Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Activia Properties / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/9498" target="_blank" data-smartkarma-citation="entities:9498:1" rel="noopener">Activia Properties Inc (3279 JP)</a>(API) plans to raise around US$200m/JPY22bn to fund the acquisition of three assets worth JPY44bn.</p></div><div>
<p>We have previously covered four other deals in the name: </p>
<ul><li>US$220m in Dec 2018, <a href="https://www.smartkarma.com/insights/activia-properties-placement-time-for-the-annual-fund-raise-dpu-accretive-past-deals-did-well" target="_blank" rel="noopener">Activia Properties Placement - Time for the Annual Fund Raise, DPU Accretive, past Deals Did Well</a>
</li></ul>
</div><div><ul style="list-style-type: disc;">
<li>US$130m in Dec 2017, <a href="https://www.smartkarma.com/insights/activia-properties-placement-back-again-in-just-over-a-year-past-deals-have-done-well" target="_blank" rel="noopener">Activia Properties Placement - Back Again in Just over a Year, past Deals Have Done Well</a>
</li>
<li>US$270m in Nov 2016,  <a href="https://www.smartkarma.com/insights/activia-properties-back-for-the-annual-capital-raise-but-macro-might-not-be-supportive-this-time" target="_blank" rel="noopener">Activia Properties - Back for the Annual Capital Raise but Macro Might Not Be Supportive This</a>, and</li>
<li>US$161m in Dec 2015,  <a href="https://www.smartkarma.com/insights/activia-properties-accretive-acquisition-should-add-to-the-previous-deals-record" target="_blank" rel="noopener">Activia Properties - Accretive Acquisition Should Add to the Previous Deals Record</a>.</li>
</ul></div><div><p>All the prior deals have done well over the short-term. In this note, we will run the deal through our ECM framework and talk about the deal dynamics.</p></div>

Activia Properties Inc (3279 JP)(API) plans to raise around US$200m/JPY22bn to fund the acquisition of three assets worth JPY44bn.
We have previously covered four other deals in the name: 
US$220m in Dec 2018, Activia Properties Placement - Time for the Annual Fund Raise, DPU Accretive, past Deals Did Well


US$130m in Dec 2017, Activia Properties Placement - Back Again in Just over a Year, past Deals Have Done Well

US$270m in Nov 2016,  Activia Properties - Back for the Annual Capital Raise but Macro Might Not Be Supportive This, and
US$161m in Dec 2015,  Activia Properties - Accretive Acquisition Should Add to the Previous Deals Record.
All the prior deals have done well over the short-term. In this note, we will run the deal through our ECM framework and talk about the deal dynamics.

