'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Quantitative Analysis

<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/093/001/original/2019-07-13_16-16-31.png?1563002212" class="editor-image img-responsive" data-smartkarma-image-id="93001"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/093/005/original/2019-07-13_16-25-24.png?1563002742" class="editor-image img-responsive" data-smartkarma-image-id="93005"></figure>Source: Japan Analytics
</div>MOVING AVERAGE BREAKOUT - Japanese equities have now risen by 5.1% since the low of 4th June and, since July 1st, the Total Market Value has exceeded the 50-Day Moving Average for the first time since 26th April. Over the last two weeks, the Total Market Value has gained 1.7% in both Yen and US dollar times. For the previous twelve months, the equity market has moved in line with the US dollar/Japanese Yen exchange rate. It remains to be seen how the 'gap' that has opened up in the last month will be closed. Any further strength in the Yen from current levels will likely see the market slip below the 50-Day Moving Average again.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/093/020/original/2019-07-14_06-28-16.png?1563053334" class="editor-image img-responsive" data-smartkarma-image-id="93020"></figure><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/093/024/original/2019-07-14_06-45-29.png?1563054338" class="editor-image img-responsive" data-smartkarma-image-id="93024"></figure> Source: Japan Analytics</div>VALUE TRADED RATIO - The Value Traded Ratio (Value Traded/Total Market Value) has seen two new eighteen-month lows. If the three days around Christmas are excluded, the current apathy towards Japanese equities is the most extreme since 2012 and is confirmed by recent BAML investor surveys. In the past, such periods of inactivity (marked"▲"above)  have preceded changes in market direction, more often upwards rather than downwards and suggest the current rally has more 'legs'. <div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/093/025/original/2019-07-14_06-47-40.png?1563054585" class="editor-image img-responsive" data-smartkarma-image-id="93025"></figure> Source: Japan Analytics</div>TORAKU INDEX - Conversely, the Toraku advance/decline index is suggesting a degree of caution having breached the 120 'overbought' line for only the third time in eighteen months. Combining this analysis with the Value Traded Ratio, there is scope for a short-term upward move akin to that of October 2018 to be followed by a sharper downward trend into the autumn.  <div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/093/026/original/2019-07-14_06-54-51.png?1563054906" class="editor-image img-responsive" data-smartkarma-image-id="93026"></figure> Source: Japan Analytics</div>VOLUME SCORE TIMELINE - The lull in market turnover is confirmed in the greener 'bias' in our Sector volume timeline. The Retail and Restaurant Sectors are hot as we are in the middle of the quarterly results announcements for February/May/August/November year-end companies. REITs remain the 'go-to' defensive Sector while the Information Technology and Internet Sectors are the 'tema-du-jour' - to mix language metaphors. The 'untouchables' are Metals, Banks, UtilitiesTransportation,  and Multi-Industry.<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/093/028/original/2019-07-14_07-31-40.png?1563057109" class="editor-image img-responsive" data-smartkarma-image-id="93028"></figure> Source: Japan Analytics</div>3-MONTH SECTOR CONTRIBUTION - Over the last three months, a long Telcos/short Autos strategy would have yielded 82 basis points of performance. The Retail Sector has responded well to the results released so far led by drugstores <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia (3141 JP)</a> and <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha (3391 JP), </a><a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a><a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">, and </a><a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson (2651 JP)</a>. Electrical Equipment has suffered from weakness in component stocks <a