Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Nikkei 225 data for the March 2024 rebalance is a wrap. The names are the same as before but there is likely less <a href="https://www.smartkarma.com/entities/disco-corp" target="_blank" data-smartkarma-citation="entities:15817:1" rel="noopener">DISCO Corp (6146 JP)</a> to buy.</li>
<li>It's still big, but smaller than before because of the difference between performance and the change in PAF required to be below 1%. A 4:1 share split would be optimal.</li>
<li>I recommend a few positioning changes from before, and the Fast Retailing trade loses one short-term option but the longer-term one stays in place.</li>
</ul>


The Nikkei 225 data for the March 2024 rebalance is a wrap. The names are the same as before but there is likely less DISCO Corp (6146 JP) to buy.
It's still big, but smaller than before because of the difference between performance and the change in PAF required to be below 1%. A 4:1 share split would be optimal.
I recommend a few positioning changes from before, and the Fast Retailing trade loses one short-term option but the longer-term one stays in place.


FINAL PREDICTIONS: March 2024 Nikkei 225 Rebal (Socionext, Disco, and 1 Consumer Goods Stock to ADD)

<ul>
<li>No changes in the rankings since last time. Socionext (6526), Disco (6146), and a Consumer Goods stock (Zozo (3092) top-ranked, Ryohin Keikaku (7453) a better choice) are ADDs.</li>
<li>The DELETEs are still Takara Holdings (2531), Pacific Metals (5541), Sumitomo Osaka Cement (5232) with a dark horse candidate in Hitachi Zosen (7004) to replace Takara.</li>
<li>There is the upweight to Nitori (9843) but now less funkiness with Fast Retailing (9983). But it will continue being an interesting Nikkei 225 influence (for years to come).</li>
</ul>


No changes in the rankings since last time. Socionext (6526), Disco (6146), and a Consumer Goods stock (Zozo (3092) top-ranked, Ryohin Keikaku (7453) a better choice) are ADDs.
The DELETEs are still Takara Holdings (2531), Pacific Metals (5541), Sumitomo Osaka Cement (5232) with a dark horse candidate in Hitachi Zosen (7004) to replace Takara.
There is the upweight to Nitori (9843) but now less funkiness with Fast Retailing (9983). But it will continue being an interesting Nikkei 225 influence (for years to come).


March 2024 Nikkei 225 Rebal:  Socionext, Disco, and a Consumer Goods Stock, Still

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. 

Thematic (Sector/Industry)

<ul>
<li>New regulations due in April are forcing Japan’s logistics industry to evolve rapidly and seek efficiencies to offset a drastic shortage of drivers.</li>
<li>Most firms are aware of the long-term gains that removing inefficiencies in the current system will lead to and should result in improved operating margins.</li>
<li>The government announced new support policies and many consumers say they are willing to accept slower deliveries, which should lower costs for e-commerce.</li>
</ul>


New regulations due in April are forcing Japan’s logistics industry to evolve rapidly and seek efficiencies to offset a drastic shortage of drivers.
Most firms are aware of the long-term gains that removing inefficiencies in the current system will lead to and should result in improved operating margins.
The government announced new support policies and many consumers say they are willing to accept slower deliveries, which should lower costs for e-commerce.


Better Logistics, Slower Shipping, Lower Costs, Higher Profits

Equity Capital Markets

<ul>
<li>Zozo may lead in online fashion malls but its customer base, while young, is getting older.</li>
<li>In 2020, it acquired a majority stake in Yutori, a fledgling fashion mall targeting the young, which will now list this month.</li>
<li>Yutori has grown sales to ¥2.47 billion since launching five years ago. As well as Japan, it sees a major opportunity across Asia given Japanese street fashion popularity there.</li>
</ul>


Zozo may lead in online fashion malls but its customer base, while young, is getting older.
In 2020, it acquired a majority stake in Yutori, a fledgling fashion mall targeting the young, which will now list this month.
Yutori has grown sales to ¥2.47 billion since launching five years ago. As well as Japan, it sees a major opportunity across Asia given Japanese street fashion popularity there.