Activia Properties Placement - Accretive Deal but Comes with a Weak Backdrop

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>Last evening post market close, the results of the JPX Nikkei 400 review were announced. There are 41 inclusions and 40 deletions to bring the number of constituents back to 400 and the changes will be effective after the close of trading on 30 August.</p><p>This is the list of inclusions and exclusions.</p><table class="table table-striped">
<colgroup>
<col>
<col>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td colspan="2" style="text-align: center; width: 396.578px;"><h3>Inclusions</h3></td>
<td colspan="2" style="text-align: center; width: 349.422px;"><h3>Exclusions</h3></td>
</tr>
<tr>
<td style="width: 75.2969px;">1417.T</td>
<td style="width: 321.281px;">Mirait Holdings Corp</td>
<td style="width: 84.3281px;">1333.T</td>
<td style="width: 265.094px;">Maruha Nichiro Corp</td>
</tr>
<tr>
<td style="width: 75.2969px;">1942.T</td>
<td style="width: 321.281px;">Kandenko Co Ltd</td>
<td style="width: 84.3281px;">2222.T</td>
<td style="width: 265.094px;">Kotobuki Spirits Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">1973.T</td>
<td style="width: 321.281px;">NEC Networks &amp; System Integration Corp</td>
<td style="width: 84.3281px;">3086.T</td>
<td style="width: 265.094px;">J.Front Retailing Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">2281.T</td>
<td style="width: 321.281px;">Prima Meat Packers Ltd</td>
<td style="width: 84.3281px;">3197.T</td>
<td style="width: 265.094px;">Skylark Holdings Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">3244.T</td>
<td style="width: 321.281px;">Samty Co Ltd</td>
<td style="width: 84.3281px;">4185.T</td>
<td style="width: 265.094px;">JSR Corp</td>
</tr>
<tr>
<td style="width: 75.2969px;">3254.T</td>
<td style="width: 321.281px;">Pressance Corp</td>
<td style="width: 84.3281px;">4189.T</td>
<td style="width: 265.094px;">KH Neochem Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">3880.T</td>
<td style="width: 321.281px;">Daio Paper Corp</td>
<td style="width: 84.3281px;">4324.T</td>
<td style="width: 265.094px;">Dentsu Group Inc</td>
</tr>
<tr>
<td style="width: 75.2969px;">3923.T</td>
<td style="width: 321.281px;">Rakus Co Ltd</td>
<td style="width: 84.3281px;">4530.T</td>
<td style="width: 265.094px;">Hisamitsu Pharmaceutical Co Inc</td>
</tr>
<tr>
<td style="width: 75.2969px;">3941.T</td>
<td style="width: 321.281px;">Rengo Co Ltd</td>
<td style="width: 84.3281px;">4666.T</td>
<td style="width: 265.094px;">Park24 Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">4205.T</td>
<td style="width: 321.281px;">Zeon Corp</td>
<td style="width: 84.3281px;">4755.T</td>
<td style="width: 265.094px;">Rakuten Group Inc</td>
</tr>
<tr>
<td style="width: 75.2969px;">4552.T</td>
<td style="width: 321.281px;">JCR Pharmaceuticals Co Ltd</td>
<td style="width: 84.3281px;">5401.T</td>
<td style="width: 265.094px;">Nippon Steel Corp</td>
</tr>
<tr>
<td style="width: 75.2969px;">4553.T</td>
<td style="width: 321.281px;">Towa Pharmaceutical Co Ltd</td>
<td style="width: 84.3281px;">5411.T</td>
<td style="width: 265.094px;">JFE Holdings Inc</td>
</tr>
<tr>
<td style="width: 75.2969px;">4587.T</td>
<td style="width: 321.281px;">PeptiDream Inc</td>
<td style="width: 84.3281px;">5801.T</td>
<td style="width: 265.094px;">Furukawa Electric Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">4812.T</td>
<td style="width: 321.281px;">Information Services International-Dentsu Ltd</td>
<td style="width: 84.3281px;">6481.T</td>
<td style="width: 265.094px;">THK Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">4848.T</td>
<td style="width: 321.281px;">Fullcast Holdings Co Ltd</td>
<td style="width: 84.3281px;">6588.T</td>
<td style="width: 265.094px;">Toshiba Tec Corp</td>
</tr>
<tr>
<td style="width: 75.2969px;">4901.T</td>
<td style="width: 321.281px;">Fujifilm Holdings Corp</td>
<td style="width: 84.3281px;">6753.T</td>
<td style="width: 265.094px;">Sharp Corp</td>
</tr>
<tr>
<td style="width: 75.2969px;">5706.T</td>
<td style="width: 321.281px;">Mitsui Mining and Smelting Co Ltd</td>
<td style="width: 84.3281px;">6770.T</td>
<td style="width: 265.094px;">Alps Alpine Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">6055.T</td>