href="https://www.smartkarma.com/entities/alps-alpine-co-ltd" target="_blank" data-smartkarma-citation="entities:12001:1" rel="noopener">Alps Alpine (6770 JP)</a> (-38% over one year), <a href="https://www.smartkarma.com/entities/murata-manufacturing-co-ltd" target="_blank" data-smartkarma-citation="entities:11649:1" rel="noopener">Murata (6981 JP)</a> (see <a href="https://www.smartkarma.com/profiles/scott-foster" target="_blank" data-smartkarma-citation="accounts:1134" rel="noopener">Scott Foster</a>'s <a href="https://www.smartkarma.com/insights/murata-mfg-6981-jp-buy-on-decline-for-the-long-term" target="_blank" data-smartkarma-citation="insights:30919" rel="noopener">(Buy on Decline for the Long Term</a>), and <a href="https://www.smartkarma.com/entities/taiyo-yuden-co-ltd" target="_blank" data-smartkarma-citation="entities:9924:1" rel="noopener">Taiyo Yuden (6976 JP)</a>, while <a href="https://www.smartkarma.com/entities/smc-corp" target="_blank" data-smartkarma-citation="entities:20866:1" rel="noopener">SMC (6273 JP)</a>, <a href="https://www.smartkarma.com/entities/fanuc-corp" target="_blank" data-smartkarma-citation="entities:752:1" rel="noopener">Fanuc (6954 JP)</a>, and <a href="https://www.smartkarma.com/entities/komatsu-ltd" target="_blank" data-smartkarma-citation="entities:8416:1" rel="noopener">Komatsu (6301 JP)</a> have weighed on the Machinery Sector.<div class="content-caption">
<figure class="editor-figure mceNonEditable"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/093/031/original/2019-07-14_07-44-47.png?1563057897" class="editor-image img-responsive" data-smartkarma-image-id="93031"></figure></figure> Source: Japan Analytics</div>SECTOR SCORE MATRIX - Arranging our cap-weighted Sector Relative Price Scores and Results &amp; Revisions Scores in a four-quadrant matrix whose extremes are Contrarian Sell, Contrarian Buy, Unrequited Growth, and Ex-Growth suggest profit-taking in Information Technology (<a href="https://www.smartkarma.com/entities/obic-co-ltd" target="_blank" data-smartkarma-citation="entities:1273:1" rel="noopener">OBIC (4684 JP)</a>, Other Commerical Products (<a href="https://www.smartkarma.com/entities/hoya-corp" target="_blank" data-smartkarma-citation="entities:8990:1" rel="noopener">Hoya Corp (7741 JP)</a>, and Commercial Services (<a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit 6098 JP).</a> We are not contrarian enough to fall into the banking 'trap', however, the Metals Sector may offer some 'crumbs' of comfort for those in need of a deep value 'fix' (<a href="https://www.smartkarma.com/entities/nippon-steel-sumitomo-metal-corp" target="_blank" data-smartkarma-citation="entities:961:1" rel="noopener">Nippon Steel &amp; Sumitomo Metal (5401 JP)</a>) <div class="content-highlight">In the DETAIL section below, we will review Sector performance, scores and valuation in more detail, as well as Company Results &amp; Revisions and individual stock performance over the previous two weeks, as well as adding some brief comments on <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia (3141 JP)</a>, <a href="https://www.smartkarma.com/entities/daiseki-co-ltd" target="_blank" data-smartkarma-citation="entities:2330:1" rel="noopener">Daiseki (9793 JP), </a><a href="https://www.smartkarma.com/entities/yaskawa-electric-corp" target="_blank" data-smartkarma-citation="entities:2458:1" rel="noopener">Yaskawa Electric (6506 JP), </a><a href="https://www.smartkarma.com/entities/pola-orbis-holdings-inc" target="_blank" data-smartkarma-citation="entities:2287:1" rel="noopener">Pola Orbis (4927 JP)</a>, <a href="https://www.smartkarma.com/entities/sekisui-house-ltd" target="_blank" data-smartkarma-citation="entities:4508:1" rel="noopener">Sekisui House (1928 JP)</a>, <a href="https://www.smartkarma.com/entities/keyence-corp" target="_blank" data-smartkarma-citation="entities:3077:1" rel="noopener">Keyence (6861 JP)</a>, <a href="https://www.smartkarma.com/entities/japan-post-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:840:1" rel="noopener">Japan Post Insurance (7181 JP)</a>, and <a href="https://www.smartkarma.com/entities/obic-co-ltd" target="_blank" data-smartkarma-citation="entities:1273:1" rel="noopener">Obic (4684 JP)</a>.</div>


