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.

Equity Bottom-Up

<p>We have covered Chiyoda’s SPERA hydrogen technology since 2017 and have been fascinated by the technology’s potential to make existing oil and gas infrastructure usable in a hydrogen transition. Now in partnership with ENEOS and the Queensland University of Technology, Chiyoda appears to have made significant further strides in reducing costs and investment burdens in the hydrogen supply chain.</p>

We have covered Chiyoda’s SPERA hydrogen technology since 2017 and have been fascinated by the technology’s potential to make existing oil and gas infrastructure usable in a hydrogen transition. Now in partnership with ENEOS and the Queensland University of Technology, Chiyoda appears to have made significant further strides in reducing costs and investment burdens in the hydrogen supply chain.

Chiyoda – This Just Removed a Big Hydrogen Bottleneck

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<div><p>JPX-Nikkei 400 is composed of common stocks whose main market is the TSE1, TSE2, JASDAQ, and Mothers sections (which will become the Prime Market, Standard Market, or Growth Market next April) of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents selected based on several factors including market capitalization, trading value, operating profits, and ROE.</p></div><div><p>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review is conducted using the final business day of June as the base date. </p></div><div><p>Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on trading data as of end-October 2021.</p></div>

JPX-Nikkei 400 is composed of common stocks whose main market is the TSE1, TSE2, JASDAQ, and Mothers sections (which will become the Prime Market, Standard Market, or Growth Market next April) of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents selected based on several factors including market capitalization, trading value, operating profits, and ROE.A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review is conducted using the final business day of June as the base date. Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on trading data as of end-October 2021.

JPX-Nikkei 400 Rebalance 2022: Leader Board End-Oct 2021

<div><p>JPX-Nikkei 400 is composed of common stocks whose main market is the TSE1, TSE2, JASDAQ, and Mothers sections (which will become the Prime Market, Standard Market, or Growth Market next April) of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents selected based on several factors including market capitalization, trading value, operating profits, and ROE.</p></div><p>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review is conducted using the final business day of June as the base date. </p><div><p>Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022. </p></div>

JPX-Nikkei 400 is composed of common stocks whose main market is the TSE1, TSE2, JASDAQ, and Mothers sections (which will become the Prime Market, Standard Market, or Growth Market next April) of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents selected based on several factors including market capitalization, trading value, operating profits, and ROE.A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review is conducted using the final business day of June as the base date. Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022. 

JPX-Nikkei 400 Rebalance 2022: Leader Board End-Sep 2021

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<p>American mining giant <a href="https://www.smartkarma.com/entities/freeport-mcmoran-inc" target="_blank" data-smartkarma-citation="entities:12491:1" rel="noopener">Freeport Mcmoran (FCX US)</a> will not proceed with plans to build a new copper smelter with China’s Tsingshan Holding Group in Indonesia, according to PT Freeport Indonesia.</p>
<p>The fact that this deal will not go ahead is a positive for <a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> as <a href="https://www.smartkarma.com/entities/freeport-mcmoran-inc" target="_blank" data-smartkarma-citation="entities:12491:1" rel="noopener">Freeport Mcmoran (FCX US)</a> is scheduled to build a smelter at its JIIPE (Java Integrated Industrial and Port Estate) Industrial estate, and this news cements that deal.</p>
<p><a href="https://www.smartkarma.com/entities/freeport-mcmoran-inc" target="_blank" data-smartkarma-citation="entities:12491:1" rel="noopener">Freeport Mcmoran (FCX US)</a> has confirmed it will go ahead with plans to build a new smelter near its existing copper refining operations at the JIIPE Industrial estate in Gresik and has signed an EPC contract with Japanese engineering company <a href="https://www.smartkarma.com/entities/chiyoda-corp" target="_blank" data-smartkarma-citation="entities:6232:1" rel="noopener">Chiyoda Corp (6366 JP)</a> to build the plant.</p>
<p>This is a significant development for <a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> to have this confirmation of <a href="https://www.smartkarma.com/entities/freeport-mcmoran-inc" target="_blank" data-smartkarma-citation="entities:12491:1" rel="noopener">Freeport Mcmoran (FCX US)</a> as an anchor tenant for JIIPE as it will draw many more investors in industries related to copper like electric vehicle (EV) batteries to the JIIPE Estate.</p>
<div>JIIPE should also see more focus given its recently granted special economic zone status (KEK) status, with healthy land enquiries which should enable the company to increase marketing sales for this year, currently forecast at 35 ha. </div>
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<a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> is due to announce 1H2021 results toward the end of July, with the expectation of a strong set of numbers similar to Q12021 with profit growth of more than +25%.</div>
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<p>The company<a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener"></a> is trading on 11.1x FY21E PER and 11.0x FY22E PER versus its 5-year average forward PER of 17.2x, which makes it look attractive from a valuation perspective.</p>
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American mining giant Freeport Mcmoran (FCX US) will not proceed with plans to build a new copper smelter with China’s Tsingshan Holding Group in Indonesia, according to PT Freeport Indonesia.
The fact that this deal will not go ahead is a positive for AKR Corporindo (AKRA IJ) as Freeport Mcmoran (FCX US) is scheduled to build a smelter at its JIIPE (Java Integrated Industrial and Port Estate) Industrial estate, and this news cements that deal.
Freeport Mcmoran (FCX US) has confirmed it will go ahead with plans to build a new smelter near its existing copper refining operations at the JIIPE Industrial estate in Gresik and has signed an EPC contract with Japanese engineering company Chiyoda Corp (6366 JP) to build the plant.
This is a significant development for AKR Corporindo (AKRA IJ) to have this confirmation of Freeport Mcmoran (FCX US) as an anchor tenant for JIIPE as it will draw many more investors in industries related to copper like electric vehicle (EV) batteries to the JIIPE Estate.
JIIPE should also see more focus given its recently granted special economic zone status (KEK) status, with healthy land enquiries which should enable the company to increase marketing sales for this year, currently forecast at 35 ha. 