<td style="width: 321.281px;">Japan Material Co Ltd</td>
<td style="width: 84.3281px;">6877.T</td>
<td style="width: 265.094px;">Obara Group Inc</td>
</tr>
<tr>
<td style="width: 75.2969px;">6183.T</td>
<td style="width: 321.281px;">BELLSYSTEM24 Holdings Inc</td>
<td style="width: 84.3281px;">7261.T</td>
<td style="width: 265.094px;">Mazda Motor Corp</td>
</tr>
<tr>
<td style="width: 75.2969px;">6235.T</td>
<td style="width: 321.281px;">Optorun Co Ltd</td>
<td style="width: 84.3281px;">7458.T</td>
<td style="width: 265.094px;">Daiichikosho Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">6361.T</td>
<td style="width: 321.281px;">Ebara Corp</td>
<td style="width: 84.3281px;">7731.T</td>
<td style="width: 265.094px;">Nikon Corp</td>
</tr>
<tr>
<td style="width: 75.2969px;">6544.T</td>
<td style="width: 321.281px;">Japan Elevator Service Holdings Co Ltd</td>
<td style="width: 84.3281px;">7751.T</td>
<td style="width: 265.094px;">Canon Inc</td>
</tr>
<tr>
<td style="width: 75.2969px;">6727.T</td>
<td style="width: 321.281px;">Wacom Co Ltd</td>
<td style="width: 84.3281px;">8267.T</td>
<td style="width: 265.094px;">Aeon Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">7177.T</td>
<td style="width: 321.281px;">GMO Financial Holdings Inc</td>
<td style="width: 84.3281px;">9001.T</td>
<td style="width: 265.094px;">Tobu Railway Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">7516.T</td>
<td style="width: 321.281px;">Kohnan Shoji Co Ltd</td>
<td style="width: 84.3281px;">9003.T</td>
<td style="width: 265.094px;">Sotetsu Holdings Inc</td>
</tr>
<tr>
<td style="width: 75.2969px;">7947.T</td>
<td style="width: 321.281px;">FP Corp</td>
<td style="width: 84.3281px;">9005.T</td>
<td style="width: 265.094px;">Tokyu Corp</td>
</tr>
<tr>
<td style="width: 75.2969px;">8194.T</td>
<td style="width: 321.281px;">Life Corp</td>
<td style="width: 84.3281px;">9007.T</td>
<td style="width: 265.094px;">Odakyu Electric Railway Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">8425.T</td>
<td style="width: 321.281px;">Mizuho Leasing Co Ltd</td>
<td style="width: 84.3281px;">9008.T</td>
<td style="width: 265.094px;">Keio Corp</td>
</tr>
<tr>
<td style="width: 75.2969px;">8595.T</td>
<td style="width: 321.281px;">JAFCO Group Co Ltd</td>
<td style="width: 84.3281px;">9009.T</td>
<td style="width: 265.094px;">Keisei Electric Railway Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">8892.T</td>
<td style="width: 321.281px;">Es-con Japan Ltd</td>
<td style="width: 84.3281px;">9020.T</td>
<td style="width: 265.094px;">East Japan Railway Co</td>
</tr>
<tr>
<td style="width: 75.2969px;">8919.T</td>
<td style="width: 321.281px;">Katitas Co Ltd</td>
<td style="width: 84.3281px;">9021.T</td>
<td style="width: 265.094px;">West Japan Railway Co</td>
</tr>
<tr>
<td style="width: 75.2969px;">9069.T</td>
<td style="width: 321.281px;">Senko Group Holdings Co Ltd</td>
<td style="width: 84.3281px;">9024.T</td>
<td style="width: 265.094px;">Seibu Holdings Inc</td>
</tr>
<tr>
<td style="width: 75.2969px;">9090.T</td>
<td style="width: 321.281px;">Maruwa Unyu Kikan Co Ltd</td>
<td style="width: 84.3281px;">9041.T</td>
<td style="width: 265.094px;">Kintetsu Group Holdings Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">9101.T</td>
<td style="width: 321.281px;">Nippon Yusen KK</td>
<td style="width: 84.3281px;">9044.T</td>
<td style="width: 265.094px;">Nankai Electric Railway Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">9104.T</td>
<td style="width: 321.281px;">Mitsui OSK Lines Ltd</td>
<td style="width: 84.3281px;">9045.T</td>
<td style="width: 265.094px;">Keihan Holdings Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">9143.T</td>
<td style="width: 321.281px;">SG Holdings Co Ltd</td>
<td style="width: 84.3281px;">9048.T</td>
<td style="width: 265.094px;">Nagoya Railroad Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">9375.T</td>
<td style="width: 321.281px;">Kintetsu World Express Inc</td>
<td style="width: 84.3281px;">9201.T</td>
<td style="width: 265.094px;">Japan Airlines Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">9418.T</td>
<td style="width: 321.281px;">USEN NEXT HOLDINGS Co Ltd</td>
<td style="width: 84.3281px;">9202.T</td>
