Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Every year in April there is an interesting phenomenon with TOPIX. It is what <a href="https://www.smartkarma.com/profiles/janaghan-jeyakumar-cfa" target="_blank" data-smartkarma-citation="accounts:3173" rel="noopener">Janaghan Jeyakumar, CFA</a> calls "The Big April Basket." The TSE re-assesses Liquidity Factor Coefficients.</li>
<li>It also does a FFW change, and this year it has Phased Weight Reductions for those slowly leaving TOPIX and PWR re-inclusions for those identified last October as going back.</li>
<li>Janaghan had 18 "High Conviction" LF removals. All were hits. They are upweights. Then there are 34 changes to FFW coefficients.</li>
</ul>


Every year in April there is an interesting phenomenon with TOPIX. It is what Janaghan Jeyakumar, CFA calls "The Big April Basket." The TSE re-assesses Liquidity Factor Coefficients.
It also does a FFW change, and this year it has Phased Weight Reductions for those slowly leaving TOPIX and PWR re-inclusions for those identified last October as going back.
Janaghan had 18 "High Conviction" LF removals. All were hits. They are upweights. Then there are 34 changes to FFW coefficients.


The TOPIX Big April Basket Flows:  ¥200bn a Side Including Many Multi-ADV Flows

Equity Capital Markets

Kasumigaseki Capital / Equity Capital Markets

<ul>
<li>Kasumigaseki Capital is a small cap consulting real estate speculator/developer. They have an interesting, aggressive model. People will recognise the model from pre-GFC but this one is structured better.</li>
<li>The company had planned explosive growth and in October, brought growth plans forward and guidance way up. Now there is an offering to fund that growth. </li>
<li>It appears to also be an offering to get a very large short position out of a risk of potential squeeze. For that, I expect this goes smoothly.</li>
</ul>


Kasumigaseki Capital is a small cap consulting real estate speculator/developer. They have an interesting, aggressive model. People will recognise the model from pre-GFC but this one is structured better.
The company had planned explosive growth and in October, brought growth plans forward and guidance way up. Now there is an offering to fund that growth. 
It appears to also be an offering to get a very large short position out of a risk of potential squeeze. For that, I expect this goes smoothly.


Kasumigaseki Capital (3498 JP) - An Offering Worth Examining

David Blennerhassett

<ul>
<li>Now the time decay to expected approvals and tender offer start for <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a> are getting steep. Time to Fight The FUD.</li>
<li>The accretion trade is going to plan as <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus NV (PRX NA)</a> sells <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>; and Prosus and Tencent both back their own shares.</li>
<li>
<a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a>'s board capacity to sabotage calling an SGM has finally run out of puff.</li>
</ul>


Now the time decay to expected approvals and tender offer start for JSR Corp (4185 JP) are getting steep. Time to Fight The FUD.
The accretion trade is going to plan as Prosus NV (PRX NA) sells Tencent (700 HK); and Prosus and Tencent both back their own shares.

Hollysys Automation Technologies (HOLI US)'s board capacity to sabotage calling an SGM has finally run out of puff.


Last Week in Event SPACE: JSR, Prosus/Tencent, Hollysys, Tata Consultancy, Geely, EOFlow

<ul>
<li>Over the weekend I wrote about <a href="https://www.smartkarma.com/entities/kasumigaseki-capital-co-ltd" target="_blank" data-smartkarma-citation="entities:40162:1" rel="noopener">Kasumigaseki Capital (3498 JP)</a>'s move to TSE Prime and then move to TOPIX. I noted earnings would be out 3 October.  </li>
<li>I talked about the possibility of a surprise. They had revised full-year to end-Sep to ¥2bn. They got ¥2.05bn. </li>
<li>But after growing revenue 79% last year, and growing net profit 101%, this year they expect revs +60% and Net Profit +144%. </li>
</ul>


Over the weekend I wrote about Kasumigaseki Capital (3498 JP)'s move to TSE Prime and then move to TOPIX. I noted earnings would be out 3 October.  
I talked about the possibility of a surprise. They had revised full-year to end-Sep to ¥2bn. They got ¥2.05bn. 
But after growing revenue 79% last year, and growing net profit 101%, this year they expect revs +60% and Net Profit +144%. 


UPDATE: Kasumigaseki Capital (3498) Moving to TOPIX. Forward Earnings/Aggressive Forecast Surprise

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

<ul>
<li>Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.</li>
<li>Our main pre-event candidate <a href="https://www.smartkarma.com/entities/celsys-inc" target="_blank" data-smartkarma-citation="entities:20774:1" rel="noopener">CELSYS (3663 JP)</a> has outperformed TOPIX by ~12.6% since 1 Sep (when it was highlighted) and 6 Nov 2023.</li>
<li>There are three TOPIX Inclusion events confirmed for the end of November and two other interesting pre-event names we are closely monitoring.</li>
</ul>


Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
Our main pre-event candidate CELSYS (3663 JP) has outperformed TOPIX by ~12.6% since 1 Sep (when it was highlighted) and 6 Nov 2023.
There are three TOPIX Inclusion events confirmed for the end of November and two other interesting pre-event names we are closely monitoring.


TOPIX Inclusions: Who Is Ready (Nov 2023)

Japan

Kasumigaseki Capital Co.,Ltd. provides solar plant construction and development services. The Company offers electricity transmission, power system management, network maintenance, and other services. Kasumigaseki Capital serves customers in Japan.

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Kasumigaseki Capital (3498 JP)

The TOPIX Big April Basket Flows: ¥200bn a Side Including Many Multi-ADV Flows

The TOPIX Big April Basket is ¥200bn a side of flows - FFW changes, PWR cascading deletions, PWR unwinds, share count changes, Liquidity Factor...

Travis Lundy