Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>8697 Japan Exchange and retail facing brokers such as Matsui, SBI, and Monex may do better with Cboe +4.3% given the outlook for increased trading amid higher market volatility. </li>
<li>Japanese MedTech firms Terumo, Asahi Intecc, and Olympus underperformed globally. While FX plays a role, lower rates boost elective surgeries, making them prime candidates for a rebound.</li>
<li>NKY225 inclusion candidates 7453 Ryohin Keikaku and 7453 NRI look attractive as oversold longs as Index arbs will no doubt be rushing back as soon as the panic subsides.</li>
</ul>


8697 Japan Exchange and retail facing brokers such as Matsui, SBI, and Monex may do better with Cboe +4.3% given the outlook for increased trading amid higher market volatility. 
Japanese MedTech firms Terumo, Asahi Intecc, and Olympus underperformed globally. While FX plays a role, lower rates boost elective surgeries, making them prime candidates for a rebound.
NKY225 inclusion candidates 7453 Ryohin Keikaku and 7453 NRI look attractive as oversold longs as Index arbs will no doubt be rushing back as soon as the panic subsides.


Japan Morning Connection: 8697 JP, 7453 JP, 7453 JP

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nakanishi-inc" target="_blank" data-smartkarma-citation="entities:20823:1" rel="noopener">Nakanishi Inc (7716 JP)</a> guided for 25% revenue growth to ¥74B for 2024, driven by an additional ¥12B revenue contribution from DCI and 6% growth in dental business to ¥47B.</li>
<li>EBITDA is expected to improve from 2025 due to normalization of the personnel expenses and depreciation. 2026 EBITDA margin (26.8%) will improve significantly over 2024 (23.9%).</li>
<li>Amid slow global consumption, Nakanishi’s cost-effective products offer strong value proposition. The company is expected to meet 2024 guidance and no negative surprise (downward revision in last year) is expected.</li>
</ul>



Nakanishi Inc (7716 JP) guided for 25% revenue growth to ¥74B for 2024, driven by an additional ¥12B revenue contribution from DCI and 6% growth in dental business to ¥47B.
EBITDA is expected to improve from 2025 due to normalization of the personnel expenses and depreciation. 2026 EBITDA margin (26.8%) will improve significantly over 2024 (23.9%).
Amid slow global consumption, Nakanishi’s cost-effective products offer strong value proposition. The company is expected to meet 2024 guidance and no negative surprise (downward revision in last year) is expected.


Nakanishi Inc (7716 JP): Acquisition and Fx to Nourish Topline; Margin Expansion in Near-Term

<ul>
<li>In Q3FY24, <a href="https://www.smartkarma.com/entities/asahi-intecc-co-ltd" target="_blank" data-smartkarma-citation="entities:15915:1" rel="noopener">Asahi Intecc (7747 JP)</a> reported 8% YoY increase in revenue to ¥26B, ahead of estimate of ¥24B, mainly driven by the exchange rate impact of higher foreign currencies.</li>
<li>Higher SG&amp;A expenses impacted the profitability. Q3FY24 operating profit margin declined to 23.3% from 26.6% in Q3FY23, while net profit margin decreased to 16.0% from 18.5% during the same time.</li>
<li>In Q4FY24, revenue is expected to decline 3% YoY to ¥19.6B. Operating and net profits are anticipated to plunge 74% and 26%, YoY to ¥417M and ¥832M, respectively.</li>
</ul>


In Q3FY24, Asahi Intecc (7747 JP) reported 8% YoY increase in revenue to ¥26B, ahead of estimate of ¥24B, mainly driven by the exchange rate impact of higher foreign currencies.
Higher SG&amp;A expenses impacted the profitability. Q3FY24 operating profit margin declined to 23.3% from 26.6% in Q3FY23, while net profit margin decreased to 16.0% from 18.5% during the same time.
In Q4FY24, revenue is expected to decline 3% YoY to ¥19.6B. Operating and net profits are anticipated to plunge 74% and 26%, YoY to ¥417M and ¥832M, respectively.


2024 High Conviction Update: Asahi Intecc (7747 JP)- Q3FY24 Margins Take Hit; Tepid Q4 Expected

Equity Capital Markets

<ul>
<li>In FY25, <a href="https://www.smartkarma.com/entities/nihon-kohden-corp" target="_blank" data-smartkarma-citation="entities:7668:1" rel="noopener">Nihon Kohden (6849 JP)</a> guided for domestic revenue of ¥147B, up 3% YoY. The demand for patient monitors and treatment equipment is expected to remain steady.</li>
<li>Nihon Kohden expects North America business to report a revenue CAGR of 11% (fastest among all the other regions) during FY24–27, outpacing mid-single-digit growth of the market.</li>
<li>The company announced ¥10B buyback plan to repurchase up to 6M shares, representing 3.57% of total number of issued shares from August 5, 2024, to March 31, 2025.</li>
</ul>


In FY25, Nihon Kohden (6849 JP) guided for domestic revenue of ¥147B, up 3% YoY. The demand for patient monitors and treatment equipment is expected to remain steady.
Nihon Kohden expects North America business to report a revenue CAGR of 11% (fastest among all the other regions) during FY24–27, outpacing mid-single-digit growth of the market.
The company announced ¥10B buyback plan to repurchase up to 6M shares, representing 3.57% of total number of issued shares from August 5, 2024, to March 31, 2025.


