Research Coverage of Japanese Listed Companies, Shared Research Inc

Shared Research

Research Coverage of Japanese Listed Companies

Shared Research Inc

Pioneering research coverage of Japanese listed companies. Now customizable and interactive for global institutional investors. Corporate access reimagined.

Equity Bottom-Up

<ul><li>In FY08/25, the company reported JPY129.8bn sales, JPY45.0bn gross profit, JPY15.6bn operating profit, and JPY8.9bn net income.</li><li>Software Testing Services segment achieved JPY84.3bn sales, JPY31.1bn gross profit, and JPY21.5bn operating profit in FY08/25.</li><li>FY08/26 forecasts JPY150.0bn sales, JPY20.0bn operating profit, and JPY13.5bn net profit, on an adjusted basis.</li></ul>

In FY08/25, the company reported JPY129.8bn sales, JPY45.0bn gross profit, JPY15.6bn operating profit, and JPY8.9bn net income.Software Testing Services segment achieved JPY84.3bn sales, JPY31.1bn gross profit, and JPY21.5bn operating profit in FY08/25.FY08/26 forecasts JPY150.0bn sales, JPY20.0bn operating profit, and JPY13.5bn net profit, on an adjusted basis.

Shift Inc (3697 JP): Full-year FY08/25 flash update

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> runs a software quality assurance testing business. 400% revenue growth in 5 years, but this year to Aug25 is "only" 17.5% according to Q3 results guidance.</li>
<li>It was a "growth stock" for a long while, and large long-only growth investors flocked to the name. In the past several months many have exited. </li>
<li>The stock will be included in the Nikkei 225 Average next Tuesday. The supply/demand dynamics here to there are interesting. Afterwards they may be more interesting.</li>
</ul>



Shift Inc (3697 JP) runs a software quality assurance testing business. 400% revenue growth in 5 years, but this year to Aug25 is "only" 17.5% according to Q3 results guidance.
It was a "growth stock" for a long while, and large long-only growth investors flocked to the name. In the past several months many have exited. 
The stock will be included in the Nikkei 225 Average next Tuesday. The supply/demand dynamics here to there are interesting. Afterwards they may be more interesting.


Shift (3697 JP) - Short-Selling into Nikkei 225 Inclusion = Crowded Register Dynamic = Squeezy

Index Rebalance

<ul>
<li>Today, in the latest announcement in 17 years, the Nikkei Index Committee announced there would be only one change to the Nikkei 225 at the 30 Sep close. </li>
<li>
<a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> is IN. <a href="https://www.smartkarma.com/entities/citizen-watch-co-ltd" target="_blank" data-smartkarma-citation="entities:8571:1" rel="noopener">Citizen Watch (7762 JP)</a> is OUT. <a href="https://www.smartkarma.com/entities/baycurrent-consulting-inc" target="_blank" data-smartkarma-citation="entities:25985:1" rel="noopener">BayCurrent Consulting (6532 JP)</a> is uplifted. Sony Financial Spin is out 29 Sep. <a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a>? MIA. </li>
<li>In dollar terms it is smallish. In ADV terms there are some big changes. And this puts Kokusai Electric back possibly years. </li>
</ul>


Today, in the latest announcement in 17 years, the Nikkei Index Committee announced there would be only one change to the Nikkei 225 at the 30 Sep close. 

Shift Inc (3697 JP) is IN. Citizen Watch (7762 JP) is OUT. BayCurrent Consulting (6532 JP) is uplifted. Sony Financial Spin is out 29 Sep. Kokusai Electric (6525 JP)? MIA. 
In dollar terms it is smallish. In ADV terms there are some big changes. And this puts Kokusai Electric back possibly years. 


[Quiddity Index] Nikkei 225 Sep25 Review: Shift (3697) In, Citizen Watch (7762) Out. Kokusai Misses

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> will replace <a href="https://www.smartkarma.com/entities/citizen-watch-co-ltd" target="_blank" data-smartkarma-citation="entities:8571:1" rel="noopener">Citizen Watch (7762 JP)</a> in 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> after the close of trading on 30 September.</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 from 0.5 to 1 and <a href="https://www.smartkarma.com/entities/sony-financial-holdings-inc" target="_blank" data-smartkarma-citation="entities:564:1" rel="noopener">Sony Financial Holdings (8729 JP)</a> will be deleted from the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">NKY INDEX</a> following the spin-off 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>The index committee has decided not to add <a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric</a> to the index despite the stock ranking within the top 75. The deletion of <a href="https://www.smartkarma.com/entities/citizen-watch-co-ltd" target="_blank" data-smartkarma-citation="entities:8571:1" rel="noopener">Citizen Watch</a> points to sector balance.</li>
</ul>



Shift Inc (3697 JP) will replace Citizen Watch (7762 JP) in the Nikkei 225 (NKY INDEX) after the close of trading on 30 September.

