Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Quantitative Analysis

Long-time Japan strategist Jonathan Allum, most recently of SMBC Nikko, put a guest post titled <a href="https://www.ft.com/content/a97cf336-518d-45dd-8092-ec0363c18725" target="_blank" rel="noopener">Takeaways from 30 years of Covering the Japanese Market</a> in the Financial Times on 26 November (Thanksgiving) which is well worth a read.He points out that foreign investors in 2020 are likely going to be net dis-investors in Japan for the fourth year in five, fifth year in six, and increasing the net selldown which has occurred since the monster year in 2013. <section class="figure"><section class="figure"><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/174/956/original/Screenshot%202020-11-29%20at%203.07.23%20PM.png?1606633655" class="editor-image img-responsive" data-smartkarma-image-id="174956"></figure></section>This data is compiled from the weekly data which shows each investor category. On a net basis across all investor categories, it will be flat because while it shows buybacks on market, crediting the "Business Corporations" category, it does not show the data of investors selling into Tender Offers or the data of investors buying from IPOs.</section>Of course, the data is not that clean because investing doesn't always happen according to calendar year decisions. 
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/174/969/original/Screenshot%202020-11-29%20at%203.40.57%20PM.png?1606635676" class="editor-image img-responsive" data-smartkarma-image-id="174969"></figure></section>It just so happens that the last two really big selloffs in dollar terms (both exceeding ¥6trln on a rolling 52wk basis) did not happen to see start and end points coincide with those of the Gregorian calendar.
There has been an interesting confluence of "lack of participation in the market" this year. After lifting ETF buys in March 2020, the BOJ has slowed down its ETF buying considerably in the past six months (the current 6-month total is near the lower end of the range seen in the past four years), buybacks are down this year as companies slowed their activity in the face of covid-19-induced uncertainty, and foreigners are net sellers. 
Of course Japanese insurers are on the verge of extending what will be a 12-year streak of net sells to a 13th year, and it looks like Japanese banks will be extending their net selling to a 14th year in a row. Trust Banks will be net buyers for the sixth year in seven this year, but for at least the fourth year in a row it will be less than the net buying of ETFs by the BOJ so ex-BOJ trust banks will have been net sellers for several years. 
Business corporations are up ¥1.335trln year-to-date through the 20th of November, and will almost certainly extend their streak to ten years on the buy side. The interesting net flow this year is the "Proprietary" flow at brokers. This is now positive for ten years in a row, and there are particular reasons for this, as discussed below.
Because of the noise around recent articles about the BOJ and foreign activity, I decided to once again dust off the long-term analytics on Japan investor class flows, and present them here. Because flows net off to close to zero (i.e. there are a certain number of shares, and if some investor class is a net seller, other investor classes must be net buyer(s)), deriving a model for behavior is useful.  Long ago, in roles in fixed income and equity derivatives strategy, I built models of net foreign buying, and they uniformly showed that foreign investors chase/push/drive performance. My final model is a multi-input model which provides a simple combination of two factors they chase.
This insight discusses those behavior models, investor class flow dynamics, cycles, and trends and pressures near-term.
The combination of the investor class flows, and the model which drives net foreign activity, is interesting. I think it helps because the top-down aspect matters for understanding allocation flow.
Read on for the nitty gritty (as usual, we start with Conclusions First).</section>

