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>Recent developments have continued to reinforce our bullish outlook on global equities (MSCI ACWI).</li>
<li>There is no reason to fight this bullish trend, and we continue to expect more upside into the early part of 2024.</li>
<li>Upgrading Mexico to Overweight; Technology Remains Global Leadership; Actionable Themes: 44 individual stock buy recommendations within Technology, Services, Consumer Discretionary, Financials, and Materials</li>
</ul>


Recent developments have continued to reinforce our bullish outlook on global equities (MSCI ACWI).
There is no reason to fight this bullish trend, and we continue to expect more upside into the early part of 2024.
Upgrading Mexico to Overweight; Technology Remains Global Leadership; Actionable Themes: 44 individual stock buy recommendations within Technology, Services, Consumer Discretionary, Financials, and Materials


Upgrading Mexico to Overweight; Technology Remains Global Leadership; Overall Bullish Outlook Intact

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>There are 38 adds/36 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.</li>
<li>Based on the adds, deletes and capping changes, we estimate one way turnover of 4.35% and a two-way trade of JPY 461bn (US$3.24bn).</li>
<li>There are a few stocks that will have same way flow from other index trackers within a few weeks of the JPX Nikkei 400 Index rebalance.</li>
</ul>


There are 38 adds/36 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.
Based on the adds, deletes and capping changes, we estimate one way turnover of 4.35% and a two-way trade of JPY 461bn (US$3.24bn).
There are a few stocks that will have same way flow from other index trackers within a few weeks of the JPX Nikkei 400 Index rebalance.


JPX Nikkei 400 Index Rebalance: Some Big Impact Names

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

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.

Equity Bottom-Up

<ul>
<li>Shift reported 3QFY08/2023 results on Friday and the company’s revenues increased 34.2% YoY and OP more than doubled during the quarter. Both revenue and OP beat consensus estimates.</li>
<li>Conclusion of unprofitable projects and expansion into upstream services have helped earnings to expand, and we expect full-year earnings to comfortably beat guidance and consensus estimates.</li>
<li>Shift’s share price moved up by 19% following earnings announcement and has been up more than 39% YTD, and we would recommend holding on as there is further upside.</li>
</ul>


Shift reported 3QFY08/2023 results on Friday and the company’s revenues increased 34.2% YoY and OP more than doubled during the quarter. Both revenue and OP beat consensus estimates.
Conclusion of unprofitable projects and expansion into upstream services have helped earnings to expand, and we expect full-year earnings to comfortably beat guidance and consensus estimates.
Shift’s share price moved up by 19% following earnings announcement and has been up more than 39% YTD, and we would recommend holding on as there is further upside.


High Conviction Shift: Upbeat Quarter, Share Price Up More Than 39% YTD and There’s Further Upside

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> reported 2QFY08/23 results on Monday. Revenue increased 34.7% YoY to ¥21.0bn (vs consensus ¥21.3bn vs guidance ¥21.1bn) while OP grew 74.8% YoY to ¥3.3bn (vs consensus ¥2.4bn).</li>
<li>Both GPM and OPM improved significantly reaching record highs as unprofitable projects came to an end with cost optimisation initiatives removing previous concerns over declined margins in 1QFY08/23.</li>
<li>Shift’s share price closed at ¥25,870 closing 15.8% higher than the previous close at the end of yesterday’s trading following its strong set of earnings.</li>
</ul>



Shift Inc (3697 JP) reported 2QFY08/23 results on Monday. Revenue increased 34.7% YoY to ¥21.0bn (vs consensus ¥21.3bn vs guidance ¥21.1bn) while OP grew 74.8% YoY to ¥3.3bn (vs consensus ¥2.4bn).
Both GPM and OPM improved significantly reaching record highs as unprofitable projects came to an end with cost optimisation initiatives removing previous concerns over declined margins in 1QFY08/23.
Shift’s share price closed at ¥25,870 closing 15.8% higher than the previous close at the end of yesterday’s trading following its strong set of earnings.


