Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents, adjusted every year in August.</li>
<li>We look at the rankings of the potential ADDs/DELs every month for the next rebal, based on most recent trading data. </li>
<li>Every month we provide trade suggestions. The last three months have seen market-neutral returns of +3.0%, +6.5%, +3.2% respectively for the one-month periods. A new trade is suggested below.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents, adjusted every year in August.
We look at the rankings of the potential ADDs/DELs every month for the next rebal, based on most recent trading data. 
Every month we provide trade suggestions. The last three months have seen market-neutral returns of +3.0%, +6.5%, +3.2% respectively for the one-month periods. A new trade is suggested below.


Quiddity JPX-Nikkei 400 Rebal 2024: End-Mar 2024 Estimates and Another Trade Reco

Index Rebalance

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.</li>
<li>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the rankings of the potential ADDs/DELs every month.</li>
<li>Below is a look at potential ADDs/DELs for the JPX-Nikkei 400 index rebal event to come in August 2024 based on trading data as of end-February 2024.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the rankings of the potential ADDs/DELs every month.
Below is a look at potential ADDs/DELs for the JPX-Nikkei 400 index rebal event to come in August 2024 based on trading data as of end-February 2024.


Quiddity JPX-Nikkei 400 Rebal 2024: End-Feb 2024 Estimates

<ul>
<li>In <a href="https://www.smartkarma.com/insights/jpx-nikkei-400-2022-rebal-final-predictions" target="_blank" data-smartkarma-citation="insights:72159" rel="noopener">JPX-Nikkei 400 2022 Rebal: Final Predictions</a>, I discussed Quiddity's final predictions for Potential ADDs/DELs for the JPX-Nikkei Index August 2022 Annual Review.</li>
<li>In that insight, I classified the potential ADDs/DELs by conviction levels and discussed why the high conviction ADDs and DELs deserved a higher weight than the other baskets.</li>
<li>Since then, the LONG High Conviction ADDs - SHORT High conviction DELs Trade has outperformed the other LONG-SHORT combinations.</li>
</ul>


In JPX-Nikkei 400 2022 Rebal: Final Predictions, I discussed Quiddity's final predictions for Potential ADDs/DELs for the JPX-Nikkei Index August 2022 Annual Review.
In that insight, I classified the potential ADDs/DELs by conviction levels and discussed why the high conviction ADDs and DELs deserved a higher weight than the other baskets.
Since then, the LONG High Conviction ADDs - SHORT High conviction DELs Trade has outperformed the other LONG-SHORT combinations.


JPX-Nikkei 400 2022 Rebal: Final Pre-Event Phase Strategy Worked. What Next?

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>Q2 financial results were in-line or better than management targets but lagged consensus expectations</li>
<li>Guidance for Q3 is slightly disappointing with the target range for revenue mostly below expectations whilst promotional and marketing spend continues to expand</li>
<li>The secular growth story is attractive and operating KPI growth remains robust but investors probably needed more from a stock that trades at 7.5x EV/FY22 rev in a risk-off environment</li>
</ul>


Q2 financial results were in-line or better than management targets but lagged consensus expectations
Guidance for Q3 is slightly disappointing with the target range for revenue mostly below expectations whilst promotional and marketing spend continues to expand
The secular growth story is attractive and operating KPI growth remains robust but investors probably needed more from a stock that trades at 7.5x EV/FY22 rev in a risk-off environment


Money Forward - Q2 22 Results Reaction: Mixed Results Short of Consensus

Japan Specialist

Mark Chadwick

<ul>
<li>San San should benefit from an end to Covid restrictions as employees start to network again, with revenue driven to some extent by the volume of business cards that are digitised</li>
<li>San San remains in the early stages of its growth cycle as corporate Japan embraces digital transformation</li>
<li>Q1 Sales growth +25% YoY, accelerated from 19% YoY the previous quarter</li>
<li>Bill One, a new invoicing platform, is starting to contribute</li>
<li>The stock has run up 52% YTD, one of the top performers among large cap SaaS companies in Japan </li>
<li>Trading at 18x TTM Revenue the stock is cheaper than peers</li>
</ul>


San San should benefit from an end to Covid restrictions as employees start to network again, with revenue driven to some extent by the volume of business cards that are digitised
San San remains in the early stages of its growth cycle as corporate Japan embraces digital transformation
Q1 Sales growth +25% YoY, accelerated from 19% YoY the previous quarter
Bill One, a new invoicing platform, is starting to contribute
The stock has run up 52% YTD, one of the top performers among large cap SaaS companies in Japan 
Trading at 18x TTM Revenue the stock is cheaper than peers


San San (4443) - Networking, Not Net Working

Japan

Rakus Co.,Ltd. provides cloud service and IT engineer temp service. The Company also provides rental server services.

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Rakus Co Ltd (3923 JP)

Quiddity JPX-Nikkei 400 Rebal 2024: End-Mar 2024 Estimates and Another Trade Reco

There are 43 Potential ADDs and 44 Potential DELs (unique names) presented in the current Quiddity Leaderboard. The high conviction DELs basket...

Janaghan Jeyakumar, CFA

Quiddity JPX-Nikkei 400 Rebal 2024: End-Feb 2024 Estimates

Since 31st January 2024, the SHORTs have underperformed the index by 6.5%. I suggest unwinding this trade and changing the focus towards the high...

Janaghan Jeyakumar, CFA

JPX-Nikkei 400 2022 Rebal: Final Pre-Event Phase Strategy Worked. What Next?

The official index changes could be announced on 5th August 2022. Expect some positive and negative surprises. Inclusion/Exclusion events could...

Janaghan Jeyakumar, CFA

Money Forward - Q2 22 Results Reaction: Mixed Results Short of Consensus

Money Forward Q2 results met or beat its own targets but fell short of a more optimistic consensus. Guidance for Q3 sales also disappoints whilst...

Kirk Boodry

San San (4443) - Networking, Not Net Working

San San offers investors exposure to multiple growth megatrends, including Digital Transformation, SaaS market penetration, and work-style reform...

Mark Chadwick

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