BayCurrent Consulting's PAF will double from 0.5 to 1 and Sony Financial Holdings (8729 JP) will be deleted from the NKY INDEX following the spin-off from Sony Corp (6758 JP). 
The index committee has decided not to add Kokusai Electric to the index despite the stock ranking within the top 75. The deletion of Citizen Watch points to sector balance.


Nikkei 225 Index Rebalance: Shift (3697) Replaces Citizen Watch (7762); Kokusai Electric (6525)👎

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

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.

<ul>
<li>Shift’s share price has been up by more than 35% YTD driven by improved margins which saw a temporary decline due to Shift’s investment on HR and system reinforcement.</li>
<li>The company’s GPM reached an all-time high in 2QFY08/2025 while OPM has shown significant improvement driven by the company’s changes to recruitment policy that is aligned to utilisation rates.</li>
<li>Though Shift’s top line growth has slowed down, it's not something to worry too much about as its new businesses and large-scale project wins should help revive top line growth.</li>
</ul>


Shift’s share price has been up by more than 35% YTD driven by improved margins which saw a temporary decline due to Shift’s investment on HR and system reinforcement.
The company’s GPM reached an all-time high in 2QFY08/2025 while OPM has shown significant improvement driven by the company’s changes to recruitment policy that is aligned to utilisation rates.
Though Shift’s top line growth has slowed down, it's not something to worry too much about as its new businesses and large-scale project wins should help revive top line growth.


Shift: Shift in Recruitment Policy Supports Margin Recovery; Further Upside

Japan

SHIFT Inc. offers information technology outsourcing services. The Company provides outsourcing software testing services to corporations and individual clients. SHIFT also provides software solutions and consulting services, as well as educational classes and programs.

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Shift Inc (3697 JP)

Shift Inc (3697 JP): Full-year FY08/25 flash update

In FY08/25, the company reported JPY129.8bn sales, JPY45.0bn gross profit, JPY15.6bn operating profit, and JPY8.9bn net income. Software Testing...

Shared Research

Shift (3697 JP) - Short-Selling into Nikkei 225 Inclusion = Crowded Register Dynamic = Squeezy

There has been a lot of new shorting as SHIFT lost momentum since July. The Nikkei 225 inclusion reduces Max Float. Current short interest vs...

Travis Lundy

[Quiddity Index] Nikkei 225 Sep25 Review: Shift (3697) In, Citizen Watch (7762) Out. Kokusai Misses

The Nikkei Index Committee chose to just change one name. Again disappointing. Kokusai misses out as Shift is added, Citizen Watch removed. ADV...

Travis Lundy

Nikkei 225 Index Rebalance: Shift (3697) Replaces Citizen Watch (7762); Kokusai Electric (6525)👎

SHIFT will replace Citizen Watch in the NKY at the close on 30 Sep. Baycurrent's PAF increases from 0.5 to 1. Sony Financial will be sold on 29...

Brian Freitas

Shift: Shift in Recruitment Policy Supports Margin Recovery; Further Upside

Shift's share price up 35% YTD due to improved margins after a temporary decline due to HR and system investments. The company has aligned its...

Shifara Samsudeen, FCMA, CGMA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Shift Inc (3697 JP): Full-year FY08/25 flash update

In FY08/25, the company reported JPY129.8bn sales, JPY45.0bn gross profit, JPY15.6bn operating profit, and JPY8.9bn net income. Software Testing...

Shared Research

Shift (3697 JP) - Short-Selling into Nikkei 225 Inclusion = Crowded Register Dynamic = Squeezy

There has been a lot of new shorting as SHIFT lost momentum since July. The Nikkei 225 inclusion reduces Max Float. Current short interest vs...

Travis Lundy

[Quiddity Index] Nikkei 225 Sep25 Review: Shift (3697) In, Citizen Watch (7762) Out. Kokusai Misses

The Nikkei Index Committee chose to just change one name. Again disappointing. Kokusai misses out as Shift is added, Citizen Watch removed. ADV...

Travis Lundy

Nikkei 225 Index Rebalance: Shift (3697) Replaces Citizen Watch (7762); Kokusai Electric (6525)👎

SHIFT will replace Citizen Watch in the NKY at the close on 30 Sep. Baycurrent's PAF increases from 0.5 to 1. Sony Financial will be sold on 29...

Brian Freitas

Shift: Shift in Recruitment Policy Supports Margin Recovery; Further Upside

​Shift's share price up 35% YTD due to improved margins after a temporary decline due to HR and system investments. The company has aligned its...

Shifara Samsudeen, FCMA, CGMA

Shift's share price up 35% YTD due to improved margins after a temporary decline due to HR and system investments. The company has aligned its...