Source: Japan Analytics
MOVING AVERAGE BREAKOUT - Japanese equities have now risen by 5.1% since the low of 4th June and, since July 1st, the Total Market Value has exceeded the 50-Day Moving Average for the first time since 26th April. Over the last two weeks, the Total Market Value has gained 1.7% in both Yen and US dollar times. For the previous twelve months, the equity market has moved in line with the US dollar/Japanese Yen exchange rate. It remains to be seen how the 'gap' that has opened up in the last month will be closed. Any further strength in the Yen from current levels will likely see the market slip below the 50-Day Moving Average again.
 Source: Japan AnalyticsVALUE TRADED RATIO - The Value Traded Ratio (Value Traded/Total Market Value) has seen two new eighteen-month lows. If the three days around Christmas are excluded, the current apathy towards Japanese equities is the most extreme since 2012 and is confirmed by recent BAML investor surveys. In the past, such periods of inactivity (marked"▲"above)  have preceded changes in market direction, more often upwards rather than downwards and suggest the current rally has more 'legs'. 
 Source: Japan AnalyticsTORAKU INDEX - Conversely, the Toraku advance/decline index is suggesting a degree of caution having breached the 120 'overbought' line for only the third time in eighteen months. Combining this analysis with the Value Traded Ratio, there is scope for a short-term upward move akin to that of October 2018 to be followed by a sharper downward trend into the autumn.  
 Source: Japan AnalyticsVOLUME SCORE TIMELINE - The lull in market turnover is confirmed in the greener 'bias' in our Sector volume timeline. The Retail and Restaurant Sectors are hot as we are in the middle of the quarterly results announcements for February/May/August/November year-end companies. REITs remain the 'go-to' defensive Sector while the Information Technology and Internet Sectors are the 'tema-du-jour' - to mix language metaphors. The 'untouchables' are Metals, Banks, UtilitiesTransportation,  and Multi-Industry.
 Source: Japan Analytics3-MONTH SECTOR CONTRIBUTION - Over the last three months, a long Telcos/short Autos strategy would have yielded 82 basis points of performance. The Retail Sector has responded well to the results released so far led by drugstores Welcia (3141 JP) and Tsuruha (3391 JP), Fast Retailing (9983 JP), and Lawson (2651 JP). Electrical Equipment has suffered from weakness in component stocks Alps Alpine (6770 JP) (-38% over one year), Murata (6981 JP) (see Scott Foster's (Buy on Decline for the Long Term), and Taiyo Yuden (6976 JP), while SMC (6273 JP), Fanuc (6954 JP), and Komatsu (6301 JP) have weighed on the Machinery Sector.
 Source: Japan AnalyticsSECTOR SCORE MATRIX - Arranging our cap-weighted Sector Relative Price Scores and Results &amp; Revisions Scores in a four-quadrant matrix whose extremes are Contrarian Sell, Contrarian Buy, Unrequited Growth, and Ex-Growth suggest profit-taking in Information Technology (OBIC (4684 JP), Other Commerical Products (Hoya Corp (7741 JP), and Commercial Services (Recruit 6098 JP). We are not contrarian enough to fall into the banking 'trap', however, the Metals Sector may offer some 'crumbs' of comfort for those in need of a deep value 'fix' (Nippon Steel &amp; Sumitomo Metal (5401 JP)) In the DETAIL section below, we will review Sector performance, scores and valuation in more detail, as well as Company Results &amp; Revisions and individual stock performance over the previous two weeks, as well as adding some brief comments on Welcia (3141 JP), Daiseki (9793 JP), Yaskawa Electric (6506 JP), Pola Orbis (4927 JP), Sekisui House (1928 JP), Keyence (6861 JP), Japan Post Insurance (7181 JP), and Obic (4684 JP).

