Daily Brief Japan: DISCO Corp, Amvis Holdings Inc, Lawson Inc and more

In today’s briefing:

Nikkei 225 Index Rebalance Preview (Mar 2024): Ranking, Capping, Funding & Other Changes
Amvis Holdings Inc (7071 JP): Strong Performance in 9MFY23; Business Expansion Continues
Lawson: Seijo Ishii Producing at Home to Beat Inflation and Weak Yen

Nikkei 225 Index Rebalance Preview (Mar 2024): Ranking, Capping, Funding & Other Changes

The review period for the Nikkei 225 (NKY INDEX) March rebalance ends end January. There could be three changes at the rebalance with sector balance in focus.
Depending on the changes, passive trackers will need to buy between 6-28x ADV (11-50% of real float) on the inclusions and sell between 2.8-44x ADV on the deletions.
Fast Retailing (9983 JP) could be capped at 11% of the index weight and there will be buying in Nitori Holdings (9843 JP) due to the stepwise addition.

Amvis Holdings Inc (7071 JP) reported 40% YoY increase in revenue to ¥23B in 9MFY23, driven by 27% YoY increase in bed capacity and 86.6% utilization rate at existing facilities.
Operating profit grew 40% YoY to ¥6.2 billion. However, operating margin declined 10 basis points to 26.9%, due to the impact of inflation and increase in wages for long-service employees.
Amvis announced plans to open 25 new facilities and expand 1 facility (1,308 beds) in FY24. The company plans to raise patient payments by about ¥4,000 per month in Oct’23.

Seijo Ishii is Japan’s leading premium supermarket chain with some 200 stores and is being prepped for an IPO by its owner, Lawson.
After strong growth during Covid, sales have now flattened and the company’s large import business has suffered from higher costs due to the weak Yen and global crises.
To maintain its market position, it is reducing imports of packaged goods and increasing volumes of imported, high-end raw materials – and then manufacturing products itself.

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