Long-time Japan strategist Jonathan Allum, most recently of SMBC Nikko, put a guest post titled Takeaways from 30 years of Covering the Japanese Market in the Financial Times on 26 November (Thanksgiving) which is well worth a read.He points out that foreign investors in 2020 are likely going to be net dis-investors in Japan for the fourth year in five, fifth year in six, and increasing the net selldown which has occurred since the monster year in 2013. This data is compiled from the weekly data which shows each investor category. On a net basis across all investor categories, it will be flat because while it shows buybacks on market, crediting the "Business Corporations" category, it does not show the data of investors selling into Tender Offers or the data of investors buying from IPOs.Of course, the data is not that clean because investing doesn't always happen according to calendar year decisions. 
It just so happens that the last two really big selloffs in dollar terms (both exceeding ¥6trln on a rolling 52wk basis) did not happen to see start and end points coincide with those of the Gregorian calendar.
There has been an interesting confluence of "lack of participation in the market" this year. After lifting ETF buys in March 2020, the BOJ has slowed down its ETF buying considerably in the past six months (the current 6-month total is near the lower end of the range seen in the past four years), buybacks are down this year as companies slowed their activity in the face of covid-19-induced uncertainty, and foreigners are net sellers. 
Of course Japanese insurers are on the verge of extending what will be a 12-year streak of net sells to a 13th year, and it looks like Japanese banks will be extending their net selling to a 14th year in a row. Trust Banks will be net buyers for the sixth year in seven this year, but for at least the fourth year in a row it will be less than the net buying of ETFs by the BOJ so ex-BOJ trust banks will have been net sellers for several years. 
Business corporations are up ¥1.335trln year-to-date through the 20th of November, and will almost certainly extend their streak to ten years on the buy side. The interesting net flow this year is the "Proprietary" flow at brokers. This is now positive for ten years in a row, and there are particular reasons for this, as discussed below.
Because of the noise around recent articles about the BOJ and foreign activity, I decided to once again dust off the long-term analytics on Japan investor class flows, and present them here. Because flows net off to close to zero (i.e. there are a certain number of shares, and if some investor class is a net seller, other investor classes must be net buyer(s)), deriving a model for behavior is useful.  Long ago, in roles in fixed income and equity derivatives strategy, I built models of net foreign buying, and they uniformly showed that foreign investors chase/push/drive performance. My final model is a multi-input model which provides a simple combination of two factors they chase.
This insight discusses those behavior models, investor class flow dynamics, cycles, and trends and pressures near-term.
The combination of the investor class flows, and the model which drives net foreign activity, is interesting. I think it helps because the top-down aspect matters for understanding allocation flow.
Read on for the nitty gritty (as usual, we start with Conclusions First).

JAPAN FLOW:  Foreign Investor Flows Still Matter (Redux, Reduxed) - Playing Catchup

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 Capital Markets

Raksul (ラクスル) can be read in Japanese as "to make easy", and within the printing and delivery markets, that is precisely what the company aims to do. Raksul's main business is an EC site that connects small lot printing customers with SME print shops. In addition, as the company's customers include a large number of SMEs, additional marketing services such as advertising through the distribution of flyers are offered. Finally, the company also offers an EC service for package delivery, once again targeting SMEs owning less than twenty trucks, as suppliers.<div class="content-caption">Basic Information</div><table class="table table-striped"><tbody><tr><td>Company Name</td><td>Raksul Inc.</td></tr><tr><td>Company Ticker</td><td>4382</td></tr><tr><td>Stock Exchange</td><td>TSE Mothers Section</td></tr><tr><td>Business Description</td><td>Discount net printing and delivery</td></tr><tr><td>Unit Size</td><td>100</td></tr><tr><td>New Shares Offered</td><td>2,500,000</td></tr><tr><td>Existing Shares Offered</td><td>8,449,900</td></tr><tr><td>Overallotment (Existing Shares)</td><td>1,642,100</td></tr><tr><td>Total Shares Offered</td><td>12,592,000</td></tr><tr><td>Tentative Price</td><td>1,300-1,500</td></tr><tr><td>Estimated Capital to be Raised (JPY)</td><td>3,500,000,000</td></tr><tr><td>Pricing Date</td><td>23rd May</td></tr><tr><td>Bookbuilding</td><td>16th May -  22nd May</td></tr><tr><td>Application Dates</td><td>24th May - 29th May</td></tr><tr><td>Listing Date</td><td>31st May</td></tr><tr><td>Shares Outstanding at Listing</td><td>29,349,800</td></tr><tr><td>Estimated Market Capitalisation (JPY)</td><td>41,089,000,000</td></tr></tbody></table><div style="text-align: left;" class="content-caption">Source: Company Disclosures, LightStream Research</div><div class="content-caption">Underwriters</div><table class="table table-striped"><tbody><tr><td>　</td><td>Broker</td></tr><tr><td rowspan="3">Lead Underwriters</td><td>Daiwa Securities</td></tr><tr><td>MUFG Morgan Stanley  Securities</td></tr><tr><td>Mizuho Securities</td></tr><tr><td rowspan="4">Underwriters</td><td>SBI Securities</td></tr><tr><td>SMBC Nikko Securities</td></tr><tr><td>Monex Securities</td></tr><tr><td>Kabu.com Securities</td></tr></tbody></table><div style="text-align: left;" class="content-caption">Source: Company Disclosures, LightStream Research</div>

