Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Fanuc reported a -7% decline in revenue for FY3/24 and 26% decline in operating profit. </li>
<li>The market will be disappointed by guidance for a further fall on the top line and 15% decline in profits as margins hit an all time low</li>
<li>The valuation of 30x EV / EBIT suggests the market was hoping for a turnaround in profits this year. That recovery has now been pushed back</li>
</ul>


Fanuc reported a -7% decline in revenue for FY3/24 and 26% decline in operating profit. 
The market will be disappointed by guidance for a further fall on the top line and 15% decline in profits as margins hit an all time low
The valuation of 30x EV / EBIT suggests the market was hoping for a turnaround in profits this year. That recovery has now been pushed back


Fanuc (6954) | Profitability Problems Persist

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

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/disco-corp" target="_blank" data-smartkarma-citation="entities:15817:1" rel="noopener">DISCO (6146 JP)</a>, <a href="https://www.smartkarma.com/entities/socionext-inc" target="_blank" data-smartkarma-citation="entities:36351:1" rel="noopener">Socionext (6526 JP)</a> and <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO (3092 JP)</a> will replace <a href="https://www.smartkarma.com/entities/takara-holdings-inc" target="_blank" data-smartkarma-citation="entities:11074:1" rel="noopener">Takara Holdings (2531 JP)</a>, <a href="https://www.smartkarma.com/entities/sumitomo-osaka-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:20460:1" rel="noopener">Sumitomo Osaka Cement (5232 JP)</a> and <a href="https://www.smartkarma.com/entities/pacific-metals-co-ltd" target="_blank" data-smartkarma-citation="entities:3439:1" rel="noopener">Pacific Metals (5541 JP)</a> in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a>.</li>
<li>
<a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a>'s PAF will increase from 0.3 to 0.5, and surprisingly there is no PAF adjustment for <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a>. </li>
<li>Passive trackers need to buy between 1-18 days of ADV on the adds while selling between 2.7-28 days of ADV on the deletes. There is a big funding trade too.</li>
</ul>



DISCO (6146 JP), Socionext (6526 JP) and ZOZO (3092 JP) will replace Takara Holdings (2531 JP), Sumitomo Osaka Cement (5232 JP) and Pacific Metals (5541 JP) in the Nikkei 225.

Nitori Holdings (9843 JP)'s PAF will increase from 0.3 to 0.5, and surprisingly there is no PAF adjustment for ZOZO Inc (3092 JP). 
Passive trackers need to buy between 1-18 days of ADV on the adds while selling between 2.7-28 days of ADV on the deletes. There is a big funding trade too.


Nikkei 225 Index Rebalance: DISCO, Socionext, ZOZO In; PacMetals, Sumitomo Osaka, Takara Holding Out

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Precision Tsugami China / Equity Bottom-Up

<ul>
<li>Precision Tsugami China specializes in the production of precision machine tools. Precision Tsugami China is part of the broader Tsugami Corporation, a Japanese company founded in 1923.</li>
<li>The company's dividend yield increased from 4.3% in FY2021 to 8.9% in FY2022 and 10.1% in FY2023. </li>
<li>We found Precision Tsugami China (1651 HK) using Smartkarma's Smart Score Screener system.</li>
</ul>


Precision Tsugami China specializes in the production of precision machine tools. Precision Tsugami China is part of the broader Tsugami Corporation, a Japanese company founded in 1923.
The company's dividend yield increased from 4.3% in FY2021 to 8.9% in FY2022 and 10.1% in FY2023. 
We found Precision Tsugami China (1651 HK) using Smartkarma's Smart Score Screener system.


Asian Dividend Gems: Precision Tsugami China

<ul>
<li>Q3 net sales: ¥197.8 billion, down 10.1% YoY; operating income: ¥40.9 billion, down 22.1%; operating margin: 20.7% (-320bps YoY)</li>
<li>Full-Year guidance revised: Net sales up 1.8% to ¥771.5 billion; operating profit up 8.4% to ¥132.2 billion.</li>
<li>Positive stock reaction post-Q2 report; FY3/25 outlook cautious, especially for the Robot Division given a -30.2% YoY decline in Q4 orders.</li>
</ul>


Q3 net sales: ¥197.8 billion, down 10.1% YoY; operating income: ¥40.9 billion, down 22.1%; operating margin: 20.7% (-320bps YoY)
Full-Year guidance revised: Net sales up 1.8% to ¥771.5 billion; operating profit up 8.4% to ¥132.2 billion.
Positive stock reaction post-Q2 report; FY3/25 outlook cautious, especially for the Robot Division given a -30.2% YoY decline in Q4 orders.


APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC 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.

<ul>
<li>In Oct 23, <a href="https://www.smartkarma.com/entities/doosan-robotics-inc" target="_blank" data-smartkarma-citation="entities:36816:1" rel="noopener">Doosan Robotics (454910 KS)</a> raised around US$318m through its Korean IPO, after pricing the IPO at the top end of the range at KRW26,000/share.</li>
<li>Doosan Robotics (DR) manufactures and sells collaborative robots (Cobots). The firm’s product portfolio primarily includes different series of robot arms as well as its coffee module.</li>
<li>In this note, we will talk about the company’s past performance and future prospects.</li>
</ul>


In Oct 23, Doosan Robotics (454910 KS) raised around US$318m through its Korean IPO, after pricing the IPO at the top end of the range at KRW26,000/share.
Doosan Robotics (DR) manufactures and sells collaborative robots (Cobots). The firm’s product portfolio primarily includes different series of robot arms as well as its coffee module.
In this note, we will talk about the company’s past performance and future prospects.


2024 High Conviction - Doosan Robotics - Levitating

Japan

FANUC CORPORATION manufactures factory automation (FA) systems and equipments, and robots. The Company's products include computerized numerically-controlled (CNC) equipment, servo motors, laser systems, industrial robots, wire-cut electric discharge machines, and CNC drill.  Fanuc participates in a joint venture with General Electric in the FA field.

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Fanuc Corp (6954 JP)

Fanuc (6954) | Profitability Problems Persist

The market will be disappointed by guidance for a further fall on the top line and 15% decline in profits as margins hit an all time low

Mark Chadwick

Nikkei 225 Index Rebalance: DISCO, Socionext, ZOZO In; PacMetals, Sumitomo Osaka, Takara Holding Out

The adds are all up since announcement, led by Zozo. Nitori is up too even though the upweight was knows. Two of the three deletes are lower....

Brian Freitas

Asian Dividend Gems: Precision Tsugami China

Precision Tsugami China specializes in the production of precision machine tools. It has high dividend yields and attractive valuation multiples.

Douglas Kim

Fanuc (6954) | Robot Orders Remain Weak

Q3 net sales and operating income for the company decreased YoY, but full-year guidance revised higher. Expect a positive stock reaction, but...

Mark Chadwick

2024 High Conviction - Doosan Robotics - Levitating

In Oct 23, Doosan Robotics (454910 KS) raised around US$318m through its Korean IPO, after pricing the IPO at the top end of the range at KRW26,000...

Ethan Aw

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52-week Range

Market Cap (USDm)

P/E

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Fanuc (6954) | Profitability Problems Persist

The market will be disappointed by guidance for a further fall on the top line and 15% decline in profits as margins hit an all time low

Mark Chadwick

Nikkei 225 Index Rebalance: DISCO, Socionext, ZOZO In; PacMetals, Sumitomo Osaka, Takara Holding Out

The adds are all up since announcement, led by Zozo. Nitori is up too even though the upweight was knows. Two of the three deletes are lower....

Brian Freitas

Asian Dividend Gems: Precision Tsugami China

Precision Tsugami China specializes in the production of precision machine tools. It has high dividend yields and attractive valuation multiples.

Douglas Kim

Fanuc (6954) | Robot Orders Remain Weak

​Q3 net sales and operating income for the company decreased YoY, but full-year guidance revised higher. Expect a positive stock reaction, but...

Mark Chadwick

2024 High Conviction - Doosan Robotics - Levitating

In Oct 23, Doosan Robotics (454910 KS) raised around US$318m through its Korean IPO, after pricing the IPO at the top end of the range at KRW26,000...

Ethan Aw

Q3 net sales and operating income for the company decreased YoY, but full-year guidance revised higher. Expect a positive stock reaction, but...