Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>The last of the three-leg rebalance for TOPIX and JPNK400 index weights takes place Wednesday 29 June at the close. This one is a bit larger than expected in April.</li>
<li>There were a large number of cancellations of shares by TSE Prime members in May which ups the predicted value to be traded. </li>
<li>Interestingly, because lots of names have seen share cancellations and FFW drops, the average passive ownership of TSE Float (not other providers' float) has gone up significantly through this process. </li>
</ul>


The last of the three-leg rebalance for TOPIX and JPNK400 index weights takes place Wednesday 29 June at the close. This one is a bit larger than expected in April.
There were a large number of cancellations of shares by TSE Prime members in May which ups the predicted value to be traded. 
Interestingly, because lots of names have seen share cancellations and FFW drops, the average passive ownership of TSE Float (not other providers' float) has gone up significantly through this process. 


Last Leg of TOPIX and JPNK400 FFW Rebal - ¥780bn One-Way Flow Wednesday

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

<ul>
<li>Downtrends remain intact for Japan’s TOPIX/Nikkei 225, Hong Kong’s Hang Seng, Europe’s EURO STOXX50, Germany's DAX, China (MCHI-US), and all the MSCI global indexes (ACWI, ACWI ex-US, EM, and EAFE).</li>
<li>The majority of these indexes are in well-defined downtrends; that means when the downtrends eventually reverse, it will be clear and we will be ready to buy/turn bullish.</li>
<li>Relative strength on Japan's TOPIX is reversing topside a 4.5-year downtrend, signaling Japan is emerging as leadership. We highlight buy opportunities in Japan and also in defensive Sectors</li>
</ul>


Downtrends remain intact for Japan’s TOPIX/Nikkei 225, Hong Kong’s Hang Seng, Europe’s EURO STOXX50, Germany's DAX, China (MCHI-US), and all the MSCI global indexes (ACWI, ACWI ex-US, EM, and EAFE).
The majority of these indexes are in well-defined downtrends; that means when the downtrends eventually reverse, it will be clear and we will be ready to buy/turn bullish.
Relative strength on Japan's TOPIX is reversing topside a 4.5-year downtrend, signaling Japan is emerging as leadership. We highlight buy opportunities in Japan and also in defensive Sectors


Japan Emerging as Leadership; Actionable Themes: Japan and Defensives

Global Gaming and Casinos Industry Specialist, Casino Business Review LLC

Howard J Klein

Global Gaming and Casinos Industry Specialist

Equity Bottom-Up

The key here is to grasp the fundamental, simultaneous forward movement of technological innovation in the general digital entertainment field as well as steps those companies with deep core footholds in a declining segment like Pachinko are taking to readjust their intermediate and longer term strategies for improved post-pandemic EBITDA performance. The timing is of course tricky. That is clearly because at best, it is an educated guess by medical experts as to when all public assembly businesses can come out from under the damage inflicted by the pandemic. Where companies like Sega need to be judged now is their resilience to meet contingencies ahead with strategic changes that contribute to significant earnings recovery going forward.

The key here is to grasp the fundamental, simultaneous forward movement of technological innovation in the general digital entertainment field as well as steps those companies with deep core footholds in a declining segment like Pachinko are taking to readjust their intermediate and longer term strategies for improved post-pandemic EBITDA performance. The timing is of course tricky. That is clearly because at best, it is an educated guess by medical experts as to when all public assembly businesses can come out from under the damage inflicted by the pandemic. Where companies like Sega need to be judged now is their resilience to meet contingencies ahead with strategic changes that contribute to significant earnings recovery going forward.

Sega Sammy Holdings, Inc.: Time for a Look at Management's Pivot Setting Stage for Profit Rebound