<td style="width: 265.094px;">ANA Holdings Inc</td>
</tr>
<tr>
<td style="width: 75.2969px;">9517.T</td>
<td style="width: 321.281px;">eREX Co Ltd</td>
<td style="width: 84.3281px;">9603.T</td>
<td style="width: 265.094px;">H.I.S. Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">9519.T</td>
<td style="width: 321.281px;">Renova Inc</td>
<td style="width: 84.3281px;">9706.T</td>
<td style="width: 265.094px;">Japan Airport Terminal Co Ltd</td>
</tr>
<tr>
<td style="width: 75.2969px;">9787.T</td>
<td style="width: 321.281px;">Aeon Delight Co Ltd</td>
<td style="width: 84.3281px;"></td>
<td style="width: 265.094px;"></td>
</tr>
</tbody>
</table><p>Estimated one-way turnover at the rebalance is 8.16% and will result in a trade of JPY 468bn.</p><p>Among the inclusions, the largest impacts will be on <a href="https://www.smartkarma.com/entities/daio-paper-corp" target="_blank" data-smartkarma-citation="entities:3211:1" rel="noopener">Daio Paper Corp (3880 JP)</a>, <a href="https://www.smartkarma.com/entities/mizuho-leasing-co-ltd" target="_blank" data-smartkarma-citation="entities:12780:1" rel="noopener">Mizuho Leasing Co (8425 JP)</a>, <a href="https://www.smartkarma.com/entities/sg-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:26070:1" rel="noopener">SG Holdings (9143 JP)</a>, <a href="https://www.smartkarma.com/entities/katitas-co-ltd" target="_blank" data-smartkarma-citation="entities:26073:1" rel="noopener">Katitas Co Ltd (8919 JP)</a>, <a href="https://www.smartkarma.com/entities/aeon-delight-co-ltd" target="_blank" data-smartkarma-citation="entities:16763:1" rel="noopener">Aeon Delight (9787 JP)</a>, <a href="https://www.smartkarma.com/entities/japan-elevator-service-holdi" target="_blank" data-smartkarma-citation="entities:25910:1" rel="noopener">Japan Elevator Service Holdi (6544 JP)</a>, <a href="https://www.smartkarma.com/entities/kandenko-co-ltd" target="_blank" data-smartkarma-citation="entities:3726:1" rel="noopener">Kandenko Co Ltd (1942 JP)</a>, <a href="https://www.smartkarma.com/entities/senko-group-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:5287:1" rel="noopener">SENKO Group Holdings Co., Ltd. (9069 JP)</a>, <a href="https://www.smartkarma.com/entities/fp-corp" target="_blank" data-smartkarma-citation="entities:7703:1" rel="noopener">Fp Corp (7947 JP)</a> and <a href="https://www.smartkarma.com/entities/prima-meat-packers-ltd" target="_blank" data-smartkarma-citation="entities:8035:1" rel="noopener">Prima Meat Packers (2281 JP)</a>.</p><p>Deletions with the largest impacts will be <a href="https://www.smartkarma.com/entities/odakyu-electric-railway-co-ltd" target="_blank" data-smartkarma-citation="entities:5405:1" rel="noopener">Odakyu Electric Railway (9007 JP)</a>, <a href="https://www.smartkarma.com/entities/nankai-electric-railway-co" target="_blank" data-smartkarma-citation="entities:633:1" rel="noopener">Nankai Electric Railway Co (9044 JP)</a>, <a href="https://www.smartkarma.com/entities/keio-corp" target="_blank" data-smartkarma-citation="entities:1223:1" rel="noopener">Keio Corp (9008 JP)</a>, <a href="https://www.smartkarma.com/entities/sotetsu-holdings-inc" target="_blank" data-smartkarma-citation="entities:20274:1" rel="noopener">Sotetsu Holdings (9003 JP)</a>, <a href="https://www.smartkarma.com/entities/tobu-railway-co-ltd" target="_blank" data-smartkarma-citation="entities:15463:1" rel="noopener">Tobu Railway (9001 JP)</a>, <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a>, <a href="https://www.smartkarma.com/entities/tokyu-corp" target="_blank" data-smartkarma-citation="entities:3357:1" rel="noopener">Tokyu Corp (9005 JP)</a>, <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>, <a href="https://www.smartkarma.com/entities/toshiba-tec-corp" target="_blank" data-smartkarma-citation="entities:17697:1" rel="noopener">Toshiba Tec (6588 JP)</a> and <a href="https://www.smartkarma.com/entities/hisamitsu-pharmaceutical-co" target="_blank" data-smartkarma-citation="entities:17008:1" rel="noopener">Hisamitsu Pharmaceutical Co (4530 JP)</a>.</p><p>There are changes proposed to the index, mainly on selection criteria for stocks and on qualitative criteria including appointment of independent outside directors and of female corporate directors.</p>