Raksul (ラクスル) can be read in Japanese as "to make easy", and within the printing and delivery markets, that is precisely what the company aims to do. Raksul's main business is an EC site that connects small lot printing customers with SME print shops. In addition, as the company's customers include a large number of SMEs, additional marketing services such as advertising through the distribution of flyers are offered. Finally, the company also offers an EC service for package delivery, once again targeting SMEs owning less than twenty trucks, as suppliers.Basic InformationCompany NameRaksul Inc.Company Ticker4382Stock ExchangeTSE Mothers SectionBusiness DescriptionDiscount net printing and deliveryUnit Size100New Shares Offered2,500,000Existing Shares Offered8,449,900Overallotment (Existing Shares)1,642,100Total Shares Offered12,592,000Tentative Price1,300-1,500Estimated Capital to be Raised (JPY)3,500,000,000Pricing Date23rd MayBookbuilding16th May -  22nd MayApplication Dates24th May - 29th MayListing Date31st MayShares Outstanding at Listing29,349,800Estimated Market Capitalisation (JPY)41,089,000,000Source: Company Disclosures, LightStream ResearchUnderwriters　BrokerLead UnderwritersDaiwa SecuritiesMUFG Morgan Stanley  SecuritiesMizuho SecuritiesUnderwritersSBI SecuritiesSMBC Nikko SecuritiesMonex SecuritiesKabu.com SecuritiesSource: Company Disclosures, LightStream Research

Raksul IPO: Under the Radar, Shouldn't Be, but Too Expensive to Get Excited Immediately

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

<a href="https://www.smartkarma.com/entities/24216" target="_blank" data-smartkarma-citation="entities:24216:1">HIMS Co., Ltd (238490 KS)</a> is very similar in many ways as <a href="https://www.smartkarma.com/entities/24202" target="_blank" data-smartkarma-citation="entities:24202:1">V-One Tech Co., Ltd (251630 KS)</a>. That is, like V-One Tech, HIMS is also specialized in machine vision for OLED production process. Just, HIMS' machine vision based OLED testing equipment monitors different areas of OLED panels. Already, we are hearing many positive reactions and responses from Korea's local institutions. First and foremost, everyone is kinda being excited by Korea's super OLED rally. Second, they are feeling HIMS' suggested IPO price (₩100bil market cap) is quite cheap. Third, Samsung's own investment arm called "Samsung Ventures - SVIC" is one of the company's early investors. SVIC is still holding 5% shares. Lastly, HIMS is turning profits.Alright, let's find out whether this IPO stock is really worth our attention.

HIMS Co., Ltd (238490 KS) is very similar in many ways as V-One Tech Co., Ltd (251630 KS). That is, like V-One Tech, HIMS is also specialized in machine vision for OLED production process. Just, HIMS' machine vision based OLED testing equipment monitors different areas of OLED panels. Already, we are hearing many positive reactions and responses from Korea's local institutions. First and foremost, everyone is kinda being excited by Korea's super OLED rally. Second, they are feeling HIMS' suggested IPO price (₩100bil market cap) is quite cheap. Third, Samsung's own investment arm called "Samsung Ventures - SVIC" is one of the company's early investors. SVIC is still holding 5% shares. Lastly, HIMS is turning profits.Alright, let's find out whether this IPO stock is really worth our attention.