Nihon Kohden (6849 JP): ¥10B Buyback Plan And Stock Split; Japan and US to Drive Business Growth

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>There are a bunch of stocks that have underperformed the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> and their peers and could be deleted from global passive portfolios in May.</li>
<li>The deletion from passive portfolios will lead to a liquidity event at the end of May where passive trackers will need to sell multiple days of ADV.</li>
<li>Shorts have been built up on all the stocks over the last few months and the extent of the positioning varies across stocks.</li>
</ul>


There are a bunch of stocks that have underperformed the Nikkei 225 (NKY INDEX) and their peers and could be deleted from global passive portfolios in May.
The deletion from passive portfolios will lead to a liquidity event at the end of May where passive trackers will need to sell multiple days of ADV.
Shorts have been built up on all the stocks over the last few months and the extent of the positioning varies across stocks.


Japan - Increase in Shorts & Potential Passive Selling in May

Japan

ASAHI INTECC CO., LTD. manufactures medical tools as well as both medical and industrial-use stainless wire rope.  The Company's main products include catheters, guidewires, and miniature coils for endoscopic devices.

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Asahi Intecc (7747 JP)

Japan Morning Connection: 8697 JP, 7453 JP, 7453 JP

Japanese brokers may benefit from increased trading with Cboe, MedTech firms could rebound, and NKY225 inclusion candidates highlighted as...

Andrew Jackson

Nakanishi Inc (7716 JP): Acquisition and Fx to Nourish Topline; Margin Expansion in Near-Term

Nakanishi guided for 25% YoY revenue growth to ¥74B for 2024, driven by additional ¥12B revenue contribution from DCI and 6% YoY growth in dental...

Tina Banerjee

2024 High Conviction Update: Asahi Intecc (7747 JP)- Q3FY24 Margins Take Hit; Tepid Q4 Expected

Asahi Intecc reports 8% YoY revenue growth in Q3, but higher SG&A expenses dented profitability. Q4FY24 revenue is expected to decline 3% YoY with...

Tina Banerjee

Nihon Kohden (6849 JP): ¥10B Buyback Plan And Stock Split; Japan and US to Drive Business Growth

Nihon Kohden has announced ¥10B buyback plan amid long-term growth prospect. The company guided for 3% and 11% revenue CAGR in Japan and North...

Tina Banerjee

Japan - Increase in Shorts & Potential Passive Selling in May

There are a bunch of stocks in Japan that could be sold by passive global investors in May. Shorts have increased on all stocks and the extent of...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Morning Connection: 8697 JP, 7453 JP, 7453 JP

​Japanese brokers may benefit from increased trading with Cboe, MedTech firms could rebound, and NKY225 inclusion candidates highlighted as...

Andrew Jackson

Nakanishi Inc (7716 JP): Acquisition and Fx to Nourish Topline; Margin Expansion in Near-Term

Nakanishi guided for 25% YoY revenue growth to ¥74B for 2024, driven by additional ¥12B revenue contribution from DCI and 6% YoY growth in dental...

Tina Banerjee

2024 High Conviction Update: Asahi Intecc (7747 JP)- Q3FY24 Margins Take Hit; Tepid Q4 Expected

​Asahi Intecc reports 8% YoY revenue growth in Q3, but higher SG&A expenses dented profitability. Q4FY24 revenue is expected to decline 3% YoY with...

Tina Banerjee

Nihon Kohden (6849 JP): ¥10B Buyback Plan And Stock Split; Japan and US to Drive Business Growth

​Nihon Kohden has announced ¥10B buyback plan amid long-term growth prospect. The company guided for 3% and 11% revenue CAGR in Japan and North...

Tina Banerjee

Japan - Increase in Shorts & Potential Passive Selling in May

There are a bunch of stocks in Japan that could be sold by passive global investors in May. Shorts have increased on all stocks and the extent of...

Brian Freitas

Japanese brokers may benefit from increased trading with Cboe, MedTech firms could rebound, and NKY225 inclusion candidates highlighted as...

Asahi Intecc reports 8% YoY revenue growth in Q3, but higher SG&A expenses dented profitability. Q4FY24 revenue is expected to decline 3% YoY with...

Nihon Kohden has announced ¥10B buyback plan amid long-term growth prospect. The company guided for 3% and 11% revenue CAGR in Japan and North...