Last evening post market close, the results of the JPX Nikkei 400 review were announced. There are 41 inclusions and 40 deletions to bring the number of constituents back to 400 and the changes will be effective after the close of trading on 30 August.This is the list of inclusions and exclusions.








Inclusions
Exclusions


1417.T
Mirait Holdings Corp
1333.T
Maruha Nichiro Corp


1942.T
Kandenko Co Ltd
2222.T
Kotobuki Spirits Co Ltd


1973.T
NEC Networks &amp; System Integration Corp
3086.T
J.Front Retailing Co Ltd


2281.T
Prima Meat Packers Ltd
3197.T
Skylark Holdings Co Ltd


3244.T
Samty Co Ltd
4185.T
JSR Corp


3254.T
Pressance Corp
4189.T
KH Neochem Co Ltd


3880.T
Daio Paper Corp
4324.T
Dentsu Group Inc


3923.T
Rakus Co Ltd
4530.T
Hisamitsu Pharmaceutical Co Inc


3941.T
Rengo Co Ltd
4666.T
Park24 Co Ltd


4205.T
Zeon Corp
4755.T
Rakuten Group Inc


4552.T
JCR Pharmaceuticals Co Ltd
5401.T
Nippon Steel Corp


4553.T
Towa Pharmaceutical Co Ltd
5411.T
JFE Holdings Inc


4587.T
PeptiDream Inc
5801.T
Furukawa Electric Co Ltd


4812.T
Information Services International-Dentsu Ltd
6481.T
THK Co Ltd


4848.T
Fullcast Holdings Co Ltd
6588.T
Toshiba Tec Corp


4901.T
Fujifilm Holdings Corp
6753.T
Sharp Corp


5706.T
Mitsui Mining and Smelting Co Ltd
6770.T
Alps Alpine Co Ltd


6055.T
Japan Material Co Ltd
6877.T
Obara Group Inc


6183.T
BELLSYSTEM24 Holdings Inc
7261.T
Mazda Motor Corp


6235.T
Optorun Co Ltd
7458.T
Daiichikosho Co Ltd


6361.T
Ebara Corp
7731.T
Nikon Corp


6544.T
Japan Elevator Service Holdings Co Ltd
7751.T
Canon Inc


6727.T
Wacom Co Ltd
8267.T
Aeon Co Ltd


7177.T
GMO Financial Holdings Inc
9001.T
Tobu Railway Co Ltd


7516.T
Kohnan Shoji Co Ltd
9003.T
Sotetsu Holdings Inc


7947.T
FP Corp
9005.T
Tokyu Corp


8194.T
Life Corp
9007.T
Odakyu Electric Railway Co Ltd


8425.T
Mizuho Leasing Co Ltd
9008.T
Keio Corp


8595.T
JAFCO Group Co Ltd
9009.T
Keisei Electric Railway Co Ltd


8892.T
Es-con Japan Ltd
9020.T
East Japan Railway Co


8919.T
Katitas Co Ltd
9021.T
West Japan Railway Co


9069.T
Senko Group Holdings Co Ltd
9024.T
Seibu Holdings Inc


9090.T
Maruwa Unyu Kikan Co Ltd
9041.T
Kintetsu Group Holdings Co Ltd


9101.T
Nippon Yusen KK
9044.T
Nankai Electric Railway Co Ltd


9104.T
Mitsui OSK Lines Ltd
9045.T
Keihan Holdings Co Ltd


9143.T
SG Holdings Co Ltd
9048.T
Nagoya Railroad Co Ltd


9375.T
Kintetsu World Express Inc
9201.T
Japan Airlines Co Ltd


9418.T
USEN NEXT HOLDINGS Co Ltd
9202.T
ANA Holdings Inc


9517.T
eREX Co Ltd
9603.T
H.I.S. Co Ltd


9519.T
Renova Inc
9706.T
Japan Airport Terminal Co Ltd


9787.T
Aeon Delight Co Ltd




Estimated one-way turnover at the rebalance is 8.16% and will result in a trade of JPY 468bn.Among the inclusions, the largest impacts will be on Daio Paper Corp (3880 JP), Mizuho Leasing Co (8425 JP), SG Holdings (9143 JP), Katitas Co Ltd (8919 JP), Aeon Delight (9787 JP), Japan Elevator Service Holdi (6544 JP), Kandenko Co Ltd (1942 JP), SENKO Group Holdings Co., Ltd. (9069 JP), Fp Corp (7947 JP) and Prima Meat Packers (2281 JP).Deletions with the largest impacts will be Odakyu Electric Railway (9007 JP), Nankai Electric Railway Co (9044 JP), Keio Corp (9008 JP), Sotetsu Holdings (9003 JP), Tobu Railway (9001 JP), Aeon Co Ltd (8267 JP), Tokyu Corp (9005 JP), Keisei Electric Railway Co (9009 JP), Toshiba Tec (6588 JP) and Hisamitsu Pharmaceutical Co (4530 JP).There are changes proposed to the index, mainly on selection criteria for stocks and on qualitative criteria including appointment of independent outside directors and of female corporate directors.

JPX Nikkei 400 Index Rebalance: Big Turnover, Big Impact & A Market Consultation

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<div><p>JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents that are selected based on several factors including market capitalization, trading value, operating profits, and ROE.</p></div><div><p>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. </p></div><div><p>Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a discussion on the latest adjustments required for the basket portfolio for the 2021 Rebalance based on May-end data. </p></div>

JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents that are selected based on several factors including market capitalization, trading value, operating profits, and ROE.A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a discussion on the latest adjustments required for the basket portfolio for the 2021 Rebalance based on May-end data. 

