Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>Some low liquidity stocks in the TOPIX Index carry a liquidity factor of 0.75x resulting in their actual index weights being smaller than their default weights.</li>
<li>These names are reviewed every April and if the liquidity factor of a stock gets removed, the stock will enjoy buying flows from passive trackers of TOPIX.</li>
<li>In this insight, we take a look at Quiddity's final predictions for the names that are likely to see their Liquidity Factors removed in April 2023.</li>
</ul>


Some low liquidity stocks in the TOPIX Index carry a liquidity factor of 0.75x resulting in their actual index weights being smaller than their default weights.
These names are reviewed every April and if the liquidity factor of a stock gets removed, the stock will enjoy buying flows from passive trackers of TOPIX.
In this insight, we take a look at Quiddity's final predictions for the names that are likely to see their Liquidity Factors removed in April 2023.


TOPIX Index Upweights: Final Predictions for The "The Big April Basket” 2023

Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Post FY23 results in mid-February, Appier's stock exhibited significant volatility, despite robust financial performance.</li>
<li>We believe that Appier is a beneficiary of continued growth in ecommerce and increasing ubiquity of AI solutions for marketing.  </li>
<li>Appier trades at a significant discount to global peers and domestic SaaS companies, suggesting significant upside</li>
</ul>


Post FY23 results in mid-February, Appier's stock exhibited significant volatility, despite robust financial performance.
We believe that Appier is a beneficiary of continued growth in ecommerce and increasing ubiquity of AI solutions for marketing.  
Appier trades at a significant discount to global peers and domestic SaaS companies, suggesting significant upside


Appier (4180) | A Volatile Stock Despite Solid SaaS Metrics

<ul>
<li>Appier's Q3 demonstrated a 39% YoY revenue increase, reaching a record JPY7.1B. This was driven by substantial growth in the US/EMEA markets (117% YoY), customer expansion, and Digital Content growth.</li>
<li>Appier's gross margin expanded from 51.3% to 52.6% and the operating margin reached a historical high of 4.4%. Despite ongoing investments, EBITDA margins hit12.1%, showcasing strong operating leverage.</li>
<li>Appier's revised full-year outlook, with increased revenue target (JPY 26.2B), operating income (JPY0.70B), and EBITDA (JPY2.6B), exceeds consensus expectations by 1%, 11%, and 8%, respectively.</li>
</ul>


Appier's Q3 demonstrated a 39% YoY revenue increase, reaching a record JPY7.1B. This was driven by substantial growth in the US/EMEA markets (117% YoY), customer expansion, and Digital Content growth.
Appier's gross margin expanded from 51.3% to 52.6% and the operating margin reached a historical high of 4.4%. Despite ongoing investments, EBITDA margins hit12.1%, showcasing strong operating leverage.
Appier's revised full-year outlook, with increased revenue target (JPY 26.2B), operating income (JPY0.70B), and EBITDA (JPY2.6B), exceeds consensus expectations by 1%, 11%, and 8%, respectively.


Appier (4180) | Key Drivers Behind Strong Q3 Performance

<ul>
<li>Appier's stock initially surged 20% following strong Q2 results but later declined 25%, influenced by small-cap stock volatility, AI-induced valuations, and e-commerce sensitivity.</li>
<li>The AI company's competitive position remains strong compared to Braze; the differing stock price performance and valuation suggests significant upside.</li>
<li>Appier's thesis remains intact and we expect the company to benefit from key trends in consumer marketing, first-party data and AI solutions.</li>
</ul>


Appier's stock initially surged 20% following strong Q2 results but later declined 25%, influenced by small-cap stock volatility, AI-induced valuations, and e-commerce sensitivity.
The AI company's competitive position remains strong compared to Braze; the differing stock price performance and valuation suggests significant upside.
Appier's thesis remains intact and we expect the company to benefit from key trends in consumer marketing, first-party data and AI solutions.


<ul>
<li>Strong Q2 results with revenue +42% yoy versus +33% in Q1</li>
<li>Gross margin expansion to 51.3% on improving AI algorithm performance</li>
<li>Stock down around 20% over past couple of months, No change to bullish growth forecasts.</li>
</ul>


Strong Q2 results with revenue +42% yoy versus +33% in Q1
Gross margin expansion to 51.3% on improving AI algorithm performance
Stock down around 20% over past couple of months, No change to bullish growth forecasts.


Japan

Appier Group, Inc. provides artificial intelligence software as a service (AISaaS) services based on data-driven decisions. The Company offers data analysis for potential users predicting and acquiring, relationships building and maintaining, purchasing and action motivation, audience intelligence, and more. Appier Group serves clients across Asian.

Appier Group (4180 JP)

TOPIX Index Upweights: Final Predictions for The "The Big April Basket” 2023

This insight (from Feb 2023) discusses the annual TOPIX Liquidity Factor (LF) removal event (which we call the "Big April Basket"). It might be a...

Janaghan Jeyakumar, CFA

Appier (4180) | A Volatile Stock Despite Solid SaaS Metrics

Appier's stock shows volatility post FY23 results despite strong financials, benefiting from ecommerce growth and AI marketing solutions. Trading...

Mark Chadwick

Appier (4180) | Key Drivers Behind Strong Q3 Performance

Appier's Q3 revenue increased by 39% YoY, driven by growth in the US/EMEA markets and customer expansion. Gross margin expanded and operating...

Mark Chadwick

Appier (4180) | The Ups and Downs

Appier's stock has declined due to small-cap stock volatility and AI-induced valuations, despite its strong competitive position and potential...

Mark Chadwick

Appier (4180) | Be Happier

Strong Q2 results with revenue +42% yoy versus +33% in Q1, Revenue accelerates on strong e-commerce, digital marketing. Stock has pulled back to...

Mark Chadwick

TOPIX Index Upweights: Final Predictions for The "The Big April Basket” 2023

This insight (from Feb 2023) discusses the annual TOPIX Liquidity Factor (LF) removal event (which we call the "Big April Basket"). It might be a...

Janaghan Jeyakumar, CFA

Appier (4180) | A Volatile Stock Despite Solid SaaS Metrics

​Appier's stock shows volatility post FY23 results despite strong financials, benefiting from ecommerce growth and AI marketing solutions. Trading...

Mark Chadwick

Appier (4180) | Key Drivers Behind Strong Q3 Performance

​Appier's Q3 revenue increased by 39% YoY, driven by growth in the US/EMEA markets and customer expansion. Gross margin expanded and operating...

Mark Chadwick

Appier (4180) | The Ups and Downs

​Appier's stock has declined due to small-cap stock volatility and AI-induced valuations, despite its strong competitive position and potential...

Mark Chadwick

Appier (4180) | Be Happier

Strong Q2 results with revenue +42% yoy versus +33% in Q1, Revenue accelerates on strong e-commerce, digital marketing. Stock has pulled back to...

Mark Chadwick

Appier's stock shows volatility post FY23 results despite strong financials, benefiting from ecommerce growth and AI marketing solutions. Trading...

Appier's Q3 revenue increased by 39% YoY, driven by growth in the US/EMEA markets and customer expansion. Gross margin expanded and operating...

Appier's stock has declined due to small-cap stock volatility and AI-induced valuations, despite its strong competitive position and potential...