HIMS IPO Summary - Another Solid OLED Stock IPO

Japan TMT Analyst

Pelham Smithers

Market Intel on Asian Tech with a Japan focus

Pelham Smithers Associates

Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods. 

Research is provided by the following:
Pelham Smithers: Macro, consumer electronics, telecoms & pharma
Joel Scheiman: Electronics materials / components
Julie Boote: Autos
Will Nestuk: Capital goods, machinery & transportation equipment parts
Thao Nguyen: eCommerce, internet content, marketing & advertising

Equity Bottom-Up

It is over a decade since the IBM RFID shopping advert came out (still well worth a watch at <a href="https://www.youtube.com/watch?v=WGuXOuQOe18" target="_blank">https://www.youtube.com/watch?v=WGuXOuQOe18</a>) and this technology is yet to appear on our high streets. Indeed, <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon's</a> solution at its Amazon Go store in Seattle forgoes RFID in favour of LIDAR and camera technology. Still, we may only be months away from an implementation in Japan. Five leading Japanese convenience (CVS) stores (<a href="https://www.smartkarma.com/entities/1041" target="_blank" data-smartkarma-citation="entities:1041:1">Seven &amp; I (3382 JP)</a>, <a href="https://www.smartkarma.com/entities/1043" target="_blank" data-smartkarma-citation="entities:1043:1">Ministop (9946 JP)</a>, <a href="https://www.smartkarma.com/entities/320" target="_blank" data-smartkarma-citation="entities:320:1">Familymart (8028 JP),</a><a href="https://www.smartkarma.com/entities/14271" target="_blank" data-smartkarma-citation="entities:14271:1">East Japan</a>…

It is over a decade since the IBM RFID shopping advert came out (still well worth a watch at https://www.youtube.com/watch?v=WGuXOuQOe18) and this technology is yet to appear on our high streets. Indeed, Amazon's solution at its Amazon Go store in Seattle forgoes RFID in favour of LIDAR and camera technology. Still, we may only be months away from an implementation in Japan. Five leading Japanese convenience (CVS) stores (Seven &amp; I (3382 JP), Ministop (9946 JP), Familymart (8028 JP),East Japan…

Japan Moves Towards RFID Scanning at Checkout

Event-Driven

Three Japanese companies announced ToSTNeT-3 Buybacks after the close of trading today: <ol>
<li><a href="https://www.smartkarma.com/entities/4613" target="_blank" data-smartkarma-citation="entities:4613:1">Nihon Unisys Ltd (8056 JP)</a></li>
<li><a href="https://www.smartkarma.com/entities/19529" target="_blank" data-smartkarma-citation="entities:19529:1">Sekisui Plastics Co Ltd (4228 JP)</a></li>
<li><a href="https://www.smartkarma.com/entities/1222" target="_blank" data-smartkarma-citation="entities:1222:1">Yasuda Logistics Corp (9324 JP)</a></li>
</ol>If you have no cares in these names, please read no further. If you're open-minded on smallcaps, it might be of interest. This is a set of comments on a set of liquidity events, just in case.<table class="table table-striped"><tbody>
<tr>
<td style="text-align: center;">Anncmt Link</td>
<td style="text-align: center;">Ticker</td>
<td style="text-align: center;">Company Name</td>
<td style="text-align: center;">MktCap</td>
<td style="text-align: center;">Shs To  Buy Back</td>
<td style="text-align: center;">% Shs  O/S</td>
<td style="text-align: center;">Price</td>
<td style="text-align: center;">Amount</td>
<td style="text-align: center;">
If Complete,
Resulting TSY Shrs
</td>
</tr>
<tr>
<td style="text-align: center;"><a href="https://www.release.tdnet.info/inbs/140120170222404793.pdf" target="_blank">❖</a></td>
<td>4228</td>
<td>Sekisui Plastics</td>
<td style="text-align: right;">¥39.8bn</td>
<td style="text-align: right;">190,</td>
</tr>
</tbody></table>…

Three Japanese companies announced ToSTNeT-3 Buybacks after the close of trading today: 
Nihon Unisys Ltd (8056 JP)
Sekisui Plastics Co Ltd (4228 JP)
Yasuda Logistics Corp (9324 JP)
If you have no cares in these names, please read no further. If you're open-minded on smallcaps, it might be of interest. This is a set of comments on a set of liquidity events, just in case.

