Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Fast Retailing delivered an impressive Q3 report. Sales +10% YoY were +3% above our expectations. </li>
<li>Big jump in profitability. OP +31% YoY to Y145b driven by +57% jump in Uniqlo Japan earnings. Record consolidated OPM ~19% </li>
<li>Uniqlo's performance is leaving global peers in its wake. Profitability now rivalling Inditex. However, valuations remain at a premium</li>
</ul>


Fast Retailing delivered an impressive Q3 report. Sales +10% YoY were +3% above our expectations. 
Big jump in profitability. OP +31% YoY to Y145b driven by +57% jump in Uniqlo Japan earnings. Record consolidated OPM ~19% 
Uniqlo's performance is leaving global peers in its wake. Profitability now rivalling Inditex. However, valuations remain at a premium


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>At a time when the LSE has dumbed down the checks and balances for listed companies, now may be the right time to consider collapsing <a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">Rio Tinto (RIO AU)</a>'s DLC.</li>
<li>Re: Sep24 Nikkei 225 Rebal, long <a href="https://www.smartkarma.com/entities/ryohin-keikaku-co-ltd" target="_blank" data-smartkarma-citation="entities:2765:1" rel="noopener">Ryohin Keikaku (7453 JP)</a> vs. <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>, but this may not last. It has worked very well. </li>
<li>Unless we see a significant (and sustainable) reversal in <a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a>'s US/Mexican ops in the interim results, now hardly appears the opportune time for a Smithfield IPO.</li>
</ul>


At a time when the LSE has dumbed down the checks and balances for listed companies, now may be the right time to consider collapsing Rio Tinto (RIO AU)'s DLC.
Re: Sep24 Nikkei 225 Rebal, long Ryohin Keikaku (7453 JP) vs. Fast Retailing (9983 JP), but this may not last. It has worked very well. 
Unless we see a significant (and sustainable) reversal in WH Group (288 HK)'s US/Mexican ops in the interim results, now hardly appears the opportune time for a Smithfield IPO.


Last Week in Event SPACE: Rio Tinto, Ryohin Keikaku/Fast Retailing, WH Group, ThaiBev/F&N, PCCW

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>The review period for 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> September rebalance ended yesterday. There could be three changes at the rebalance with sector balance in focus for the additions.</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>'s capping in the index has been confirmed and its index weight will drop by around 0.9% resulting in big selling at the close on 30 September. </li>
<li>Passive trackers will need to buy between 3.5-35x ADV (2.4%-24% of real float) on the inclusions and sell between 3.7-42.5x ADV on the deletions.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) September rebalance ended yesterday. There could be three changes at the rebalance with sector balance in focus for the additions.

Fast Retailing (9983 JP)'s capping in the index has been confirmed and its index weight will drop by around 0.9% resulting in big selling at the close on 30 September. 
Passive trackers will need to buy between 3.5-35x ADV (2.4%-24% of real float) on the inclusions and sell between 3.7-42.5x ADV on the deletions.


Nikkei 225 Index Rebalance Preview (Sep 2024): Review Period Done; Fast Retailing Capping Confirmed

Travis Lundy

<ul>
<li>The Sep 2024 Nikkei 225 Review base date is here. As before, I see one ADD, one DELETE, one capping, and one Very Dark Horse.</li>
<li>The rules are clear, but not. This causes confusion. There may be unwritten rules keeping the Very Dark Horse out til next time.</li>
<li>The Nikkei Index Team announced <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> would be capped. I didn't expect that now. That means $2.2bn+ of selling 30Sep and a reverse funding trade.</li>
</ul>


The Sep 2024 Nikkei 225 Review base date is here. As before, I see one ADD, one DELETE, one capping, and one Very Dark Horse.
The rules are clear, but not. This causes confusion. There may be unwritten rules keeping the Very Dark Horse out til next time.
The Nikkei Index Team announced Fast Retailing (9983 JP) would be capped. I didn't expect that now. That means $2.2bn+ of selling 30Sep and a reverse funding trade.


Sep24 Nikkei 225 Rebal Final Predictions - Fastie Capped, Still 1 ADD, 1 DELETE, 1 Dark Horse and ?s

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/amer-sports-inc" target="_blank" data-smartkarma-citation="entities:21751:1" rel="noopener">Amer Sports (AS US)</a> raised around US$1.3bn in its US IPO in Feb 2024, after pricing its IPO below its initial range.</li>
<li>Amer Sports is a sports and outdoor brands company making clothing and other sporting equipment for use in snow sports, running, climbing, baseball, american football, tennis and other sports.</li>
<li>In this note, we talk about the upcoming lock-up expiry and deal dynamics.</li>
</ul>



Amer Sports (AS US) raised around US$1.3bn in its US IPO in Feb 2024, after pricing its IPO below its initial range.
Amer Sports is a sports and outdoor brands company making clothing and other sporting equipment for use in snow sports, running, climbing, baseball, american football, tennis and other sports.
In this note, we talk about the upcoming lock-up expiry and deal dynamics.


Amer Sports IPO Lock-Up Expiry - PE Investor Might Look to Trim US$750m Stake

Japan

FAST RETAILING CO., LTD. operates a chain of clothing stores, UNIQLO, throughout Japan and in other markets overseas including UK, China, Hong Kong, South Korea, US, France, Singapore and Russia.  The Company designs, manufactures, and retails its own line of casual clothing.

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Fast Retailing (9983 JP)

Fast Retailing (9983) | Q3 Masterclass

Fast Retailing reported an 8.1% year-on-year increase in domestic same-store sales for UNIQLO in July, marking four consecutive months of growth....

Mark Chadwick

Last Week in Event SPACE: Rio Tinto, Ryohin Keikaku/Fast Retailing, WH Group, ThaiBev/F&N, PCCW

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

Nikkei 225 Index Rebalance Preview (Sep 2024): Review Period Done; Fast Retailing Capping Confirmed

Review period ended yesterday. Fast Retailing's capping will result in a 0.9% drop in index weight. There could be 3 index changes with sector...

Brian Freitas

Sep24 Nikkei 225 Rebal Final Predictions - Fastie Capped, Still 1 ADD, 1 DELETE, 1 Dark Horse and ?s

Nikkei 225 Sep24 Rebal data is done and dusted. I see one automatic DELETE, and one ADD. There is a dark horse possibility to replace that ADD but...

Travis Lundy

Amer Sports IPO Lock-Up Expiry - PE Investor Might Look to Trim US$750m Stake

Amer Sports (AS US) raised around US$1.3bn in its US IPO in Feb 2024, after pricing its IPO below its initial range. Its pre-IPO investors will be...

Sumeet Singh

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