Last Friday 30 October after the close, theme park operator and character licensor <a href="https://www.smartkarma.com/entities/sanrio-co-ltd" target="_blank" data-smartkarma-citation="entities:16476:1" rel="noopener">Sanrio Co Ltd (8136 JP)</a> announced earnings for Q2. They were less than salutary with H1 revenues -38.3%, and H1 OP and Net Profit negative to the tune of about negative 15% OPMs and NPMs.
Q1 revenues were down 45.5%yoy. Q2 turned out to be down 31.5%yoy. H2 revenues are now forecast to be down 18%yoy, which strikes me as aggressive. 
The stock fell 7% on the news, and did not rally on Day 2.
Today after the close, the company announced that its lead shareholder <a href="https://www.smartkarma.com/entities/sega-sammy-holdings-inc" target="_blank" data-smartkarma-citation="entities:19932:1" rel="noopener">Sega Sammy Holdings (6460 JP)</a> wanted to sell some of its position, dropping it from 10+% to about 7.1% by selling 3,510,000 shares and to accommodate that desire and to use its cash to increase capital efficiency, the company would conduct a ToSTNeT-3 buyback before the open on 5 November to buy up to 3,391,700 shares, spending up to JPY 6 billion, at today's closing price of JPY 1,769/share. 
This doesn't change float. It slightly positively affects future-when-profitable-again EPS. But for anyone who is bearish, it represents an opportunity.

Last Friday 30 October after the close, theme park operator and character licensor Sanrio Co Ltd (8136 JP) announced earnings for Q2. They were less than salutary with H1 revenues -38.3%, and H1 OP and Net Profit negative to the tune of about negative 15% OPMs and NPMs.
Q1 revenues were down 45.5%yoy. Q2 turned out to be down 31.5%yoy. H2 revenues are now forecast to be down 18%yoy, which strikes me as aggressive. 
The stock fell 7% on the news, and did not rally on Day 2.
Today after the close, the company announced that its lead shareholder Sega Sammy Holdings (6460 JP) wanted to sell some of its position, dropping it from 10+% to about 7.1% by selling 3,510,000 shares and to accommodate that desire and to use its cash to increase capital efficiency, the company would conduct a ToSTNeT-3 buyback before the open on 5 November to buy up to 3,391,700 shares, spending up to JPY 6 billion, at today's closing price of JPY 1,769/share. 
This doesn't change float. It slightly positively affects future-when-profitable-again EPS. But for anyone who is bearish, it represents an opportunity. 

A brief thinkpiece about where <a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> sits vs its peers and history. Conclusions are that NEXON is not dramatically expensive to its peers on a Forward EV/EBIT multiple basis. You would need another 5+% into the close to be comfortable with a clean short-term trade given the change in Real World FloatOriginal insight is <a href="https://www.smartkarma.com/insights/familymart-delisting-and-its-nikkei-225-replacement-is-nexon-3659" target="_blank" data-smartkarma-citation="insights:44429" rel="noopener">Familymart Delisting and Its Nikkei 225 Replacement Is Nexon (3659)</a>.More below the fold.

A brief thinkpiece about where Nexon (3659 JP) sits vs its peers and history. Conclusions are that NEXON is not dramatically expensive to its peers on a Forward EV/EBIT multiple basis. You would need another 5+% into the close to be comfortable with a clean short-term trade given the change in Real World FloatOriginal insight is Familymart Delisting and Its Nikkei 225 Replacement Is Nexon (3659).More below the fold.  

Is It Safe to Short NEXON into the Inclusion?

Japan

SEGA SAMMY HOLDINGS INC. is a holding company established through the merger of Sega and Sammy.  The Group mainly develops and manufactures commercial-use video game machine, home-use video game software, and pachinko pinball machine. Sega Sammy Holdings also operates amusement parks.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Sega Sammy Holdings (6460 JP)

Last Leg of TOPIX and JPNK400 FFW Rebal - ¥780bn One-Way Flow Wednesday

There are 2+ days until the last stage of the TSE FFW Rebalance is done. This time sees more changes because of increased share cancellation in...

Travis Lundy

Japan Emerging as Leadership; Actionable Themes: Japan and Defensives

Despite the intact downtrend on Japan's TOPIX, relative strength is reversing topside a 4.5-year downtrend; this tells us Japan is emerging as...

Vermilion Research

Sega Sammy Holdings, Inc.: Time for a Look at Management's Pivot Setting Stage for Profit Rebound

Among the major digital and video game, and live entertainment sector, we believe Sega, having experienced significant downside due to both...

Howard J Klein

Biggish Sanrio (8136) ToSTNeT-3 Buyback

Sanrio will do a large ToSTNeT-3 buyback from its lead shareholder on 5 Nov. If you want to sell or short a large block of the company which sees...

Travis Lundy

Is It Safe to Short NEXON into the Inclusion?

Nexon has bounced on the Nikkei 225 inclusion. It may not have bounced enough to be aggressively short. The forward fundamental multiple isn't...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)