Daily Brief Japan: MatsukiyoCocokara, Fast Retailing, Visional and more

In today’s briefing:

MSCI Feb 2023 QCIR Preview: Nearing the Start of the Review Period
Fast Retailing: Another Beat Would Suggest That FR’s North America & Europe Expansion Is Viable
HRTech Sector Series: Hybrid Work Models and Metaverse to See More Prominence in 2023

MSCI Feb 2023 QCIR Preview: Nearing the Start of the Review Period

We expect a number of changes to the MSCI Standard indices for the Asia Pacific region at the first Quarterly Comprehensive Index Review to be implemented on 28 February.
As usual, most changes are expected in China with a smattering of adds and deletes for the other markets.
On average, the adds have outperformed the deletes over the last few weeks and months and pre-positioning should continue for the next couple of weeks.

Although it looks quite challenging, we think Fast Retailing (9983 JP) should beat consensus when it reports 1QFY23 results on 12th Jan 2023.
We think shares could briefly touch 2021 highs on a relatively strong beat as it would suggest that the company’s aggressive expansion plans in North America and Europe are viable.
Thus, we would look to buy Fast Retailing with a short investment horizon. We see considerable downside risks over a full-year period.

This is the Third of HRTech sector series and the four companies that we have covered under this series have since reported earnings.
HRTech market has undergone rapid changes and 2023 will bring in more value to the recent transformation such as Hybrid work models and metaverse that the industry has witnessed.
Of the four companies, except for Recruit, other three continues to perform positively with Visional recording the highest growth among the four.

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