<ul>
<li>Today, somewhat earlier than expected), the Nikkei Index Team announced the changes to the Nikkei 225.</li>
<li>
<a href="https://www.smartkarma.com/entities/lasertec-corp" target="_blank" data-smartkarma-citation="entities:4126:1" rel="noopener">Lasertec Corp (6920 JP)</a>, <a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari (4385 JP)</a>, and <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a> are added. <a href="https://www.smartkarma.com/entities/nippon-sheet-glass-co-ltd" target="_blank" data-smartkarma-citation="entities:9013:1" rel="noopener">Nippon Sheet Glass (5202 JP)</a>, <a href="https://www.smartkarma.com/entities/mitsui-e-s-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2402:1" rel="noopener">Mitsui E&amp;S Holdings (7003 JP)</a>, and <a href="https://www.smartkarma.com/entities/matsui-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:6553:1" rel="noopener">Matsui Securities (8628 JP)</a> removed.</li>
<li>That triggers flows of about ¥480bn a side, and some big, big changes. The announcement helps understand new process better.</li>
</ul>


Today, somewhat earlier than expected), the Nikkei Index Team announced the changes to the Nikkei 225.

Lasertec Corp (6920 JP), Mercari (4385 JP), and Nitori Holdings (9843 JP) are added. Nippon Sheet Glass (5202 JP), Mitsui E&amp;S Holdings (7003 JP), and Matsui Securities (8628 JP) removed.
That triggers flows of about ¥480bn a side, and some big, big changes. The announcement helps understand new process better.


September Nikkei 225 Review - Lasertec, Mercari, Nitori IN, Expected DELETEs Out (Matsui the Biggie)

Japan

LY Corporation operates as an internet search engine "Yahoo! JAPAN". The Company provides electronic commerce and settlement finance services for small medium enterprises and individuals. LY also operates media business including search linked advertising and display advertising services.

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LY (4689 JP)

FINAL PREDICTIONS: March 2024 Nikkei 225 Rebal (Socionext, Disco, and 1 Consumer Goods Stock to ADD)

The announcement will come out in <3 weeks. Since I published, we have an update that Yanai-san sold Fast Retailing shares, Nitori jumped 8% on...

Travis Lundy

March 2024 Nikkei 225 Rebal: Socionext, Disco, and a Consumer Goods Stock, Still

Fast Retailing reported a beat, went to 11%, expect the possibility Yanai-san will be selling this week into the end of January, picking up the...

Travis Lundy

Better Logistics, Slower Shipping, Lower Costs, Higher Profits

Japan's distribution industry is adapting to new regulations due in April, addressing driver shortages and resulting in new efficiencies that will...

Michael Causton

Zozo-Owned Yutori IPO This Month

Zozo-owned Yutori aims to tap into the growing popularity of Japanese street fashion in Asia. Yutori has real promise and its IPO this month could...

Michael Causton

September Nikkei 225 Review - Lasertec, Mercari, Nitori IN, Expected DELETEs Out (Matsui the Biggie)

Since the Sep 2023 Nikkei announcement 10 days ago, Lasertec flatlined vs Peers, Nitori popped, then underperformed what might loosely be...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

FINAL PREDICTIONS: March 2024 Nikkei 225 Rebal (Socionext, Disco, and 1 Consumer Goods Stock to ADD)

The announcement will come out in <3 weeks. Since I published, we have an update that Yanai-san sold Fast Retailing shares, Nitori jumped 8% on...

Travis Lundy

March 2024 Nikkei 225 Rebal: Socionext, Disco, and a Consumer Goods Stock, Still

Fast Retailing reported a beat, went to 11%, expect the possibility Yanai-san will be selling this week into the end of January, picking up the...

Travis Lundy

Better Logistics, Slower Shipping, Lower Costs, Higher Profits

​Japan's distribution industry is adapting to new regulations due in April, addressing driver shortages and resulting in new efficiencies that will...

Michael Causton

Zozo-Owned Yutori IPO This Month

Zozo-owned Yutori aims to tap into the growing popularity of Japanese street fashion in Asia. Yutori has real promise and its IPO this month could...

Michael Causton

September Nikkei 225 Review - Lasertec, Mercari, Nitori IN, Expected DELETEs Out (Matsui the Biggie)

Since the Sep 2023 Nikkei announcement 10 days ago, Lasertec flatlined vs Peers, Nitori popped, then underperformed what might loosely be...

Travis Lundy

Japan's distribution industry is adapting to new regulations due in April, addressing driver shortages and resulting in new efficiencies that will...