Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>Buoyed by strong post-pandemic domestic consumption and the return of inbound visitors to Japan, <a href="https://www.smartkarma.com/entities/sapporo-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14085:1" rel="noopener">Sapporo Holdings (2501 JP)</a> has been firing on all cylinders in recent quarters.</li>
<li>Business fundamentals for next year look strong, with the company positioned to benefit the most from Japan's liquor tax revisions.</li>
<li>Additionally, activist investor 3D Investment Partners could successfully advance their proposals to divest the Real Estate business.</li>
</ul>


Buoyed by strong post-pandemic domestic consumption and the return of inbound visitors to Japan, Sapporo Holdings (2501 JP) has been firing on all cylinders in recent quarters.
Business fundamentals for next year look strong, with the company positioned to benefit the most from Japan's liquor tax revisions.
Additionally, activist investor 3D Investment Partners could successfully advance their proposals to divest the Real Estate business.


2024 High Conviction: Sapporo Poised for a Strong Year Driven by Tax Revision & Investor Activism

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> March rebalance ends end January. There could be three changes at the rebalance with sector balance in focus.</li>
<li>Depending on the changes, passives trackers will need to buy 2.4-22.5x ADV (10-24% of real float) on the inclusions and sell between 3.5-42.5x ADV on the deletions.</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> capping, <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a> increase in PAF, a big funding trade, and potentially new stocks being added in two-steps. </li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) March rebalance ends end January. There could be three changes at the rebalance with sector balance in focus.
Depending on the changes, passives trackers will need to buy 2.4-22.5x ADV (10-24% of real float) on the inclusions and sell between 3.5-42.5x ADV on the deletions.

Fast Retailing (9983 JP) capping, Nitori Holdings (9843 JP) increase in PAF, a big funding trade, and potentially new stocks being added in two-steps. 


Nikkei 225 Index Rebalance Preview (Mar 2024): Update on Ranking, Capping, Funding & Other Changes

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>A holistic view of the three different documents here suggests the <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> buyback, indeed, "It was a trap".</li>
<li>3D Investment Partners raised its stake in <a href="https://www.smartkarma.com/entities/sapporo-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14085:1" rel="noopener">Sapporo Holdings (2501 JP)</a>,  suggesting the activist investor is optimistic about successfully advancing their proposals.</li>
<li>A firm merger proposal is expected for <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> in the next couple of weeks. Time to buy.</li>
</ul>


A holistic view of the three different documents here suggests the Denso Corp (6902 JP) buyback, indeed, "It was a trap".
3D Investment Partners raised its stake in Sapporo Holdings (2501 JP),  suggesting the activist investor is optimistic about successfully advancing their proposals.
A firm merger proposal is expected for Hollysys Automation Technologies (HOLI US) in the next couple of weeks. Time to buy.


Last Week in Event SPACE: Denso, Sapporo, Hollysys, PCCW, Origin Energy

<ul>
<li>Last week, activist investor 3D Investment Partners raised its stake in <a href="https://www.smartkarma.com/entities/sapporo-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14085:1" rel="noopener">Sapporo Holdings (2501 JP)</a> by an additional 13%, cementing its position as the majority shareholder in the business.</li>
<li>This suggests the activist investor is optimistic about successfully advancing their proposals.</li>
<li>If investment properties are sold or spun off, and Alcoholic Beverages and Food &amp; Soft Drinks undergo the suggested turnaround, we anticipate an additional 80-100% upside in the near term.</li>
</ul>


Last week, activist investor 3D Investment Partners raised its stake in Sapporo Holdings (2501 JP) by an additional 13%, cementing its position as the majority shareholder in the business.
This suggests the activist investor is optimistic about successfully advancing their proposals.
If investment properties are sold or spun off, and Alcoholic Beverages and Food &amp; Soft Drinks undergo the suggested turnaround, we anticipate an additional 80-100% upside in the near term.


Sapporo Holdings: Activist Investor 3D Investment Partners Assumes Majority Ownership

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC 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.

