Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>The global auto industry faces significant tariff exposure. Option implied volatility offers a forward-looking assessment of risk.</li>
<li>Chinese car makers started to increase in implied volatility more than the other markets at the beginning of February. They now show the highest risk.</li>
<li>Recent implied volatility trends, asymmetric pricing (skew), and the term structure all seem to indicate that the Indian auto sector is the least exposed to international trade relations.</li>
</ul>


The global auto industry faces significant tariff exposure. Option implied volatility offers a forward-looking assessment of risk.
Chinese car makers started to increase in implied volatility more than the other markets at the beginning of February. They now show the highest risk.
Recent implied volatility trends, asymmetric pricing (skew), and the term structure all seem to indicate that the Indian auto sector is the least exposed to international trade relations.


EQD | Volatile Roads: Unveiling Risk in the Asian Auto Industry Through the Options Market

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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.

Event-Driven

<ul>
<li>With <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota (7203 JP)</a> having sold some of its stake in <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso</a>, <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI</a> and <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive</a> this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.</li>
<li>Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


With Toyota (7203 JP) having sold some of its stake in Denso, KDDI and Harmonic Drive this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.
Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

<ul>
<li>Following up on our earlier cross-shareholding notes, in this note we look at <a href="https://www.smartkarma.com/entities/mizuho-financial-group-inc" target="_blank" data-smartkarma-citation="entities:219:1" rel="noopener">Mizuho Financial Group (8411 JP)</a>'s cross-shareholding.</li>
<li>Mizuho had a stake over US$100m in at least 34 listed Japanese stocks, amounting to a total of around US$7bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


Following up on our earlier cross-shareholding notes, in this note we look at Mizuho Financial Group (8411 JP)'s cross-shareholding.
Mizuho had a stake over US$100m in at least 34 listed Japanese stocks, amounting to a total of around US$7bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


Mizuho Cross-Shareholding - US$11bn of Cross-Shareholding, with at Least US$2bn to Sell over FY24-26

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>Yamaha Motor (7272) | Silchester raised stake to 8.8%; shares down 20% despite core motorcycles/marine generating 20-30% ROIC, undermined by ¥62bn losses in RVs/Robotics.</li>
<li>Tamron (7740) | Effissimo increased holding to 13%; company trades at 6x EBIT with 20%+ margins, expanding from camera lenses into automotive ADAS and industrial optics.</li>
<li>NPC (6255) | LIM acquired 6% stake in solar equipment maker down 20% year-to-date, betting on perovskite cycle recovery despite withdrawn guidance and customer weakness.</li>
</ul>


Yamaha Motor (7272) | Silchester raised stake to 8.8%; shares down 20% despite core motorcycles/marine generating 20-30% ROIC, undermined by ¥62bn losses in RVs/Robotics.
Tamron (7740) | Effissimo increased holding to 13%; company trades at 6x EBIT with 20%+ margins, expanding from camera lenses into automotive ADAS and industrial optics.
NPC (6255) | LIM acquired 6% stake in solar equipment maker down 20% year-to-date, betting on perovskite cycle recovery despite withdrawn guidance and customer weakness.


Japan Activism Briefs: Yamaha Motor, Tamron, NPC

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

<ul>
<li>Big capex plans for Google and good numbers for SK Hynix setting strong tone for AI related.</li>
<li>Momo names slid yesterday, although Ishiba heading for door may pressure heavies further.</li>
<li>Autos squeezed hard yesterday, but there should be more upside for names with elevated SI still.</li>
</ul>


Big capex plans for Google and good numbers for SK Hynix setting strong tone for AI related.
Momo names slid yesterday, although Ishiba heading for door may pressure heavies further.
Autos squeezed hard yesterday, but there should be more upside for names with elevated SI still.


Japan Morning Connection: US Liking JP and Expected EU Trade Deals, Expect Flows Back in Tech

Japan

Yamaha Motor Co., Ltd. manufactures motorcycles.  The Company also produces motor vehicle engines for Toyota Motor Corp. and Ford Motor Co.  Yamaha Motor's specialty products include motor boats, snowmobiles, golf carts, and electric power generators.  Yamaha Motor sells products in Japan, North America, Europe, Asia, and South America.

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Yamaha Motor (7272 JP)

EQD | Volatile Roads: Unveiling Risk in the Asian Auto Industry Through the Options Market

Global auto industry faces tariff risk. The option market assigns the highest risk to Chinese car makers. The Indian auto sector appears least...

Gaudenz Schneider

Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Toyota, Toyota Industries and Denso are tag teaming to unwind some of their stake in Aisin, in a deal worth over US$1bn. While the timing of the...

Sumeet Singh

Mizuho Cross-Shareholding - US$11bn of Cross-Shareholding, with at Least US$2bn to Sell over FY24-26

Following up on our earlier cross-shareholding notes, in this note we look at Mizuho Financial Group (8411 JP)'s cross-shareholding.

Sumeet Singh

Japan Activism Briefs: Yamaha Motor, Tamron, NPC

Top activist investors are making contrarian bets in Japan: Silchester raises Yamaha Motor stake, Effissimo raised Tamron stake to 13% at 6x EBIT,...

Mark Chadwick

Japan Morning Connection: US Liking JP and Expected EU Trade Deals, Expect Flows Back in Tech

With reversal from momentum and Ishiba's resignation, defense names may drop further. Autos may have plenty more upside despite big moves yesterday.

Andrew Jackson

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EQD | Volatile Roads: Unveiling Risk in the Asian Auto Industry Through the Options Market

​Global auto industry faces tariff risk. The option market assigns the highest risk to Chinese car makers. The Indian auto sector appears least...

Gaudenz Schneider

Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Toyota, Toyota Industries and Denso are tag teaming to unwind some of their stake in Aisin, in a deal worth over US$1bn. While the timing of the...

Sumeet Singh

Mizuho Cross-Shareholding - US$11bn of Cross-Shareholding, with at Least US$2bn to Sell over FY24-26

Following up on our earlier cross-shareholding notes, in this note we look at Mizuho Financial Group (8411 JP)'s cross-shareholding.

Sumeet Singh

Japan Activism Briefs: Yamaha Motor, Tamron, NPC

Top activist investors are making contrarian bets in Japan: Silchester raises Yamaha Motor stake, Effissimo raised Tamron stake to 13% at 6x EBIT,...

Mark Chadwick

Japan Morning Connection: US Liking JP and Expected EU Trade Deals, Expect Flows Back in Tech

With reversal from momentum and Ishiba's resignation, defense names may drop further. Autos may have plenty more upside despite big moves yesterday.

Andrew Jackson

Global auto industry faces tariff risk. The option market assigns the highest risk to Chinese car makers. The Indian auto sector appears least...