Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In mid-January, I wrote about <a href="https://www.smartkarma.com/insights/mercari-4385-applying-for-tse-prime-means-topix-inclusion-in-4-5-months" target="_blank" rel="noopener">Mercari's likely TOPIX inclusion 4-5 months later</a>. 4.5mos later, it had been included (<a href="https://www.smartkarma.com/insights/mercari-4385-topix-inclusion-finally-and-it-s-bigger-than-it-looks" target="_blank" data-smartkarma-citation="insights:70912" rel="noopener">Mercari (4385) TOPIX Inclusion, Finally... And It's Bigger Than It Looks</a>) .</li>
<li>The publicly-visible announcement data often does not show TOPIX inclusion parameters. A little sleuthing gets you there. </li>
<li>It's <em>still</em> bigger than it looks, but some large holders have recently been selling.</li>
</ul>


In mid-January, I wrote about Mercari's likely TOPIX inclusion 4-5 months later. 4.5mos later, it had been included (Mercari (4385) TOPIX Inclusion, Finally... And It's Bigger Than It Looks) .
The publicly-visible announcement data often does not show TOPIX inclusion parameters. A little sleuthing gets you there. 
It's still bigger than it looks, but some large holders have recently been selling.


Mercari (4385) - End-July TOPIX Inclusion Update

<ul>
<li>The July-end TOPIX FFW Rebalance is larger than most expected, I believe. </li>
<li>There should be US$3.5bn one-way, with only a couple of major buy names.</li>
<li>
<a href="https://www.smartkarma.com/entities/chugai-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:4489:1" rel="noopener">Chugai Pharmaceutical (4519 JP)</a>, <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a>, <a href="https://www.smartkarma.com/entities/unicharm-corp" target="_blank" data-smartkarma-citation="entities:6246:1" rel="noopener">Unicharm Corp (8113 JP)</a>, <a href="https://www.smartkarma.com/entities/kubota-corp" target="_blank" data-smartkarma-citation="entities:12926:1" rel="noopener">Kubota Corp (6326 JP)</a>, <a href="https://www.smartkarma.com/entities/asahi-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10482:1" rel="noopener">Asahi Group Holdings (2502 JP)</a>, and Shiseido (4911) are each US$170mm+ to sell.</li>
</ul>


The July-end TOPIX FFW Rebalance is larger than most expected, I believe. 
There should be US$3.5bn one-way, with only a couple of major buy names.

Chugai Pharmaceutical (4519 JP), Canon Inc (7751 JP), Unicharm Corp (8113 JP), Kubota Corp (6326 JP), Asahi Group Holdings (2502 JP), and Shiseido (4911) are each US$170mm+ to sell.


TOPIX Rebalance: End-July Rebal Is $3.5bn One-Way - Some Big Sell Names

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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.

Private Capital Markets

<ul>
<li>The Nikkei reported today that the GPIF would be investing in a startup fund for the first time. </li>
<li>The move is significant more for its signalling effect than the actual size of the investment which will do little to address the startup funding shortage in Japan. </li>
<li>Nevertheless it is important as it marks a change in direction and while it may go quietly unnoticed now, the follow-through is likely to be moderate but consistent and lasting.</li>
</ul>


The Nikkei reported today that the GPIF would be investing in a startup fund for the first time. 
The move is significant more for its signalling effect than the actual size of the investment which will do little to address the startup funding shortage in Japan. 
Nevertheless it is important as it marks a change in direction and while it may go quietly unnoticed now, the follow-through is likely to be moderate but consistent and lasting.


GPIF Investment In Startup Funds Marks A Cultural Shift

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

<ul>
<li>Net Protections Holdings, a buy now pay later service provider, raised around US$570m via selling a mix of primary and secondary shares in its Japan IPO in Dec 2021.</li>
<li>As per Yano Research, it had 40% market share in the domestic BNPL market for B2C transactions.</li>
<li>In this note, we will talk about the upcoming lock-up expiry on 12th Jun 2022.</li>
</ul>


Net Protections Holdings, a buy now pay later service provider, raised around US$570m via selling a mix of primary and secondary shares in its Japan IPO in Dec 2021.
As per Yano Research, it had 40% market share in the domestic BNPL market for B2C transactions.
In this note, we will talk about the upcoming lock-up expiry on 12th Jun 2022.


Net Protections Holding IPO Lock-Up - Small Expiry Now, Before 20% Is Released Later in the Year

Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Topix inclusion could generate some solid domestic passive buying interest, but we think the fundamentals remain Bearish</li>
<li>Mercari's GMV growth in Japan is slowing sharply. We see higher promotional costs impacting margins as competition with PayPay Flea market heats up</li>
<li>We think that street estimates are too high and we don't see a reason why the stock should be trading at substantial premium to Z Holdings</li>
</ul>


Topix inclusion could generate some solid domestic passive buying interest, but we think the fundamentals remain Bearish
Mercari's GMV growth in Japan is slowing sharply. We see higher promotional costs impacting margins as competition with PayPay Flea market heats up
We think that street estimates are too high and we don't see a reason why the stock should be trading at substantial premium to Z Holdings


Japan

Mercari, Inc. operates as an electronic commercial company. The Company offers electronic commercial software, operation management, marketing planning, and other marketplace services. Mercari serves customers worldwide.

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Mercari (4385 JP)

Mercari (4385) - End-July TOPIX Inclusion Update

Mercari (4385) will join TOPIX at 28 July close. The data suggests 16/5mm shares to buy, which is only 2x 3mo ADV but would be 18-20% of Real World...

Travis Lundy

TOPIX Rebalance: End-July Rebal Is $3.5bn One-Way - Some Big Sell Names

The July-end TOPIX rebalance is only have the size of June but that's still big. US$3.5bn a side. There are several large names and lots of names...

Travis Lundy

GPIF Investment In Startup Funds Marks A Cultural Shift

A move to begin investing in startup funds by the Government Pension Investment Fund suggests that Japan's startup ecosystem may finally be...

Mio Kato

Net Protections Holding IPO Lock-Up - Small Expiry Now, Before 20% Is Released Later in the Year

Net Protections Holdings, a buy now pay later service provider, raised around US$570m in its Japan IPO in Dec 2021. The lockup on one set of...

Sumeet Singh

Mercari (4385 JP) | Time to Flee

We are bearish on the outlook for Mercari's Japan business. Promotion costs are rising and margins are likely to come under further pressure. We...

Mark Chadwick

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