Anncmt Link
Ticker
Company Name
MktCap
Shs To  Buy Back
% Shs  O/S
Price
Amount

If Complete,
Resulting TSY Shrs



❖
4228
Sekisui Plastics
¥39.8bn
190,

…

JAPAN BUYBACKS: ToSTNeT-3 Buybacks for 2/​24/​2017

Japan

DAI NIPPON PRINTING CO., LTD. offers printing services for commercial and industrial use.  The printing items include information media such as books, periodicals, and text books, wrapping paper and containers, stationeries, and advertising medium.  The Company provides design and production services as well.  Dai Nippon Printing also produces soft drinks including Coca Cola.

Price Gauge
52-week Range	0.00 - 0.00
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Dai Nippon Printing (7912 JP)

JAPAN FLOW: Foreign Investor Flows Still Matter (Redux, Reduxed) - Playing Catchup

The Japanese market has unusual flow cyclicality. Foreigners take price. They have been net sellers. They buy when USD-denom TOPIX outperforms....

Travis Lundy

Raksul IPO: Under the Radar, Shouldn't Be, but Too Expensive to Get Excited Immediately

Raksul (ラクスル) can be read in Japanese as "to make easy", and within the printing and delivery markets, that is precisely what the company aims to...

Mio Kato

HIMS IPO Summary - Another Solid OLED Stock IPO

HIMS Co., Ltd (238490 KS) is very similar in many ways as V-One Tech Co., Ltd (251630 KS). That is, like V-One Tech, HIMS is also specialized in...

Sanghyun Park

Japan Moves Towards RFID Scanning at Checkout

It is over a decade since the IBM RFID shopping advert came out (still well worth a watch at https://www.youtube.com/watch?v=WGuXOuQOe18) and this...

Pelham Smithers Associates

JAPAN BUYBACKS: ToSTNeT-3 Buybacks for 2/24/2017

Three Japanese companies announced ToSTNeT-3 Buybacks after the close of trading today: Nihon Unisys Ltd (8056 JP) Sekisui Plastics Co Ltd (4228...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

JAPAN FLOW: Foreign Investor Flows Still Matter (Redux, Reduxed) - Playing Catchup

The Japanese market has unusual flow cyclicality. Foreigners take price. They have been net sellers. They buy when USD-denom TOPIX outperforms....

Travis Lundy

Raksul IPO: Under the Radar, Shouldn't Be, but Too Expensive to Get Excited Immediately

Raksul (ラクスル) can be read in Japanese as "to make easy", and within the printing and delivery markets, that is precisely what the company aims to...

Mio Kato

HIMS IPO Summary - Another Solid OLED Stock IPO

HIMS Co., Ltd (238490 KS) is very similar in many ways as V-One Tech Co., Ltd (251630 KS). That is, like V-One Tech, HIMS is also specialized in...

Sanghyun Park

Japan Moves Towards RFID Scanning at Checkout

It is over a decade since the IBM RFID shopping advert came out (still well worth a watch at https://www.youtube.com/watch?v=WGuXOuQOe18) and this...

Pelham Smithers Associates

JAPAN BUYBACKS: ToSTNeT-3 Buybacks for 2/​24/​2017

Three Japanese companies announced ToSTNeT-3 Buybacks after the close of trading today: Nihon Unisys Ltd (8056 JP) Sekisui Plastics Co Ltd (4228...

Travis Lundy

JAPAN BUYBACKS: ToSTNeT-3 Buybacks for 2/24/2017