High Conviction Shift: Margins at Record High with Strict Management and Operational Improvement

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> reported 1QFY08/2023 results today. Revenue increased 35.6% YoY to JPY19.3bn (vs consensus JPY19.8bn) while OP decreased 7.4% YoY to JPY1.8bn (vs consensus JPY2.2bn).</li>
<li>Both GPM and OPM have dropped compared to 1QFY08/2022 but shows significant improvement over last two quarters suggesting unprofitable development projects are coming to an end.</li>
<li>Though 1Q earnings fell a touch below consensus, we would not be too concerned as the company’s new services and being the market leader should drive long-term growth.</li>
</ul>



Shift Inc (3697 JP) reported 1QFY08/2023 results today. Revenue increased 35.6% YoY to JPY19.3bn (vs consensus JPY19.8bn) while OP decreased 7.4% YoY to JPY1.8bn (vs consensus JPY2.2bn).
Both GPM and OPM have dropped compared to 1QFY08/2022 but shows significant improvement over last two quarters suggesting unprofitable development projects are coming to an end.
Though 1Q earnings fell a touch below consensus, we would not be too concerned as the company’s new services and being the market leader should drive long-term growth.


2023 High Conviction Shift: Margins Begin to Recover as Unprofitable Projects Coming to an End

Japan

DTS CORPORATION provides system, operation, and network engineering services for financial and communication-related companies.  The Company also provides product services and support services including system development, maintenance, and management.

TKC Corporation is an consulting firm that provides accounting and tax information with local and overseas clients.  The Company provides database services for judicial precedents in tax and civil law.  TKC develops and sells personal computer and office automation equipment, and also provides nationwide management data-process consulting services.

Net One Systems Co., Ltd. designs, installs, maintains and supports computer network systems.  The company also installs computer security related products and integrated audio visual data communication environment system by applying IP (Internet Protocol) technology.  Net One Systems builds virtualized data center environment as well.

Future Architect, Inc. provides information system and consulting services.  The Company offers a variety of services including system design and development of application software.

Digital Garage, Inc. is a web solution provider and a business incubator.  The Company provides Internet communications and strategy planning, electronic commerce solution tools, web creation and enhancement, and Internet advertising consulting services.

Transcosmos Inc is an independent data processing company that provides software development services. The Company develops and manages electronic commerce systems, and also provides marketing support services.

ZUKEN INC. plans, develops, and sells computer-aided design (CAD), computeraided manufacturing (CAM), and computer-aided engineering (CAE) system services. The Company operates an overseas production subsidiary in England and sales subsidiaries in the US, England, the Netherlands, Germany, Austria, Switzerland, France, Italy, Korea, and Singapore.

ARGO GRAPHICS Inc. develops CAD (Computer Aided Design) software.  The Company also provides consulting and maintenance services.  Argo Graphics also provides CATIA (Computer Graphics Aided Three Dimensional Interactive Application) related software and training program.  The Company provides its services for automobile, electric component, and communication industries.

Change Co., Ltd. provides IT and network security services and solutions. The company also delivers data analytics services and training related solutions.

TECHMATRIX CORPORATION provides system integration and solution services.  The Company's services include networking, security, and software quality assurance solutions.  TECHMATRIX provides consulting services and develops enterprise software for electronic commerce and financial companies.  The Company develops packaged software for hospital system and customer relationship management(CRM).

Chinasoft International Limited develops and provides solutions in China to government authorities and its IT (Information Technology) service providers. The Company also provides IT consulting and training services, IT outsourcing services and standalone software products.

CSG Systems International, Inc. provides customer care and billing solutions for cable television providers, direct broadcast satellite providers, on-line services markets, and telephony providers. The Company offers a suite of processing and related services, as well as software and professional services which automate customer care and billing functions.

PCI-Suntek Technology Co., Ltd. provides customer service solutions for telecommunication service providers, banks, and securities firms.  The Company develops voice service systems, calling center systems, telecommunication operation and maintenance systems, and other value-added service solutions.