AKR Corporindo (AKRA IJ) is due to announce 1H2021 results toward the end of July, with the expectation of a strong set of numbers similar to Q12021 with profit growth of more than +25%.





The company is trading on 11.1x FY21E PER and 11.0x FY22E PER versus its 5-year average forward PER of 17.2x, which makes it look attractive from a valuation perspective.






AKR Corporindo (AKRA IJ) - Freeport Smelter a Boon for JIIPE

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

<p>With oil prices above ¥70/bbl, economies recovering from the pandemic, and Yokogawa Electric down 38% from its 52-week high, it seems like a good time to have another look at Japan's world-class supplier of control equipment for the oil &amp; gas, petrochemical and other industries.</p><p>Profits are likely to be weak again in FY Mar-22 but after years of under-investment in its main user industries, the stage is set for a rebound at Yokogawa. New orders began to pick up two quarters ago and should continue to rise this year and next.</p><p>On a three-year view, we expect the company's sales and operating profit to regain their previous peaks, creating potential upside for the share price of more than 40%.</p><p>We also recommend have another look at  <a href="https://www.smartkarma.com/insights/chiyoda-qatar-comes-through" target="_blank" data-smartkarma-citation="insights:47962" rel="noopener">Chiyoda – Qatar Comes Through</a> by Mio Kato for an insight into Chiyoda Corp., one of world's top EPC (Engineering, Procurement &amp; Construction) service providers to the LNG and petroleum industries.</p>

With oil prices above ¥70/bbl, economies recovering from the pandemic, and Yokogawa Electric down 38% from its 52-week high, it seems like a good time to have another look at Japan's world-class supplier of control equipment for the oil &amp; gas, petrochemical and other industries.Profits are likely to be weak again in FY Mar-22 but after years of under-investment in its main user industries, the stage is set for a rebound at Yokogawa. New orders began to pick up two quarters ago and should continue to rise this year and next.On a three-year view, we expect the company's sales and operating profit to regain their previous peaks, creating potential upside for the share price of more than 40%.We also recommend have another look at  Chiyoda – Qatar Comes Through by Mio Kato for an insight into Chiyoda Corp., one of world's top EPC (Engineering, Procurement &amp; Construction) service providers to the LNG and petroleum industries.

Yokogawa Electric 6841 JP): Weak Share Price & Rebounding Oil Prices Create Opportunity

Japan

CHIYODA CORPORATION constructs, inspects, and maintains industrial plants around the world.  Those plants include oil refinery, petrochemical, food, and pharmaceutical plants.  The Company also provides comprehensive engineering services for such as energy saving, factory automation (FA), and environmental preservation for water treatment and soil purification.

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Chiyoda Corp (6366 JP)

Chiyoda – This Just Removed a Big Hydrogen Bottleneck

In partnership with ENEOS and the Queensland University of Technology, Chiyoda appears to have made significant further strides in reducing costs...

Mio Kato

JPX-Nikkei 400 Rebalance 2022: Leader Board End-Oct 2021

In this insight, we take a look at the potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on trading...

Janaghan Jeyakumar, CFA

JPX-Nikkei 400 Rebalance 2022: Leader Board End-Sep 2021

A look at the evolution potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on end-September 2021 data.

Janaghan Jeyakumar, CFA

AKR Corporindo (AKRA IJ) - Freeport Smelter a Boon for JIIPE

AKR Corporindo (AKRA IJ) remains one of the few good quality industrial plays in Indonesia through its chemical and fuel distribution business plus...

Angus Mackintosh

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Market Cap (USDm)

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Chiyoda – This Just Removed a Big Hydrogen Bottleneck

In partnership with ENEOS and the Queensland University of Technology, Chiyoda appears to have made significant further strides in reducing costs...

Mio Kato

JPX-Nikkei 400 Rebalance 2022: Leader Board End-Oct 2021

In this insight, we take a look at the potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on trading...

Janaghan Jeyakumar, CFA

JPX-Nikkei 400 Rebalance 2022: Leader Board End-Sep 2021

A look at the evolution potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on end-September 2021 data.

Janaghan Jeyakumar, CFA

AKR Corporindo (AKRA IJ) - Freeport Smelter a Boon for JIIPE

AKR Corporindo (AKRA IJ) remains one of the few good quality industrial plays in Indonesia through its chemical and fuel distribution business plus...

Angus Mackintosh

Yokogawa Electric 6841 JP): Weak Share Price & Rebounding Oil Prices Create Opportunity

Well positioned to benefit from renewed investment in oil and gas as the economy recovers and prices rise. Projected valuations attractive. 40%...

Scott Foster