Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Nikkei 225 Rebalance to boot <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> and add <a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix Corp (8591 JP)</a> occurs today at the close. </li>
<li>The announcement was not a surprise per se, but BOTH have outperformed their Peer Baskets since the announcement, ORIX by a long ways.</li>
<li>ORIX is a bigger deal, Shinsei is worth buying a dip.</li>
</ul>


The Nikkei 225 Rebalance to boot Shinsei Bank (8303 JP) and add Orix Corp (8591 JP) occurs today at the close. 
The announcement was not a surprise per se, but BOTH have outperformed their Peer Baskets since the announcement, ORIX by a long ways.
ORIX is a bigger deal, Shinsei is worth buying a dip.


Nikkei 225 Rebalance Day - Shinsei Dip Chance?

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<ul>
<li>
<a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix Corp (8591)</a> replaces <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303)</a> in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a> at the close of trading on 1 April due to Shinsei Bank not trading on the Prime Market.</li>
<li>We estimate there will be passive buying of 27.5m shares on <a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix Corp (8591 JP)</a> while there will be selling of 2.75m shares on <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> </li>
<li>There appears to be some pre-positioning on <a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix Corp (8591 JP)</a> - the stock could outperform heading into index inclusion. </li>
</ul>



Orix Corp (8591) replaces Shinsei Bank (8303) in the Nikkei 225 at the close of trading on 1 April due to Shinsei Bank not trading on the Prime Market.
We estimate there will be passive buying of 27.5m shares on Orix Corp (8591 JP) while there will be selling of 2.75m shares on Shinsei Bank (8303 JP) 
There appears to be some pre-positioning on Orix Corp (8591 JP) - the stock could outperform heading into index inclusion. 


Nikkei 225 Index Rebalance: ORIX (8591) Replaces Shinsei Bank (8303)

Research from Mita Securities, Mita Securities

Mita Securities

Research from Mita Securities

Mita Securities provides a full scale diversified investment banking and financial services. A comprehensive investment banking department, specializes in rights offerings advisory, take-over bids agents, M&A etc. Including a proprietary trading desk, and wealth management department that offers brokerage, custody, real estate, and full proxy services.

Equity Bottom-Up

<ul><li>1-3Q credit costs are only 31% of the full-year guidance</li><li>Credit costs were 1.147bn yen (vs. 2.352bn yen for 1-3Q FY3/21), progress of only 31% toward the company’s full-year guidance of 3.65bn yen, and 45% toward our forecast of 2.5bn</li><li>The number of new guarantees executed in 1-3Q was 47,305 (+12.6% YoY), 79% progress toward the company’s full-year guidance of 60,000 (+5.1% YoY; same as our forecast)</li></ul>

1-3Q credit costs are only 31% of the full-year guidanceCredit costs were 1.147bn yen (vs. 2.352bn yen for 1-3Q FY3/21), progress of only 31% toward the company’s full-year guidance of 3.65bn yen, and 45% toward our forecast of 2.5bnThe number of new guarantees executed in 1-3Q was 47,305 (+12.6% YoY), 79% progress toward the company’s full-year guidance of 60,000 (+5.1% YoY; same as our forecast)

Zenkoku Hosho (7164): Extremely Low Credit Costs Continuing

<ul><li>We have raised our profit forecast for Zenkoku Hosho (7164, the company) by easing our assumption on credit costs</li><li>We believe that one of the medium- to long-term themes in Japan's financial industry is the growing momentum of reorganization among regional financial institutions</li><li>Our target price is equivalent to 14.6x our FY3/23 EPS forecast of 445.66 yen</li></ul>

We have raised our profit forecast for Zenkoku Hosho (7164, the company) by easing our assumption on credit costsWe believe that one of the medium- to long-term themes in Japan's financial industry is the growing momentum of reorganization among regional financial institutionsOur target price is equivalent to 14.6x our FY3/23 EPS forecast of 445.66 yen

Zenkoku Hosho (7164): Raising Our Profit Forecast by Easing Credit Cost Assumption; Reiterate Buy

<ul><li>Our top pick is S Foods (2292). Focal points: 1) its strength in meat wholesaling to restaurants, and 2) the US meat packer business benefiting from increased demand</li><li>Koshidaka HD (2157): We raised TP from 700 yen to 820 yen, given the company’s aggressive business stance.</li><li>IBJ (6071): The company announced to sell of its unprofitable businesses. Also, recovery in the number of marriages expected going forward.</li></ul>

Our top pick is S Foods (2292). Focal points: 1) its strength in meat wholesaling to restaurants, and 2) the US meat packer business benefiting from increased demandKoshidaka HD (2157): We raised TP from 700 yen to 820 yen, given the company’s aggressive business stance.IBJ (6071): The company announced to sell of its unprofitable businesses. Also, recovery in the number of marriages expected going forward.

List of Covered Stocks (26 November 2021)

Japan

Zenkoku Hosho Co. Ltd. is a credit guarantee company mainly for real estate or education loans. The company also provides insurance agency and credit check services.

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Zenkoku Hosho (7164 JP)

Nikkei 225 Rebalance Day - Shinsei Dip Chance?

Nikkei 225 Rebalance Day. Shinsei Out. ORIX In. Shinsei hasn't fallen in preparation but Orix is up strongly vs Peers in the period. There are two...

Travis Lundy

Nikkei 225 Index Rebalance: ORIX (8591) Replaces Shinsei Bank (8303)

Orix Corp replaces Shinsei Bank in the Nikkei225 Index at the close on 1 April. Passive trackers will need to buy 27.5m shares of Orix and sell...

Brian Freitas

Zenkoku Hosho (7164): Extremely Low Credit Costs Continuing

1-3Q credit costs are only 31% of the full-year guidance. Credit costs were 1.147bn yen (vs. 2.352bn yen for 1-3Q FY3/21), progress of only 31%...

Mita Securities

Zenkoku Hosho (7164): Raising Our Profit Forecast by Easing Credit Cost Assumption; Reiterate Buy

We have raised our profit forecast for Zenkoku Hosho (7164, the company) by easing our assumption on credit costs. We believe that one of the...

Mita Securities

List of Covered Stocks (26 November 2021)

Our top pick is S Foods (2292). Focal points: 1) its strength in meat wholesaling to restaurants, and 2) the US meat packer business benefiting...

Mita Securities

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