<ul>
<li>A group of shareholders aims to raise US$1.3bn (JPY197.8bn) by selling their respective stakes in <a href="https://www.smartkarma.com/entities/asahi-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10482:1" rel="noopener">Asahi Group Holdings (2502 JP)</a> via an extended secondary follow-on.</li>
<li>We have covered the background of the deal in our earlier note, <a href="https://www.smartkarma.com/insights/asahi-group-placement-relatively-small-one-when-compared-to-previous-large-jp-secondary-selldowns" target="_blank" data-smartkarma-citation="insights:117700" rel="noopener">Asahi Group Placement - Relatively Small One when Compared to Previous Large JP Secondary Selldowns</a>.</li>
<li>In this note, we talk about the updates since and look at the performance of some of the past large Japan deals.</li>
</ul>


A group of shareholders aims to raise US$1.3bn (JPY197.8bn) by selling their respective stakes in Asahi Group Holdings (2502 JP) via an extended secondary follow-on.
We have covered the background of the deal in our earlier note, Asahi Group Placement - Relatively Small One when Compared to Previous Large JP Secondary Selldowns.
In this note, we talk about the updates since and look at the performance of some of the past large Japan deals.


Asahi Group Placement - Follow Up - Shaping up for a Christmas Cheer

Japan

Sapporo Holdings Ltd produces and sells alcoholic and non-alcoholic beverages.  The Company's products include beer, wine, brandy, whiskey, imported beer, soft drinks, juice, coffee, and tea.  SAPPORO HOLDINGS also operates real estate businesses.

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Sapporo Holdings (2501 JP)

2024 High Conviction: Sapporo Poised for a Strong Year Driven by Tax Revision & Investor Activism

Sapporo is thriving due to strong domestic consumption and the return of tourists to Japan. It is expected to benefit from liquor tax revisions...

Oshadhi Kumarasiri

Nikkei 225 Index Rebalance Preview (Mar 2024): Update on Ranking, Capping, Funding & Other Changes

There could be 3 changes at the March rebal. Socionext moves up the add list following the stock split. Fast Retailing is back above 11% index...

Brian Freitas

Last Week in Event SPACE: Denso, Sapporo, Hollysys, PCCW, Origin Energy

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

Sapporo Holdings: Activist Investor 3D Investment Partners Assumes Majority Ownership

Activist investor 3D Investment Partners increases stake in Sapporo Holdings, indicating confidence in advancing proposals and potential for...

Oshadhi Kumarasiri

Asahi Group Placement - Follow Up - Shaping up for a Christmas Cheer

A group of shareholders aims to raise US$1.3bn (JPY197.8bn) by selling their respective stakes in Asahi Group Holdings (2502 JP) via an extended...

Clarence Chu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

2024 High Conviction: Sapporo Poised for a Strong Year Driven by Tax Revision & Investor Activism

​Sapporo is thriving due to strong domestic consumption and the return of tourists to Japan. It is expected to benefit from liquor tax revisions...

Oshadhi Kumarasiri

Nikkei 225 Index Rebalance Preview (Mar 2024): Update on Ranking, Capping, Funding & Other Changes

There could be 3 changes at the March rebal. Socionext moves up the add list following the stock split. Fast Retailing is back above 11% index...

Brian Freitas

Last Week in Event SPACE: Denso, Sapporo, Hollysys, PCCW, Origin Energy

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

Sapporo Holdings: Activist Investor 3D Investment Partners Assumes Majority Ownership

​Activist investor 3D Investment Partners increases stake in Sapporo Holdings, indicating confidence in advancing proposals and potential for...

Oshadhi Kumarasiri

Asahi Group Placement - Follow Up - Shaping up for a Christmas Cheer

A group of shareholders aims to raise US$1.3bn (JPY197.8bn) by selling their respective stakes in Asahi Group Holdings (2502 JP) via an extended...

Clarence Chu

Sapporo is thriving due to strong domestic consumption and the return of tourists to Japan. It is expected to benefit from liquor tax revisions...

Activist investor 3D Investment Partners increases stake in Sapporo Holdings, indicating confidence in advancing proposals and potential for...