing platform, is starting to contribute</li>
<li>The stock has run up 52% YTD, one of the top performers among large cap SaaS companies in Japan </li>
<li>Trading at 18x TTM Revenue the stock is cheaper than peers</li>
</ul>


San San should benefit from an end to Covid restrictions as employees start to network again, with revenue driven to some extent by the volume of business cards that are digitised
San San remains in the early stages of its growth cycle as corporate Japan embraces digital transformation
Q1 Sales growth +25% YoY, accelerated from 19% YoY the previous quarter
Bill One, a new invoicing platform, is starting to contribute
The stock has run up 52% YTD, one of the top performers among large cap SaaS companies in Japan 
Trading at 18x TTM Revenue the stock is cheaper than peers


San San (4443) - Networking, Not Net Working

<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/entities/rakus-co-ltd" target="_blank" data-smartkarma-citation="entities:29200:1" rel="noopener">Rakus Co Ltd (3923 JP)</a>  reported 33% sales growth for 1Q FY3/22 on strong sales of corporate expense settlement software.  </li>
<li>The company added 339 new accounts in the quarter and now services 8,200 clients. </li>
<li>Cloud adoption remains low in Japan and Rakus is well positioned to benefit from the digital transition for expense management and digital documentation of bills, receipts and statements.  </li>
<li>After showing high profitability last FY (4Q EBIT margin of 25.6%), the company has returned to heavy investment to meet aggressive mid-term revenue targets.</li>
</ul>



Rakus Co Ltd (3923 JP)  reported 33% sales growth for 1Q FY3/22 on strong sales of corporate expense settlement software.  
The company added 339 new accounts in the quarter and now services 8,200 clients. 
Cloud adoption remains low in Japan and Rakus is well positioned to benefit from the digital transition for expense management and digital documentation of bills, receipts and statements.  
After showing high profitability last FY (4Q EBIT margin of 25.6%), the company has returned to heavy investment to meet aggressive mid-term revenue targets.


Rakus (3923) | Spending Money to Make Money

Japan

Rakus Co.,Ltd. provides cloud service and IT engineer temp service. The Company also provides rental server services.

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Rakus Co Ltd (3923 JP)

Broad-Based Improvement in India, Add Exposure/Overweight. Buys: Cyclicals in Japan, India, & Taiwan

Seeing broad-based improvement in India #SENSEX -- overweight/add exposure. We still recommend a tactical overweight to ACWI defensives with $ACWI...

Vermilion Research

JPX-Nikkei 400 2022 Rebal: Final Pre-Event Phase Strategy Worked. What Next?

The official index changes could be announced on 5th August 2022. Expect some positive and negative surprises. Inclusion/Exclusion events could...

Janaghan Jeyakumar, CFA

Money Forward - Q2 22 Results Reaction: Mixed Results Short of Consensus

Money Forward Q2 results met or beat its own targets but fell short of a more optimistic consensus. Guidance for Q3 sales also disappoints whilst...

Kirk Boodry

San San (4443) - Networking, Not Net Working

San San offers investors exposure to multiple growth megatrends, including Digital Transformation, SaaS market penetration, and work-style reform...

Mark Chadwick

Rakus (3923) | Spending Money to Make Money

Rakus Co Ltd (3923 JP) reported 33% sales growth for 1Q FY3/22 on strong sales of corporate expense settlement software.

Mark Chadwick

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