🇯🇵 JAPAN • Market Update - Levitating on Thin Air

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.

Event-Driven

The Japanese government's plans to selldown US$12bn worth of <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post Holdings (6178 JP)</a>, in relation to which, in my Apr 2019 insight, <a href="https://www.smartkarma.com/insights/japan-post-holdings-and-japan-post-bank-early-thoughts-on-a-choice-of-two-trades" target="_blank" rel="noopener">Japan Post Holdings and Japan Post Bank - Early Thoughts on a Choice of Two Trades,</a> I had highlighted the possibility that JPH could sell some of its holding in JPB and use the proceeds to conduct a bigger buyback as and when the government sells down its shares in JPH. 
In yesterday's insight, <a href="https://www.smartkarma.com/insights/japan-post-holdings-and-japan-post-bank-might-be-time-to-switch-part-i" target="_blank" rel="noopener"> Japan Post Holdings and Japan Post Bank - Might Be Time to Switch - Part I</a>, I looked at how that trade has played out and whether it still made sense. I concluded that it might be better to be short JPH while waiting for the actual selldown. This is the second part of the same series, in which I will take a quick look at the valuation angle.
<hr>
For people interested in reading more about the history and background, I've covered the IPO and JPH and JPI sell downs in the below series of insights:
<ul>
<li>All three IPOs: <a href="https://www.smartkarma.com/insights/when-the-bank-is-cheap-and-holdco-discount-makes-the-mothership-cheaper-then-who-needs-insurance" target="_blank" rel="noopener">When the bank is cheap and holdco discount makes the mothership cheaper, then who needs insurance?</a>
</li>
<li>JPH IPO: <a href="https://www.smartkarma.com/insights/final-call-to-board-the-mothership-they-don-t-come-much-cheaper-than-this" target="_blank" rel="noopener">Final call to board the mothership. They don’t come much cheaper than this</a>
</li>
<li>JPH Placement: <a href="https://www.smartkarma.com/insights/japan-post-holdings-placement-similar-reasons-similar-price-will-probably-yield-similar-returns" target="_blank" rel="noopener">Japan Post Holdings Placement - Similar Reasons, Similar Price Will Probably Yield Similar Returns</a>
</li>
<li>JPH and JPB possible trade: <a href="https://www.smartkarma.com/insights/japan-post-holdings-and-japan-post-bank-early-thoughts-on-a-choice-of-two-trades" target="_blank" rel="noopener">Japan Post Holdings and Japan Post Bank - Early Thoughts on a Choice of Two Trades</a>
</li>
<li>Part I of the JPH short trade:<a href="https://www.smartkarma.com/insights/japan-post-holdings-and-japan-post-bank-might-be-time-to-switch-part-i" target="_blank" rel="noopener"> Japan Post Holdings and Japan Post Bank - Might Be Time to Switch - Part I</a>
</li>
</ul>
<hr>
<ul>
<li>JPI IPO: <a href="https://www.smartkarma.com/insights/three-s-a-crowd-a-minnow-amongst-giants-risks-getting-lost-in-the-chatter" target="_blank" rel="noopener">Three’s a crowd - A minnow amongst giants risks getting lost in the chatter</a>
</li>
<li>JPI Placement: <a href="https://www.smartkarma.com/insights/japan-post-insurance-placement-3x-the-ipo-size-basics-and-index-impact" target="_blank" rel="noopener">Japan Post Insurance Placement - 3x the IPO Size - Basics and Index Impact</a>
</li>
<li>JPI Placement: <a href="https://www.smartkarma.com/insights/japan-post-insurance-placement-performance-of-other-big-deals-indicates-a-need-for-correction" target="_blank" rel="noopener">Japan Post Insurance Placement - Performance of Other Big Deals Indicates a Need for Correction</a>
</li>
</ul>
<hr>
<ul>
<li>JPB IPO: <a href="https://www.smartkarma.com/insights/dividend-yield-looks-enticing-versus-jgbs-yield-while-risks-are-similar" target="_blank" rel="noopener">Dividend yield looks enticing versus JGBs yield, while risks are similar</a>
</li>
</ul>

The Japanese government's plans to selldown US$12bn worth of Japan Post Holdings (6178 JP), in relation to which, in my Apr 2019 insight, Japan Post Holdings and Japan Post Bank - Early Thoughts on a Choice of Two Trades, I had highlighted the possibility that JPH could sell some of its holding in JPB and use the proceeds to conduct a bigger buyback as and when the government sells down its shares in JPH. 
In yesterday's insight,  Japan Post Holdings and Japan Post Bank - Might Be Time to Switch - Part I, I looked at how that trade has played out and whether it still made sense. I concluded that it might be better to be short JPH while waiting for the actual selldown. This is the second part of the same series, in which I will take a quick look at the valuation angle.

For people interested in reading more about the history and background, I've covered the IPO and JPH and JPI sell downs in the below series of insights:

All three IPOs: When the bank is cheap and holdco discount makes the mothership cheaper, then who needs insurance?

JPH IPO: Final call to board the mothership. They don’t come much cheaper than this

JPH Placement: Japan Post Holdings Placement - Similar Reasons, Similar Price Will Probably Yield Similar Returns

JPH and JPB possible trade: Japan Post Holdings and Japan Post Bank - Early Thoughts on a Choice of Two Trades

Part I of the JPH short trade: Japan Post Holdings and Japan Post Bank - Might Be Time to Switch - Part I




JPI IPO: Three’s a crowd - A minnow amongst giants risks getting lost in the chatter

JPI Placement: Japan Post Insurance Placement - 3x the IPO Size - Basics and Index Impact

JPI Placement: Japan Post Insurance Placement - Performance of Other Big Deals Indicates a Need for Correction




JPB IPO: Dividend yield looks enticing versus JGBs yield, while risks are similar