JPX-Nikkei 400 Rebalance 2021: Pre-Event Basket Adjustments for May-End

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Thematic (Sector/Industry)

<div style="text-align: center;"><strong>• NET GAIN • </strong></div><div><div class="content-caption">
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/590/original/2021-02-19_07-20-52.png?1613686864" class="editor-image img-responsive" data-smartkarma-image-id="189590"></figure><p></p></section> Source for all charts &amp; tables: Japan Analytics</div></div><div>
<p><strong>NET GAIN</strong> - Forecast Aggregate Net Income for the universe of  Japanese listed companies ended the quarter 23.8%  higher than three months ago - an increase of  ¥5.2 trillion. As a result, the market's forward earnings multiple has declined to 28 times following a 10% increase in total market value (ex REITs). The increase in forecast operating income is a more modest 10.2% reflecting the degree of previously-projected COVID-related extraordinary losses.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/591/original/2021-02-19_07-29-59.png?1613687413" class="editor-image img-responsive" data-smartkarma-image-id="189591"></figure></section><p><strong>TRAILING TWELVE MONTHS (TTM)</strong> - Trailing revenues and operating profits are still falling by 9.9% and 26.3%, respectively; however, operating income rose by 4.1% quarter-on-quarter as margins improved by 30 basis points. Despite a reasonable effort at cost-cutting, aggregate operating margins are still  228 bps below their mid-2018 peak, and it will take at least another eight quarters for that gap to be closed.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/595/original/2021-02-19_07-38-34.png?1613687927" class="editor-image img-responsive" data-smartkarma-image-id="189595"></figure></section><p><strong>FORECASTS</strong> - The majority of companies are forecasting for the year ending next month. Despite no change in the aggregate revenue forecast, the outlook for operating income increased by ¥3.7 trillion during the quarter resulting in a 50 bps operating margin uplift. </p>
</div><section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/596/original/2021-02-19_07-40-09.png?1613688021" class="editor-image img-responsive" data-smartkarma-image-id="189596"></figure><hr></section><p><strong>POSITIVE MOMENTUM</strong> - Both our forward-looking Results Score and Results &amp; Revision Score have returned to the positive after less than one year. Whether this merits a new thirty-year high in TOPIX is, however, a moot point. We would note that the Cabinet Office Leading Indicator of Business Conditions for December turned down for the first time since April 2020.   </p></section><div></div><div>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/597/original/2021-02-19_08-02-24.png?1613689355" class="editor-image img-responsive" data-smartkarma-image-id="189597"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/694/original/2021-02-19_16-02-06.png?1613718138" class="editor-image img-responsive" data-smartkarma-image-id="189694"></figure><hr></section><p><strong>SECTOR BREAKDOWN</strong> - The leading sectors in terms of one-month change in Results &amp; Revision Score are <strong>Other Commercial Products</strong>, <strong>Autos</strong>,<strong> Other Consumer Products</strong>, <strong>Metals</strong>, and <strong>Building Materials.</strong> The RRS 'losers' are <strong>Utilities</strong>, <strong>Internet Content &amp; Services</strong>, <strong>Food, Beverages &amp; Tobacco,</strong><strong>Retail</strong>, and <strong>Healthcare</strong>.  </p>
</div><div>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/700/original/2021-02-19_16-05-32.png?1613718344" class="editor-image img-responsive" data-smartkarma-image-id="189700"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/701/original/2021-02-19_16-06-12.png?1613718383" class="editor-image img-responsive" data-smartkarma-image-id="189701"></figure></section><hr>
</div><section></section><div><div>
<p>In the <strong>DETAIL</strong> section below, we shall review the actual results and initial and revised forecasts by Sector and highlight the best and worst-performing companies by one-quarter revenue and margin changes.</p>
<hr>
<p></p>
</div></div>