Jasmine Telecom Systems PCL provides a wide range of telecommunications services and equipment. The Company leases submarine fiber optic cable network and provides satellite telecommunications,  Internet and satellite-based mobile communications services. Jasmine also supplies, designs, and installs telecommunication and computer networks, including other peripheral equipment.

Iress Limited provides real-time information services to businesses that specialize in the equity, equity options and future information markets in Australia and New Zealand. The Group supplies a range of pricing data, charting, news and equity and equity derivatives and also offers real-time trading tools, including a domestic order routing product and financial

MoneyGram International, Inc. provides payment services to consumers and businesses through a network of agents and its financial institution customers. The Company enables consumers to make payments and to transfer money around the world.

eClerx Services Limited provides data analytics and solutions to global enterprise clients in the financial services, retail and manufacturing industries. The Company offers data analytics, operations management, data audits, metrics management and reporting services.

Digital China Information Service Company Ltd is principally engaged in systems integration, technical services, application software development and finance special equipment related businesses.

Digital China Information Service (000555 CH)

Sabre Corporation provides technology solutions to the global travel and tourism industry. The Company offers tours and travel services, as well as, online reservations for airlines, hotels, cruises, car rental companies, and vacation packages.

Taiji Computer Corporation Limited develops, designs, manufactures, sells and repair computer, integrated circuit, software and communication equipment. The Company's services include industry-specific solution, IT consulting, value-added services, and IT infrastructure services.

SHIFT Inc. offers information technology outsourcing services. The Company provides outsourcing software testing services to corporations and individual clients. SHIFT also provides software solutions and consulting services, as well as educational classes and programs.

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Shift Inc (3697 JP)

Upgrading Mexico to Overweight; Technology Remains Global Leadership; Overall Bullish Outlook Intact

Upgrading Mexico $EWW to Overweight; Bullish Outlook Intact on $ACWI; Technology Remains Global Leadership. 44 individual buys highlighted in Tech,...

Vermilion Research

JPX Nikkei 400 Index Rebalance: Some Big Impact Names

There are 38 adds and 36 deletes for the JPXNK400 Index. The adds have outperformed the deletes and there is a fair bit to trade on a lot of...

Brian Freitas

High Conviction Shift: Margins at Record High with Strict Management and Operational Improvement

Shift will report 3QFY08/2023 earnings end of this week and the company's share price has been up more than 13% YTD, this insight will offer...

Shifara Samsudeen, ACMA, CGMA

2023 High Conviction Shift: Margins Begin to Recover as Unprofitable Projects Coming to an End

Though Shift's 1Q earnings fell a touch below consensus, we would not be too concerned as margins show significant improvement and new services...

Shifara Samsudeen, ACMA, CGMA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Upgrading Mexico to Overweight; Technology Remains Global Leadership; Overall Bullish Outlook Intact

Upgrading Mexico $EWW to Overweight; Bullish Outlook Intact on $ACWI; Technology Remains Global Leadership. 44 individual buys highlighted in Tech,...

Vermilion Research

JPX Nikkei 400 Index Rebalance: Some Big Impact Names

There are 38 adds and 36 deletes for the JPXNK400 Index. The adds have outperformed the deletes and there is a fair bit to trade on a lot of...

Brian Freitas

High Conviction Shift: Upbeat Quarter, Share Price Up More Than 39% YTD and There’s Further Upside

Shift's 3Q revenues and OP beat consensus and we expect full-year earnings to beat guidance/consensus. Share price has been up more than 39% YTD...

Shifara Samsudeen, ACMA, CGMA

High Conviction Shift: Margins at Record High with Strict Management and Operational Improvement

Shift will report 3QFY08/2023 earnings end of this week and the company's share price has been up more than 13% YTD, this insight will offer...

Shifara Samsudeen, ACMA, CGMA

2023 High Conviction Shift: Margins Begin to Recover as Unprofitable Projects Coming to an End

Though Shift's 1Q earnings fell a touch below consensus, we would not be too concerned as margins show significant improvement and new services...

Shifara Samsudeen, ACMA, CGMA