Japan Post Holdings and Japan Post Bank - Might Be Time to Switch - Part II

The Japanese government's plans to sell down US$12bn worth of <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post Holdings (6178 JP)</a> ​seem to be progressing well. Banks have been appointed ahead of the likely timeline of Sep 2019. 
In my earlier insight in Apr 2019, <a href="https://www.smartkarma.com/insights/japan-post-holdings-and-japan-post-bank-early-thoughts-on-a-choice-of-two-trades" target="_blank" rel="noopener">Japan Post Holdings and Japan Post Bank - Early Thoughts on a Choice of Two Trades,</a> I had highlighted the possibility that JPH could sell some of its holding in JPB and use the proceeds to conduct a bigger buyback as and when the government sells down its shares in JPH. If one did put on that trade they would made 8% odd over the past two months or so.  However, in my view, the window for JPH to sell down JPB shares ahead of its own placement is now rapidly closing. 
Since the possibility of the progressive selldown and buyback (JPB selldown by JPH and the large JPH buyback into the JPH government selldown) not materializing increases with every passing day, in this insight, I'll instead look at the possibilities of setting up a trade around the government selldown of JPH, without the JPB stake sale.
<hr>
For people interested in reading more about the history and background, I've covered the IPO and JPH and JPI sell downs in the below series of insights:
<ul>
<li>All three IPOs: <a href="https://www.smartkarma.com/insights/when-the-bank-is-cheap-and-holdco-discount-makes-the-mothership-cheaper-then-who-needs-insurance" target="_blank" rel="noopener">When the bank is cheap and holdco discount makes the mothership cheaper, then who needs insurance?</a>
</li>
<li>JPH IPO: <a href="https://www.smartkarma.com/insights/final-call-to-board-the-mothership-they-don-t-come-much-cheaper-than-this" target="_blank" rel="noopener">Final call to board the mothership. They don’t come much cheaper than this</a>
</li>
<li>JPH Placement: <a href="https://www.smartkarma.com/insights/japan-post-holdings-placement-similar-reasons-similar-price-will-probably-yield-similar-returns" target="_blank" rel="noopener">Japan Post Holdings Placement - Similar Reasons, Similar Price Will Probably Yield Similar Returns</a>
</li>
<li>JPH and JPB possible trade: <a href="https://www.smartkarma.com/insights/japan-post-holdings-and-japan-post-bank-early-thoughts-on-a-choice-of-two-trades" target="_blank" rel="noopener">Japan Post Holdings and Japan Post Bank - Early Thoughts on a Choice of Two Trades</a>
</li>
</ul>
<hr>
<ul>
<li>JPI IPO: <a href="https://www.smartkarma.com/insights/three-s-a-crowd-a-minnow-amongst-giants-risks-getting-lost-in-the-chatter" target="_blank" rel="noopener">Three’s a crowd - A minnow amongst giants risks getting lost in the chatter</a>
</li>
<li>JPI Placement: <a href="https://www.smartkarma.com/insights/japan-post-insurance-placement-3x-the-ipo-size-basics-and-index-impact" target="_blank" rel="noopener">Japan Post Insurance Placement - 3x the IPO Size - Basics and Index Impact</a>
</li>
<li>JPI Placement: <a href="https://www.smartkarma.com/insights/japan-post-insurance-placement-performance-of-other-big-deals-indicates-a-need-for-correction" target="_blank" rel="noopener">Japan Post Insurance Placement - Performance of Other Big Deals Indicates a Need for Correction</a>
</li>
</ul>
<hr>
<ul>
<li>JPB IPO: <a href="https://www.smartkarma.com/insights/dividend-yield-looks-enticing-versus-jgbs-yield-while-risks-are-similar" target="_blank" rel="noopener">Dividend yield looks enticing versus JGBs yield, while risks are similar</a>
</li>
</ul>

The Japanese government's plans to sell down US$12bn worth of Japan Post Holdings (6178 JP) ​seem to be progressing well. Banks have been appointed ahead of the likely timeline of Sep 2019. 
In my earlier insight in Apr 2019, Japan Post Holdings and Japan Post Bank - Early Thoughts on a Choice of Two Trades, I had highlighted the possibility that JPH could sell some of its holding in JPB and use the proceeds to conduct a bigger buyback as and when the government sells down its shares in JPH. If one did put on that trade they would made 8% odd over the past two months or so.  However, in my view, the window for JPH to sell down JPB shares ahead of its own placement is now rapidly closing. 
Since the possibility of the progressive selldown and buyback (JPB selldown by JPH and the large JPH buyback into the JPH government selldown) not materializing increases with every passing day, in this insight, I'll instead look at the possibilities of setting up a trade around the government selldown of JPH, without the JPB stake sale.

For people interested in reading more about the history and background, I've covered the IPO and JPH and JPI sell downs in the below series of insights:

All three IPOs: When the bank is cheap and holdco discount makes the mothership cheaper, then who needs insurance?

