Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In December, I thought the March 2025 Nikkei 225 Rebalance was going to be 2 ADDs 2 DELETEs and a double-capping for Fast Retailing. </li>
<li>Fast Retailing has fallen sharply vs Nikkei 225, and another stock has announced a large-multiple share split, making it a strong candidate for Nikkei 225 ADDITION in March 2025.</li>
<li>There is short-term path risk on all three ADDs, but they are definitely worth watching. Keep an eye out for separate insights on two of these names.</li>
</ul>


In December, I thought the March 2025 Nikkei 225 Rebalance was going to be 2 ADDs 2 DELETEs and a double-capping for Fast Retailing. 
Fast Retailing has fallen sharply vs Nikkei 225, and another stock has announced a large-multiple share split, making it a strong candidate for Nikkei 225 ADDITION in March 2025.
There is short-term path risk on all three ADDs, but they are definitely worth watching. Keep an eye out for separate insights on two of these names.


[Quiddity Index Jan25] Nikkei 225 Mar Rebal: 3 IN, 3 OUT, $3bn One Way

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.

Equity Bottom-Up

<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> reported 4Q and full-year FY08/2023 results today. 4Q revenue increased 38.2% YoY while OP more than doubled during the quarter. Both revenue and OP beat consensus estimates.</li>
<li>Full-Year revenues and OP increased 35.7% and 67.4% respectively beating consensus estimates by 1.2% and 67.4% respectively. Both revenue and OP were above the company's own guidance.</li>
<li>Shift’s share price has dropped by about 17% since August as market became concerned over the growth prospects, however, share price has started to move up.</li>
</ul>



Shift Inc (3697 JP) reported 4Q and full-year FY08/2023 results today. 4Q revenue increased 38.2% YoY while OP more than doubled during the quarter. Both revenue and OP beat consensus estimates.
Full-Year revenues and OP increased 35.7% and 67.4% respectively beating consensus estimates by 1.2% and 67.4% respectively. Both revenue and OP were above the company's own guidance.
Shift’s share price has dropped by about 17% since August as market became concerned over the growth prospects, however, share price has started to move up.


High Conviction Shift: Another Upbeat Quarter; Wipes Off Concerns Over an Earnings Slowdown

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.

<ul><li>In FY08/24, the company reported sales of JPY110.6bn (+25.7% YoY) and operating profit of JPY10.5bn (-8.9% YoY).</li><li>Software Testing Related Services segment sales reached JPY71.3bn (+22.4% YoY), with operating profit of JPY16.2bn (+11.4% YoY).</li><li>For FY08/25, the company forecasts sales of JPY130.0bn (+17.5% YoY) and operating profit of JPY13.5bn (+28.1% YoY).</li></ul>

In FY08/24, the company reported sales of JPY110.6bn (+25.7% YoY) and operating profit of JPY10.5bn (-8.9% YoY).Software Testing Related Services segment sales reached JPY71.3bn (+22.4% YoY), with operating profit of JPY16.2bn (+11.4% YoY).For FY08/25, the company forecasts sales of JPY130.0bn (+17.5% YoY) and operating profit of JPY13.5bn (+28.1% YoY).

Shift Inc (3697 JP): Full-year FY08/24 flash update

Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

Thematic (Sector/Industry)

<ul>
<li>The median stock in our Dogs of Topix basket outperformed the median stock in the Topix 400 by 4% through Sept 2024.</li>
<li>This is below the average of 7% achieved by such stocks over the past 9 years, but it was a much tougher stretch than it looked. </li>
<li>Do we need to re-think? Much can be learned comparing the outperformers, whose median return was +34%, compared to the underperformers, which declined 23%.</li>
</ul>


The median stock in our Dogs of Topix basket outperformed the median stock in the Topix 400 by 4% through Sept 2024.
This is below the average of 7% achieved by such stocks over the past 9 years, but it was a much tougher stretch than it looked. 
Do we need to re-think? Much can be learned comparing the outperformers, whose median return was +34%, compared to the underperformers, which declined 23%.


Have the Rules for Bottom Fishing Changed?

