Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Rorze exceeds expectations in FY2/24 with a 6% revenue beat and an 11% surpass in operating profit, setting a record-high revenue of 28 billion yen in 4Q FY2/24.</li>
<li>FY2/25 revenue guidance of 120 billion yen marks a 12% beat against analyst estimates, with operating profit expected to hit 32 billion yen, outperforming expectations by 10%.</li>
<li>Rorze's stock, though no longer deeply undervalued, remains reasonably priced at 16.5x NTM EBIT, indicating strong potential for earnings growth-driven future upside.</li>
</ul>


Rorze exceeds expectations in FY2/24 with a 6% revenue beat and an 11% surpass in operating profit, setting a record-high revenue of 28 billion yen in 4Q FY2/24.
FY2/25 revenue guidance of 120 billion yen marks a 12% beat against analyst estimates, with operating profit expected to hit 32 billion yen, outperforming expectations by 10%.
Rorze's stock, though no longer deeply undervalued, remains reasonably priced at 16.5x NTM EBIT, indicating strong potential for earnings growth-driven future upside.


Rorze (6323) | Outperforming Expectations Despite 200% Share Price Rally

<ul>
<li>Rorze’s stock price has risen 35% since we became bullish on the stock in August</li>
<li>Q1 sales and operating profits big miss versus analyst consensus due to slowing semicon capex cycle</li>
<li>We would be buying into any stock weakness with an eye on recovery in 2H23 into 2024</li>
</ul>


Rorze’s stock price has risen 35% since we became bullish on the stock in August
Q1 sales and operating profits big miss versus analyst consensus due to slowing semicon capex cycle
We would be buying into any stock weakness with an eye on recovery in 2H23 into 2024


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

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/screen-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:5563:1" rel="noopener">SCREEN Holdings (7735 JP)</a> could be added to a global index at the end of the month and there will be a lot of buying in the stock.</li>
<li>There is a fair bit of positioning for the potential passive buying and there will be supply in the stock.</li>
<li>However, the stock trades cheaper than its peers and a correction could provide an opportunity for long-term investors to enter the stock.</li>
</ul>



SCREEN Holdings (7735 JP) could be added to a global index at the end of the month and there will be a lot of buying in the stock.
There is a fair bit of positioning for the potential passive buying and there will be supply in the stock.
However, the stock trades cheaper than its peers and a correction could provide an opportunity for long-term investors to enter the stock.


Screen Holdings (7735 JP): Positioning & Potential Passive Buying

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>As designed, the JPX-Nikkei400 Index is something of a disaster. It aims to be slightly 'smart' vs other cap-weighted indices like TOPIX, but tracking error vs TOPIX is de minimus.</li>
<li>This year, in week 1, the ADD vs DELETE performance is positive. If we sector-hedge the ADDs vs DELETEs, it's doing even better.</li>
<li>This is probably due to relatively low pre-positioning, and cares. Momentum suggests one could be long ADDs vs DELETEs. And there is the perennial trade to watch out for.</li>
</ul>


As designed, the JPX-Nikkei400 Index is something of a disaster. It aims to be slightly 'smart' vs other cap-weighted indices like TOPIX, but tracking error vs TOPIX is de minimus.
This year, in week 1, the ADD vs DELETE performance is positive. If we sector-hedge the ADDs vs DELETEs, it's doing even better.
This is probably due to relatively low pre-positioning, and cares. Momentum suggests one could be long ADDs vs DELETEs. And there is the perennial trade to watch out for.


2022 JPX Nikkei 400 Rebal Update - Going the Right Way

<ul>
<li>We are Bullish on Rorze, a global leader in ultra-clean wafer substrate handling solutions.</li>
<li>We believe that Rorze is well placed to monetise the long-term growth in semiconductor demand and WFE spend</li>
<li>The stock has recently underperformed its peer group and valuations collapsed. We see almost 100% upside potential based on a 14x target multiple</li>
</ul>


We are Bullish on Rorze, a global leader in ultra-clean wafer substrate handling solutions.
We believe that Rorze is well placed to monetise the long-term growth in semiconductor demand and WFE spend
The stock has recently underperformed its peer group and valuations collapsed. We see almost 100% upside potential based on a 14x target multiple


Japan

RORZE CORPORATION manufactures printed circuit board conveyers and wafer handlers for semiconductor manufacturing.  The Company also produces sorters and vacuum chamber robots, as well as controllers and stepping motor drivers used in various automation systems.  Rorze provides parts replacement and repair services for its products.

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Rorze Corp (6323 JP)

Rorze (6323) | Q1 Miss, Buying Opp

Despite Q1 miss versus consensus expectations, we continue to think the stock is well placed to capitalize on the structural demand for...

Mark Chadwick

Screen Holdings (7735 JP): Positioning & Potential Passive Buying

The increased market cap could lead to Screen Holdings being added to passive portfolios at the end of Feb. Positioning in the stock is larger than...

Brian Freitas

2022 JPX Nikkei 400 Rebal Update - Going the Right Way

JPX Nikkei 400 rebalance is going the right way in the 6 trading days so far, and it wasn't done on Day1 (which was lacklustre). It may be under...

Travis Lundy

Rorze (6323) | Japan Small Cap Winner

Rorze is a stock for small-cap Japan growth investors. The company is well placed to monetise the long-term growth in semiconductor demand and WFE...

Mark Chadwick

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52-week Range

Market Cap (USDm)

P/E

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Rorze (6323) | Outperforming Expectations Despite 200% Share Price Rally

​Rorze impresses with record-high revenue and profit in FY2/24, beats analyst estimates for FY2/25 with strong guidance. Stock remains reasonably...

Mark Chadwick

Rorze (6323) | Q1 Miss, Buying Opp

Despite Q1 miss versus consensus expectations, we continue to think the stock is well placed to capitalize on the structural demand for...

Mark Chadwick

Screen Holdings (7735 JP): Positioning & Potential Passive Buying

The increased market cap could lead to Screen Holdings being added to passive portfolios at the end of Feb. Positioning in the stock is larger than...

Brian Freitas

2022 JPX Nikkei 400 Rebal Update - Going the Right Way

JPX Nikkei 400 rebalance is going the right way in the 6 trading days so far, and it wasn't done on Day1 (which was lacklustre). It may be under...

Travis Lundy

Rorze (6323) | Japan Small Cap Winner

Rorze is a stock for small-cap Japan growth investors. The company is well placed to monetise the long-term growth in semiconductor demand and WFE...

Mark Chadwick

Rorze impresses with record-high revenue and profit in FY2/24, beats analyst estimates for FY2/25 with strong guidance. Stock remains reasonably...