JPH IPO: Final call to board the mothership. They don’t come much cheaper than this

JPH Placement: Japan Post Holdings Placement - Similar Reasons, Similar Price Will Probably Yield Similar Returns

JPH and JPB possible trade: Japan Post Holdings and Japan Post Bank - Early Thoughts on a Choice of Two Trades




JPI IPO: Three’s a crowd - A minnow amongst giants risks getting lost in the chatter

JPI Placement: Japan Post Insurance Placement - 3x the IPO Size - Basics and Index Impact

JPI Placement: Japan Post Insurance Placement - Performance of Other Big Deals Indicates a Need for Correction




JPB IPO: Dividend yield looks enticing versus JGBs yield, while risks are similar



Japan Post Holdings and Japan Post Bank - Might Be Time to Switch - Part I

APAC IPOs & Placements

Zhen Zhou, Toh

Equity Capital Markets

Innovent Biologics / Equity Capital Markets

Aequitas Research puts out a weekly update on the deals that have been covered by Smartkarma Insight Providers recently, along with updates for upcoming IPOs.
The short week did little to slow down placements in Hong Kong.
Cofco Meat (1610 HK) and Innovent Biologics Inc (1801 HK) shares were sold by investors in the companies but the two had polarizing post-deal performance. Cofco Meat's share price held up well even after its settlement today on the back of strong pork prices while Innovent Bio's share price broke through deal price on the first day as three sellers came onto the market to sell just as lock-up expire. The eagerness to sell Innovent's shares is probably the reason for its poor performance since there are about US$3.1bn worth of shares unlocked. 
As for upcoming IPOs in Hong Kong, Mulsanne Group's IPO has been approved by HKEX and the PHIP has been filed. Sumeet Singh had already analyzed the company earlier in Alpha Smart - Pre-IPO - PE Investors Recovered 56% of Their Cost in Two Years but Left It in Debt. There had also been news reporting that Citi and BAML have been added as advisoers to AB Inbev's Asia IPO. For early thoughts on the company:

Ab InBev Asia Pre-IPO - Quick Note - More like CR Beer Rather than Tsingtao
Ab InBev Asia Pre-IPO - A Brief History of the Asia Pacific Operations - Eeking Out Growth in China

In India, Sterling and Wilson has already started its investor education for its IPO. We are probably going to see more filings and IPO launch in India after the decent performance by the two IPOs this week, Metropolis Health Services Limited (METROHL IN) and Polycab India (POLYCAB IN).
In Japan, Japan Post Insurance (7181 JP)'s mega placement had been a disappointment so far partly due to its strong share price rally post-announcement we saw last week. Sumeet Singh had mentioned in his note that the deal has to price at a discount to its undisturbed price to warrant a buy for the placement. Neverthless, there could still be a trade in the Japan Post Holdings (6178 JP) and Japan Post Bank (7182 JP) as explained in Japan Post Holdings and Japan Post Bank - Early Thoughts on a Choice of Two Trades.
Accuracy Rate:Our overall accuracy rate is 72.4% for IPOs and 64% for Placements (Performance measurement criteria is explained at the end of the note)New IPO filings  
Sterling and Wilson (India, US$600m)
Bajaj Energy (India, US$700m)
Hutchison China MediTech (Hong Kong, US$500m)
Below is a snippet of our IPO tool showing upcoming events for the next week. The IPO tool is designed to provide readers with timely information on all IPO related events (Book open/closing, listing, initiation, lock-up expiry, etc) for all the deals that we have worked on. You can access the tool here or through the tools menu.Source: Aequitas Research, SmartkarmaNews on Upcoming IPOs  
Elite Partners Capital plans SGX REIT IPO of up to S$500m
SoftBank-backed CloudMinds mulls IPO of up to US$1bn
Sterling and Wilson files paper for ₹4,500-cr IPO
Chi-Med Files Application to List in Hong Kong and Announces Proposed Global Offering
Poly Developments plans to list management unit
Analysis on Upcoming IPO  
MabPharm (迈博医药) IPO: Thoughts on Valuation (Part 2)
Duiba (兑吧) Pre-IPO Review - A Case of Successful Pivot - Gamification of Ads


Name
Insight

Hong Kong

AB Inbev
Ab InBev Asia Pre-IPO - A Brief History of the Asia Pacific Operations - Eeking Out Growth in China


Ascentage
Ascentage Pharma (亚盛医药) IPO: Too Early for an IPO


Ant Financial
Ant Financial IPO Early Thought: Understand Fintech Empire, Growth &amp; Risk Factors


CIMC Veh
CIMC Vehicle (中集车辆): Market Leader of Semi-Trailers but Little Growth Ahead


ByteDance
ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1)


ByteDance
ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2)


East Edu
China East Education (中国东方教育) Pre-IPO - The Company Known for Its Culinary School


