Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<ul>
<li>Nine months ago I first wrote on <a href="https://www.smartkarma.com/entities/anycolor-inc" target="_blank" data-smartkarma-citation="entities:36618:1" rel="noopener">Anycolor (5032 JP)</a>. I thought the guidance growth pattern and valuations remarkable. Results handily beat guidance. Now we're in Year 2 of guidance.</li>
<li>After the first full year listed, FY2024 guidance was for +30% in revenue to ¥33bn, and +35% growth in OP. For Q1, reported yesterday, actual results were +51% and +91%.</li>
<li>The stock is popping this AM, but it is still cheap vs growth rates and margins. There are, notably, still "context issues" here. They merit some consideration (and investigation).</li>
</ul>


Nine months ago I first wrote on Anycolor (5032 JP). I thought the guidance growth pattern and valuations remarkable. Results handily beat guidance. Now we're in Year 2 of guidance.
After the first full year listed, FY2024 guidance was for +30% in revenue to ¥33bn, and +35% growth in OP. For Q1, reported yesterday, actual results were +51% and +91%.
The stock is popping this AM, but it is still cheap vs growth rates and margins. There are, notably, still "context issues" here. They merit some consideration (and investigation).


Anycolor (5032) - Great Quarter Guys! Again. Context Issues. Still.

Event-Driven

<ul>
<li>In the two weeks since the announcement, Large ADDs (&gt;2d ADV, &gt;$5mm) have outperformed Large DELs by 1.3%. Smaller ADDs vs DELs (&gt;2d, &gt;$2&lt;$5mm) have outperformed by 1.3%.</li>
<li>Using only &gt;$20mm &gt;2d DELs vs Top 5 $amt &gt;2d ADDs, that's a bit better than 1%. And the really obvious large ones? Not so obvious.</li>
<li>There is still a large reverse funding trade, with some large sells. </li>
</ul>


In the two weeks since the announcement, Large ADDs (&gt;2d ADV, &gt;$5mm) have outperformed Large DELs by 1.3%. Smaller ADDs vs DELs (&gt;2d, &gt;$2&lt;$5mm) have outperformed by 1.3%.
Using only &gt;$20mm &gt;2d DELs vs Top 5 $amt &gt;2d ADDs, that's a bit better than 1%. And the really obvious large ones? Not so obvious.
There is still a large reverse funding trade, with some large sells. 


July TOPIX FFW Rebal - Update With 2 Days To Go on $3bn a Side

David Blennerhassett

<ul>
<li>According to Invest Chosun, <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> plans to submit a merger registration statement to the KRX in July, with Mirae Asset Securities acting as the lead underwriter.</li>
<li>
<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> investors are in a conundrum. The stock is doing well. With one quarter to go, the company just raised its full-year EPS target by 8.3%.</li>
<li>
<a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon (7751 JP)</a>'s most recent buyback should be done now-ish. They have been ~15-20% of volume over the past month. The Trade would be short Canon vs <a href="https://www.smartkarma.com/entities/ricoh-company-ltd" target="_blank" data-smartkarma-citation="entities:15359:1" rel="noopener">Ricoh (7752 JP)</a>.</li>
</ul>


According to Invest Chosun, Celltrion Inc (068270 KS) plans to submit a merger registration statement to the KRX in July, with Mirae Asset Securities acting as the lead underwriter.

Fast Retailing (9983 JP) investors are in a conundrum. The stock is doing well. With one quarter to go, the company just raised its full-year EPS target by 8.3%.

Canon (7751 JP)'s most recent buyback should be done now-ish. They have been ~15-20% of volume over the past month. The Trade would be short Canon vs Ricoh (7752 JP).


Last Week in Event SPACE: Celltrion, Fast Retailing, Canon, Costa, Chindata

<ul>
<li>Last Friday, the FFW changes for the TOPIX July Free Float Weight Review were announced. There have also been other recent announcements creating flows on 30 July.</li>
<li>Some of these other recent announcements represent a possible change in ad hoc methodology.</li>
<li>Total Flow for 30 July is ~$3.3bn a side driven by selling flows (3/4 of the buy flows are reverse funding). $2.1bn of selling is &gt; 3 days ADV.</li>
</ul>


Last Friday, the FFW changes for the TOPIX July Free Float Weight Review were announced. There have also been other recent announcements creating flows on 30 July.
Some of these other recent announcements represent a possible change in ad hoc methodology.
Total Flow for 30 July is ~$3.3bn a side driven by selling flows (3/4 of the buy flows are reverse funding). $2.1bn of selling is &gt; 3 days ADV.


July TOPIX FFW Rebal - Bigger Than Expected

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

<ul>
<li>Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.</li>
<li>
<a href="https://www.smartkarma.com/entities/anycolor-inc" target="_blank" data-smartkarma-citation="entities:36618:1" rel="noopener">Anycolor (5032 JP)</a> and <a href="https://www.smartkarma.com/entities/lifedrink-co-inc" target="_blank" data-smartkarma-citation="entities:39842:1" rel="noopener">Lifedrink (2585 JP)</a> have already confirmed their moves to the Prime Market and are expected to have TOPIX Inclusion Events at the end of July 2023.</li>
<li>More recently, <a href="https://www.smartkarma.com/entities/plus-alpha-consulting-co-ltd" target="_blank" data-smartkarma-citation="entities:33441:1" rel="noopener">Plus Alpha Consulting (4071 JP)</a> announced their move to the Prime Market and are likely to have a TOPIX Inclusion Event at the end of August 2023.</li>
</ul>


Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.

Anycolor (5032 JP) and Lifedrink (2585 JP) have already confirmed their moves to the Prime Market and are expected to have TOPIX Inclusion Events at the end of July 2023.
More recently, Plus Alpha Consulting (4071 JP) announced their move to the Prime Market and are likely to have a TOPIX Inclusion Event at the end of August 2023.


TOPIX Inclusions: Who Is Ready (Jul 2023)

Japan

Anycolor Inc. operates animation production businesses. The Company produces anime and other products. Anycolor conducts businesses in Japan.

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Anycolor (5032 JP)

Anycolor (5032) - Great Quarter Guys! Again. Context Issues. Still.

Anycolor had another great quarter. Revenues flying, OP up 90%yoy. Net Profit up. OPMs and NPMs at a record. And still limited coverage and take-up...

Travis Lundy

July TOPIX FFW Rebal - Update With 2 Days To Go on $3bn a Side

The TOPIX July FFW rebalance has gone "right way" so far. But it hasn't been huge, and it has been a better basket trade than single stock trade.

Travis Lundy

Last Week in Event SPACE: Celltrion, Fast Retailing, Canon, Costa, Chindata

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

July TOPIX FFW Rebal - Bigger Than Expected

The TOPIX July FFW Review is more interesting than it would appear at first glance. There are some trades to do too. Watch Rakuten, Nippon Paint,...

Travis Lundy

TOPIX Inclusions: Who Is Ready (Jul 2023)

There could be 11 days of volume to buy in Plus Alpha Consulting at the end of August but the secondary offering could create a large overhang...

Janaghan Jeyakumar, CFA

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