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> September rebalance ends in 4 weeks. There could be one outright change and one or two others driven by sector balance.</li>
<li>There will be passive buying in <a href="https://www.smartkarma.com/entities/baycurrent-consulting-inc" target="_blank" data-smartkarma-citation="entities:25985:1" rel="noopener">BayCurrent Consulting</a> as the PAF moves from 0.5 to 1. <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>'s index weight is below the 10% cap for now. </li>
<li>
<a href="https://www.smartkarma.com/entities/rohm-co-ltd" target="_blank" data-smartkarma-citation="entities:2953:1" rel="noopener">ROHM Co Ltd (6963 JP)</a> replaces <a href="https://www.smartkarma.com/entities/ntt-data-corp" target="_blank" data-smartkarma-citation="entities:11232:1" rel="noopener">NTT Data Corp (9613 JP)</a> later this week and there will be a lot of focus on those names.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) September rebalance ends in 4 weeks. There could be one outright change and one or two others driven by sector balance.
There will be passive buying in BayCurrent Consulting as the PAF moves from 0.5 to 1. Fast Retailing (9983 JP)'s index weight is below the 10% cap for now. 

ROHM Co Ltd (6963 JP) replaces NTT Data Corp (9613 JP) later this week and there will be a lot of focus on those names.


Nikkei 225 Index Rebalance Preview (Sep 2025): Potential Adds, Deletes, PAF, Capping & Other Changes

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)

[Quiddity Index Jan25] Nikkei 225 Mar Rebal: 3 IN, 3 OUT, $3bn One Way

Nikkei 225 March 2025 Rebalance could easily be three ADDs and three DELETEs this time. Last time it could have been too, but they only went for...

Travis Lundy

High Conviction Shift: Another Upbeat Quarter; Wipes Off Concerns Over an Earnings Slowdown

Shift reported strong 4Q results which beat estimates. Share price has dropped since August due to concerns over earnings growth, however, recent...

Shifara Samsudeen, FCMA, CGMA

Shift Inc (3697 JP): Full-year FY08/24 flash update

In FY08/24, the company reported sales of JPY110.6bn (+25.7% YoY) and operating profit of JPY10.5bn (-8.9% YoY). Software Testing Related Services...

Shared Research

Have the Rules for Bottom Fishing Changed?

Increased passive investing and a rising interest rate environment have made the bottom-fishing game more treacherous, but the rules are still the...

Michael Allen

Nikkei 225 Index Rebalance Preview (Sep 2025): Potential Adds, Deletes, PAF, Capping & Other Changes

Rohm replace NTT Data later this week. There could be 1, maybe 2, changes in Sep. Baycurrent's PAF increases, Fast Retailing's CPAF should stay the...

Brian Freitas

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[Quiddity Index Jan25] Nikkei 225 Mar Rebal: 3 IN, 3 OUT, $3bn One Way

Nikkei 225 March 2025 Rebalance could easily be three ADDs and three DELETEs this time. Last time it could have been too, but they only went for...

Travis Lundy

High Conviction Shift: Another Upbeat Quarter; Wipes Off Concerns Over an Earnings Slowdown

​Shift reported strong 4Q results which beat estimates. Share price has dropped since August due to concerns over earnings growth, however, recent...

Shifara Samsudeen, FCMA, CGMA

Shift Inc (3697 JP): Full-year FY08/24 flash update

In FY08/24, the company reported sales of JPY110.6bn (+25.7% YoY) and operating profit of JPY10.5bn (-8.9% YoY). Software Testing Related Services...

Shared Research

Have the Rules for Bottom Fishing Changed?

Increased passive investing and a rising interest rate environment have made the bottom-fishing game more treacherous, but the rules are still the...

Michael Allen

Nikkei 225 Index Rebalance Preview (Sep 2025): Potential Adds, Deletes, PAF, Capping & Other Changes

Rohm replace NTT Data later this week. There could be 1, maybe 2, changes in Sep. Baycurrent's PAF increases, Fast Retailing's CPAF should stay the...

Brian Freitas

Shift reported strong 4Q results which beat estimates. Share price has dropped since August due to concerns over earnings growth, however, recent...