China Tobac
China Tobacco International (IPO): The Monopolist Will Not Recover


China Tobac
China Tobacco Intl (HK) IPO: Proxy For the Chinese Cigarette Consumption


ESR
ESR Cayman Pre-IPO - A Giant in the Making


ESR
ESR Cayman Pre-IPO - Earnings and Segment Analysis 


ESR
ESR Cayman Pre-IPO- First Stab at Valuation


Frontage
Frontage (方达控股) IPO: More Disclosure Needed to Understand Moat and Growth Prospect


Frontage
Frontage (方达控股) IPO: Updates from 2018 Numbers


Hujiang Edu
Hujiang Education (沪江教育) Pre-IPO - Spending More than It Earns


Jinxin
Jinxin Fertility (锦欣生殖) Pre-IPO: Strong Foothold in Sichuan but Weak Sentiment for Sector


MicuRx
MicuRx Pharma (盟科医药) IPO: Betting on Single Drug in the Not so Attractive Antibiotic Segment


MabPharm
MabPharma (迈博医药) IPO: Assembled for a Trade?


MabPharm
MabPharm (迈博医药) IPO: Thoughts on Valuation (Part 2)


SH Henlius
Shanghai Henlius (复宏汉霖) IPO: Not an Impressive Biosimilar Portfolio 


Tubatu
Tubatu Group Pre-IPO - Performing Better than Qeeka but Growing Much Slower, US$1bn a Stretch


Tubatu
Tubatu Group Pre-IPO - Online -&gt; Online + Offline -&gt; Online -&gt; ?


Viva Bio
Viva Biotech (维亚生物) IPO: When CRO Becomes Early Stage Biotech Investor


Viva Bio
Viva Biotech (维亚生物) IPO: Warning Signs from 2018 Numbers (Part 2)

South Korea

KMH Shilla
KMH Shilla Leisure IPO Preview (Part 1) - Highly Profitable Operator of Public Golf Courses in Korea


KMH Shilla
KMH Shilla Leisure IPO Preview (Part 2) - Valuation Analysis


Plakor
Plakor IPO Preview (Part 1)


Zinus
Zinus IPO Preview (Part 1) - An Amazing Comeback Story (#1 Mattress Brand on Amazon)

India

Anmol Ind
Anmol Industries Pre-IPO Quick Take - No Growth, Generous Payments to Founders


Bharat Hotels
Bharat Hotels Pre-IPO - Catching up with Peers 


CMS Info
CMS Info Systems Pre-IPO - When a PE Sells to Another PE... Only One Gets the Timing Right


Crystal Crop
Crystal Crop Protection Pre-IPO - DRHP Raises More Questions than in Answers


Flemingo 
Flemingo Travel Retail Pre-IPO - Its a Different Business in Every Country


NSE
NSE IPO Preview- Not Only Fast..its Risky and Expensive


NSE
National Stock Exchange Pre-IPO Review - Bigger, Better, Stronger but a Little Too Fast for Some


Mazagon
Mazagon Dock IPO Preview: A Monopoly Submarine Yard in India with Captive Navy Spending


Mrs. Bector
Mrs. Bectors Food Specialities Pre-IPO Quick Take - Sales for Its Main Segment Have Been Sta


Lodha
Lodha Developers Pre-IPO - Second Time Lucky but Not Really that Much Affordable


Lodha
Lodha Developers IPO: Presence in Affordable Segment Saves Lodha the Blushes in a Sluggish Mkt


IndiaMart
IndiaMART Pre-IPO - Getting and Retaining Subscribers Seems to Be Difficult


PNB Met
PNB Metlife Pre-IPO Quick Take - Doesn't Stack up Well Versus Its Larger Peers

Malaysia

QSR
QSR Brands Pre-IPO - As Healthy as Fast Food


LeongHup
Leong Hup Pre-IPO - Hard to Pinpoint What's Going to Be the Revenue Driver Going Forward

The U.S

Yunji
Yunji (云集) Pre-IPO Review - Poor Disclosure on Data



ECM Weekly (18 April 2019) - Duiba Group, MabPharm, Huami, Cofco Meat, Innovent, Times China

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

When I wrote <a href="https://www.smartkarma.com/insights/japan-post-insurance-placement-bidding-time" target="_blank" data-smartkarma-citation="insights:29165">Japan Post Insurance Placement - Bidding Time</a> last Friday, the shares had fallen ~7% in three days to ¥2585/share and it was "bidding time" for international accounts. The point was that one should bid in absolute terms but that there was a vested interest to see the shares lower on Monday. The shares ended 4.3% lower on Monday, which was the first day of the pricing period (which is when deals normally price in Japan), at ¥2585. This was done in very big volume and the closing 5-minute period at 300,000 shares was almost 1x ADV by itself. After the close, the deal was <a href="https://pdf.irpocket.com/C7181/v5Ys/PDQL/jtiq.pdf" target="_blank">priced</a> at ¥2375, which while down only 2.4% from the undisturbed price, was 9.3% accretive vs the undisturbed price when you take into account the large buyback. That will show up in EPS, and a decent chunk of it will likely show up in DPS.  The first major index inclusion event comes today. There are things to think about. The other major near-term index inclusion treatment may get announced tomorrow.Meanwhile, it is worth looking at JPI itself.

