Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The July-end TOPIX FFW Rebalance is larger than most expected, I believe. </li>
<li>There should be US$3.5bn one-way, with only a couple of major buy names.</li>
<li>
<a href="https://www.smartkarma.com/entities/chugai-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:4489:1" rel="noopener">Chugai Pharmaceutical (4519 JP)</a>, <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a>, <a href="https://www.smartkarma.com/entities/unicharm-corp" target="_blank" data-smartkarma-citation="entities:6246:1" rel="noopener">Unicharm Corp (8113 JP)</a>, <a href="https://www.smartkarma.com/entities/kubota-corp" target="_blank" data-smartkarma-citation="entities:12926:1" rel="noopener">Kubota Corp (6326 JP)</a>, <a href="https://www.smartkarma.com/entities/asahi-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10482:1" rel="noopener">Asahi Group Holdings (2502 JP)</a>, and Shiseido (4911) are each US$170mm+ to sell.</li>
</ul>


The July-end TOPIX FFW Rebalance is larger than most expected, I believe. 
There should be US$3.5bn one-way, with only a couple of major buy names.

Chugai Pharmaceutical (4519 JP), Canon Inc (7751 JP), Unicharm Corp (8113 JP), Kubota Corp (6326 JP), Asahi Group Holdings (2502 JP), and Shiseido (4911) are each US$170mm+ to sell.


TOPIX Rebalance: End-July Rebal Is $3.5bn One-Way - Some Big Sell Names

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<ul>
<li>Channel checks with <a href="https://www.smartkarma.com/entities/merida-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:12226:1" rel="noopener">Merida Industry (9914 TT)</a> and <a href="https://www.smartkarma.com/entities/giant-manufacturing-co-ltd" target="_blank" data-smartkarma-citation="entities:9014:1" rel="noopener">Giant Manufacturing (9921 TT)</a> on the Asia order book provide color on Shimano's results so far. </li>
<li>Channel checks with the Dutch <a href="https://www.smartkarma.com/entities/accell-group" target="_blank" data-smartkarma-citation="entities:21089:1" rel="noopener">Accell Group (ACCEL NA)</a> also do not show any encouraging data either. </li>
<li>Share buyback will provide short term relief but it won't make revenue growth rate to be as high as early 2021. </li>
</ul>


Channel checks with Merida Industry (9914 TT) and Giant Manufacturing (9921 TT) on the Asia order book provide color on Shimano's results so far. 
Channel checks with the Dutch Accell Group (ACCEL NA) also do not show any encouraging data either. 
Share buyback will provide short term relief but it won't make revenue growth rate to be as high as early 2021. 


Shimano (7309): Bumpy Part 2 - Channel Checks

Japan Specialist

Mark Chadwick

<ul>
<li>Normalization of inventories is not the end of the super cycle</li>
<li>Record high sales, operating profit and margins for a March quarter</li>
<li>The share price has already returned to attractive valuations. The short-term "sprinteurs" are out; time for the GCs to step up</li>
</ul>


Normalization of inventories is not the end of the super cycle
Record high sales, operating profit and margins for a March quarter
The share price has already returned to attractive valuations. The short-term "sprinteurs" are out; time for the GCs to step up


<ul>
<li>The drivers of bike demand are structural and have nothing to do with Covid. We expect the company to beat numbers this year.</li>
<li>EU regulation will drive huge growth in the bike market over the next several years and Shimano is uniquely positioned to benefit.</li>
<li>The stock price decline from over ¥35k to under ¥25k has brought valuations down to the bottom of the historical range. </li>
</ul>


The drivers of bike demand are structural and have nothing to do with Covid. We expect the company to beat numbers this year.
EU regulation will drive huge growth in the bike market over the next several years and Shimano is uniquely positioned to benefit.
The stock price decline from over ¥35k to under ¥25k has brought valuations down to the bottom of the historical range. 


Shimano (7309 JP) | EU Tax Cuts Keep Cycle Boom Rolling

<ul>
<li>
<a href="https://www.smartkarma.com/entities/giant-manufacturing-co-ltd" target="_blank" data-smartkarma-citation="entities:9014:1" rel="noopener">Giant Manufacturing (9921 TT)</a> , one of Shimano's top customers, is reportedly having a production issue and can only sort it out by the end of this year. </li>
<li>
<a href="https://www.smartkarma.com/entities/shimano-inc" target="_blank" data-smartkarma-citation="entities:3777:1" rel="noopener">Shimano Inc (7309 JP)</a> is no longer Japan-centric but a global company with customers all over the world. </li>
<li>Low valuation gives an illusion that it is cheap historically but expects a bumpy road ahead.</li>
</ul>



Giant Manufacturing (9921 TT) , one of Shimano's top customers, is reportedly having a production issue and can only sort it out by the end of this year. 

Shimano Inc (7309 JP) is no longer Japan-centric but a global company with customers all over the world. 
Low valuation gives an illusion that it is cheap historically but expects a bumpy road ahead.


Japan

SHIMANO INC. manufactures and sells products for bicycling, snowboarding, and fishing.  The Company's products include running gears and brake parts for bicycles and rods, reels, and tackles for fishing.  The Company manufactures golf related products as well.  Shimano mainly exports to Asia, Europe, and the United States.

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Shimano Inc (7309 JP)

TOPIX Rebalance: End-July Rebal Is $3.5bn One-Way - Some Big Sell Names

The July-end TOPIX rebalance is only have the size of June but that's still big. US$3.5bn a side. There are several large names and lots of names...

Travis Lundy

Shimano (7309): Bumpy Part 2 - Channel Checks

Europe sales do not show any sign that it will have an extremely positive catalyst either. Accell’s revenue growth rate, if anything, is not that...

Henry Soediarko

Shimano (7309) | Time for the GCs

Concerns over a normalisation post Covid are overdone. The long-term growth in cycling is driven by environmental and health reasons. Upcoming VAT...

Mark Chadwick

Shimano (7309 JP) | EU Tax Cuts Keep Cycle Boom Rolling

EU regulation will drive huge growth in the bike market over the next several years and Shimano is uniquely positioned to benefit.

Mark Chadwick

Shimano (7309): Bumpy

China lockdown also impacts Shimano negatively. When PE has dropped more than the share price it is followed by a sideways movement of the share...

Henry Soediarko

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