• NET GAIN • 
 Source for all charts &amp; tables: Japan Analytics
NET GAIN - Forecast Aggregate Net Income for the universe of  Japanese listed companies ended the quarter 23.8%  higher than three months ago - an increase of  ¥5.2 trillion. As a result, the market's forward earnings multiple has declined to 28 times following a 10% increase in total market value (ex REITs). The increase in forecast operating income is a more modest 10.2% reflecting the degree of previously-projected COVID-related extraordinary losses.
TRAILING TWELVE MONTHS (TTM) - Trailing revenues and operating profits are still falling by 9.9% and 26.3%, respectively; however, operating income rose by 4.1% quarter-on-quarter as margins improved by 30 basis points. Despite a reasonable effort at cost-cutting, aggregate operating margins are still  228 bps below their mid-2018 peak, and it will take at least another eight quarters for that gap to be closed.
FORECASTS - The majority of companies are forecasting for the year ending next month. Despite no change in the aggregate revenue forecast, the outlook for operating income increased by ¥3.7 trillion during the quarter resulting in a 50 bps operating margin uplift. 
POSITIVE MOMENTUM - Both our forward-looking Results Score and Results &amp; Revision Score have returned to the positive after less than one year. Whether this merits a new thirty-year high in TOPIX is, however, a moot point. We would note that the Cabinet Office Leading Indicator of Business Conditions for December turned down for the first time since April 2020.   
SECTOR BREAKDOWN - The leading sectors in terms of one-month change in Results &amp; Revision Score are Other Commercial Products, Autos, Other Consumer Products, Metals, and Building Materials. The RRS 'losers' are Utilities, Internet Content &amp; Services, Food, Beverages &amp; Tobacco,Retail, and Healthcare.  



In the DETAIL section below, we shall review the actual results and initial and revised forecasts by Sector and highlight the best and worst-performing companies by one-quarter revenue and margin changes.




