Global Materials | Industrials | Commodities

Rahul Jain

Equity Bottom-Up

<ul>
<li>Results: Q1 FY25 revenue rose 12% YoY to ¥191.3bn with operating profit up 22% and net profit up 33%, driven by robust semiconductor and ICT materials growth.</li>
<li>Guidance &amp; Revisions: FY25 guidance lifted to ¥760bn revenue/¥110bn OP; dividend ¥18. Our forecasts rise to PAT ¥70bn (+35%) in FY25, with 30–40% upgrades through FY26–28.</li>
<li>Valuations: At ~13x P/E and ~12x EV/EBITDA, JX trades above domestic miners but below semiconductor materials peers, leaving room for rerating if the advanced materials mix deepens.</li>
</ul>


Results: Q1 FY25 revenue rose 12% YoY to ¥191.3bn with operating profit up 22% and net profit up 33%, driven by robust semiconductor and ICT materials growth.
Guidance &amp; Revisions: FY25 guidance lifted to ¥760bn revenue/¥110bn OP; dividend ¥18. Our forecasts rise to PAT ¥70bn (+35%) in FY25, with 30–40% upgrades through FY26–28.
Valuations: At ~13x P/E and ~12x EV/EBITDA, JX trades above domestic miners but below semiconductor materials peers, leaving room for rerating if the advanced materials mix deepens.


JX Advanced Metals – Q1 FY2025: Strong Beat, Guidance Raised, Valuations Supportive

<ul>
<li>Copper Output Cuts: JX Advanced Metals will reduce electrolytic copper production by ~30kt (~5–8% of capacity) in FY25, with further smelting downscaling by March 2026.</li>
<li>Margins have collapsed as TC/RCs plunged into negative territory (~–$45/t vs $80/t in 2023), amid concentrate shortages and Chinese overcapacity.</li>
<li>Smelting will be retained mainly for rare-metal recovery (tantalum, indium, rhenium), while JX doubles down on semiconductor materials and upstream mineral projects.</li>
</ul>


Copper Output Cuts: JX Advanced Metals will reduce electrolytic copper production by ~30kt (~5–8% of capacity) in FY25, with further smelting downscaling by March 2026.
Margins have collapsed as TC/RCs plunged into negative territory (~–$45/t vs $80/t in 2023), amid concentrate shortages and Chinese overcapacity.
Smelting will be retained mainly for rare-metal recovery (tantalum, indium, rhenium), while JX doubles down on semiconductor materials and upstream mineral projects.


JX Advanced Metals (5016 JP) – Smelting Cuts Reinforce Materials Pivot

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 changes to 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> as part of the September rebalance should be announced in just over 2 weeks. We expect 2 changes at the review.</li>
<li>
<a href="https://www.smartkarma.com/entities/baycurrent-consulting-inc" target="_blank" data-smartkarma-citation="entities:25985:1" rel="noopener">BayCurrent Consulting</a>'s PAF will double, <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing</a>'s CPAF will stay the same, and Sony Financial Group will be deleted from the index following its spinoff from <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/sanrio-co-ltd" target="_blank" data-smartkarma-citation="entities:16476:1" rel="noopener">Sanrio (8136 JP)</a>'s improved liquidity increases the probability of index inclusion, and the stock could be added to the index at the next rebalance if it misses in September.</li>
</ul>


The changes to the Nikkei 225 (NKY INDEX) as part of the September rebalance should be announced in just over 2 weeks. We expect 2 changes at the review.

BayCurrent Consulting's PAF will double, Fast Retailing's CPAF will stay the same, and Sony Financial Group will be deleted from the index following its spinoff from Sony Corp (6758 JP). 

Sanrio (8136 JP)'s improved liquidity increases the probability of index inclusion, and the stock could be added to the index at the next rebalance if it misses in September.


Nikkei 225 Index Rebalance Sep25: Performance of Potential Adds/Deletes & Positioning

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in margin trading positions of JPX stocks as of Aug 8th. The aggregated net margin trading position is USD15,664m.</li>
<li>We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.</li>
<li>We highlight net margin buy/sell changes in Furukawa Electric, Disco, Mitsubishi Heavy Industries, SoftBank, Advantest, Tokyo Electron, Nintendo, IHI, Chugai Pharmaceutical, Toyota Motor, Furukawa Electric, Disco, Mitsubishi Heavy Industries.</li>
</ul>


We analyzed the changes in margin trading positions of JPX stocks as of Aug 8th. The aggregated net margin trading position is USD15,664m.
We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.
We highlight net margin buy/sell changes in Furukawa Electric, Disco, Mitsubishi Heavy Industries, SoftBank, Advantest, Tokyo Electron, Nintendo, IHI, Chugai Pharmaceutical, Toyota Motor, Furukawa Electric, Disco, Mitsubishi Heavy Industries.


JPX Margin Trading Weekly (Aug 8th): Furukawa Electric, Disco, Mitsubishi Heavy Industries, SoftBank

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jx-advanced-metals-corporation" target="_blank" data-smartkarma-citation="entities:44346:1" rel="noopener">JX Advanced Metals (5016 JP)</a> listed in March and did not get Fast Entry to global indices since a large part of the IPO was allotted to domestic retail investors.</li>
<li>
<a href="https://www.smartkarma.com/entities/jx-advanced-metals-corporation" target="_blank" data-smartkarma-citation="entities:44346:1" rel="noopener">JX Advanced Metals (5016 JP)</a> will be added to one global index this month and could be added to the other global index in September.</li>
<li>The stock is trading higher following the better than forecast results announced last week. The index inclusions could take the stock higher in the short-term.</li>
</ul>



JX Advanced Metals (5016 JP) listed in March and did not get Fast Entry to global indices since a large part of the IPO was allotted to domestic retail investors.

JX Advanced Metals (5016 JP) will be added to one global index this month and could be added to the other global index in September.
The stock is trading higher following the better than forecast results announced last week. The index inclusions could take the stock higher in the short-term.


JX Advanced Metals (5016 JP): Passive Buying in the Next 6 Weeks

Japan

JX Advanced Metals Corporation mines and distributes non ferrous metal products. The Company smelts, refines, and markets non ferrous metals such as copper, gold, silver, and more. JX Advanced Metals also sells semiconductor materials, special steel materials, and other products.

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JX Advanced Metals (5016 JP)

JX Advanced Metals – Q1 FY2025: Strong Beat, Guidance Raised, Valuations Supportive

JX Advanced Metals has surged ~60% in the past month, re-rating to ~20× FY25E P/E and ~9× EV/EBITDA, a clear premium to peers. While the rally...

Rahul Jain