When I wrote Japan Post Insurance Placement - Bidding Time last Friday, the shares had fallen ~7% in three days to ¥2585/share and it was "bidding time" for international accounts. The point was that one should bid in absolute terms but that there was a vested interest to see the shares lower on Monday. The shares ended 4.3% lower on Monday, which was the first day of the pricing period (which is when deals normally price in Japan), at ¥2585. This was done in very big volume and the closing 5-minute period at 300,000 shares was almost 1x ADV by itself. After the close, the deal was priced at ¥2375, which while down only 2.4% from the undisturbed price, was 9.3% accretive vs the undisturbed price when you take into account the large buyback. That will show up in EPS, and a decent chunk of it will likely show up in DPS.  The first major index inclusion event comes today. There are things to think about. The other major near-term index inclusion treatment may get announced tomorrow.Meanwhile, it is worth looking at JPI itself. 

Japan Post Insurance: The First Index Inclusion

Japan

Japan Post Insurance Co. Ltd. operates life insurance business. The Company offers whole life insurance, education endowment, ordinary endowment, medical insurance, and special endowment insurance. Japan Post Insurance provides services for individuals and businesses throughout Japan.

Price Gauge
52-week Range	0.00 - 0.00
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Japan Post Insurance (7181 JP)

🇯🇵 JAPAN • Market Update - Levitating on Thin Air

MOVING AVERAGE BREAKOUT - Japanese equities have now risen by 5.1% since the low of 4th June and, since July 1st, the Total Market Value has...

Campbell Gunn

Japan Post Holdings and Japan Post Bank - Might Be Time to Switch - Part II

The Japanese government's plans to selldown US$12bn worth of Japan Post Holdings (6178 JP), in relation to which, in my Apr 2019 insight, Japan...

Sumeet Singh

Japan Post Holdings and Japan Post Bank - Might Be Time to Switch - Part I

The Japanese government's plans to sell down US$12bn worth of Japan Post Holdings (6178 JP) seem to be progressing well. Banks have been appointed...

Sumeet Singh

ECM Weekly (18 April 2019) - Duiba Group, MabPharm, Huami, Cofco Meat, Innovent, Times China

Aequitas Research puts out a weekly update on the deals that have been covered by Smartkarma Insight Providers recently, along with updates for...

Zhen Zhou, Toh

Japan Post Insurance: The First Index Inclusion

When I wrote Japan Post Insurance Placement - Bidding Time last Friday, the shares had fallen ~7% in three days to ¥2585/share and it was "bidding...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

🇯🇵 JAPAN • Market Update - Levitating on Thin Air

MOVING AVERAGE BREAKOUT - Japanese equities have now risen by 5.1% since the low of 4th June and, since July 1st, the Total Market Value has...

Campbell Gunn

Japan Post Holdings and Japan Post Bank - Might Be Time to Switch - Part II

The Japanese government's plans to selldown US$12bn worth of Japan Post Holdings (6178 JP), in relation to which, in my Apr 2019 insight, Japan...

Sumeet Singh

Japan Post Holdings and Japan Post Bank - Might Be Time to Switch - Part I

The Japanese government's plans to sell down US$12bn worth of Japan Post Holdings (6178 JP) ​seem to be progressing well. Banks have been appointed...

Sumeet Singh

ECM Weekly (18 April 2019) - Duiba Group, MabPharm, Huami, Cofco Meat, Innovent, Times China

Aequitas Research puts out a weekly update on the deals that have been covered by Smartkarma Insight Providers recently, along with updates for...

Zhen Zhou, Toh

Japan Post Insurance: The First Index Inclusion

When I wrote Japan Post Insurance Placement - Bidding Time last Friday, the shares had fallen ~7% in three days to ¥2585/share and it was "bidding...

Travis Lundy

The Japanese government's plans to sell down US$12bn worth of Japan Post Holdings (6178 JP) seem to be progressing well. Banks have been appointed...