🇯🇵 JAPAN • IT’S A WRAP - Winter 2020 Results & Revisions Review

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

<p>Last month’s confirmation that Sogo Seibu is closing five more stores ends a terrible six months for department store chains.</p>
<p>Things started to look bad for the sector well before the lockdown as falling tourist numbers from South Korea, the impact of the consumption tax hike, and cautious consumers at home stole the gains made in the previous year.</p>
<p>A survey of 10,000 consumers earlier this year between the ages of 20 and 70 and <strong>65% replied that they rarely visited department stores, if at all.</strong> This is up from 53.4% in 2011.</p>
<p>That the sector is in trouble is well-known but the shake out will be both accelerated and intensified by the current crisis, meaning that even fewer stores will survive, leaving just 100 or so true department stores, 50% less than now.</p>
<p>The good news is that the survivors will likely thrive, particularly <a href="https://www.smartkarma.com/entities/j-front-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:8947:1" rel="noopener">J Front Retailing (3086 JP)</a> and <a href="https://www.smartkarma.com/entities/takashimaya-co-ltd" target="_blank" data-smartkarma-citation="entities:370:1" rel="noopener">Takashimaya (8233 JP)</a>. While the entire sector is currently a sell, investors looking at the long-term may see value in a few of the leading firms.</p>
<p><strong>The following is an in-depth review of the sector with the following sections:</strong></p>
<ol>
<li>Summary of key trends</li>
<li>Overview of Sales and analysis of strong and weak categories now and in the future</li>
<li>Rankings of chains and stores by category sales</li>
<li>Analysis of regional differences</li>
<li>Ranking of Top 30 firms by Sales and OPM and analysis of strong vs weak chains</li>
<li>Ranking of Top 50 stores and analysis of sales density performance</li>
<li>Review of solutions to decline and which firms will survive and thrive.</li>
</ol>
<p><em>This insight is labelled bearish because the sector will continue to decline but a small number of firms will have a sustained future and see higher growth in operating margins once the current crisis is over.</em></p>

Last month’s confirmation that Sogo Seibu is closing five more stores ends a terrible six months for department store chains.
Things started to look bad for the sector well before the lockdown as falling tourist numbers from South Korea, the impact of the consumption tax hike, and cautious consumers at home stole the gains made in the previous year.
A survey of 10,000 consumers earlier this year between the ages of 20 and 70 and 65% replied that they rarely visited department stores, if at all. This is up from 53.4% in 2011.
That the sector is in trouble is well-known but the shake out will be both accelerated and intensified by the current crisis, meaning that even fewer stores will survive, leaving just 100 or so true department stores, 50% less than now.
The good news is that the survivors will likely thrive, particularly J Front Retailing (3086 JP) and Takashimaya (8233 JP). While the entire sector is currently a sell, investors looking at the long-term may see value in a few of the leading firms.
The following is an in-depth review of the sector with the following sections:

Summary of key trends
Overview of Sales and analysis of strong and weak categories now and in the future
Rankings of chains and stores by category sales
Analysis of regional differences
Ranking of Top 30 firms by Sales and OPM and analysis of strong vs weak chains
Ranking of Top 50 stores and analysis of sales density performance
Review of solutions to decline and which firms will survive and thrive.

This insight is labelled bearish because the sector will continue to decline but a small number of firms will have a sustained future and see higher growth in operating margins once the current crisis is over.

Japan's Department Stores in 2020: The Biggest Crisis Since World War II

Japan

TOKYU CORPORATION provides passenger rail transportation, bus transportation, truckload services, and air transportation serving the Tokyo and its surrounding areas.  The Company operates department stores, real estate leasing, and hotel businesses.  Through its subsidiaries, Tokyu offers leisure-related services such as travel agents, theaters. golf, and rent car agents.

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Tokyu Corp (9005 JP)

Activia Properties Placement - Accretive Deal but Comes with a Weak Backdrop

Activia Properties Inc (3279 JP) plans to raise around US$200m/JPY22bn to fund the acquisition of three assets worth JPY44bn.

Sumeet Singh

JPX Nikkei 400 Index Rebalance: Big Turnover, Big Impact & A Market Consultation

There are 41 adds and 40 deletes for the JPX NK 400 Index. One-way turnover is high at 8.16% and will result in a trade of JPY 468bn. There will be...

Brian Freitas

JPX-Nikkei 400 Rebalance 2021: Pre-Event Basket Adjustments for May-End

We look at the JPX Nikkei 400 Pre-event Rebalance Trade on a monthly basis, checking what is the most likely portfolio as we approach the base date...

Janaghan Jeyakumar, CFA

🇯🇵 JAPAN • IT’S A WRAP - Winter 2020 Results & Revisions Review

NET GAIN - Forecast Aggregate Net Income for the universe of Japanese listed companies ended the quarter 23.8% higher than three months ago - an...

Campbell Gunn

Japan's Department Stores in 2020: The Biggest Crisis Since World War II

Japan's department store sector will continue to contract so it is right to be bearish on the sector. However, the clear out will allow some firms...

Michael Causton

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