In today’s briefing:
- TOPIX Rebalance: Flows at the Close on 29 June
- Nidec (6594 JP): Reconsider Strategy & Management
- Subscriptions Provide Growth Model for J Front’s Daimaru-Matsuzakaya
- “Global ESG Funds Invest Less in Japanese Equities.” Why Is This?
- Z Holdings (4689) | An Online Goldmine
- Money Forward (3994 JP): Raising Our Rating to Buy. Cash Is King
TOPIX Rebalance: Flows at the Close on 29 June
- The third tranche of the FFW methodology change for the Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) will be implemented at the close of trading on 29 June.
- One-Way flow is ~JPY 742bn and will be spread across 2170 stocks. The largest inflow will be on NTT (9432 JP) and the largest outflow on Toyota Motor (7203 JP).
- Stocks with the largest impact of inflows have outperformed stocks with the largest impact of outflows, but there has been underperformance over the last couple of weeks.
Nidec (6594 JP): Reconsider Strategy & Management
- Nidec’s share price jumped 6.5% on Friday, June 24, suggesting support near ¥8,000.
- Reconsider the company’s future as CEO Nagamori leads the turnaround of OKK and makes machine tools and industrial robots into a new product division.
- Nagamori, who will turn 78 in August, is still the Key Man at Nidec.
Subscriptions Provide Growth Model for J Front’s Daimaru-Matsuzakaya
- Subscription usage continues to rise in Japan and a new survey suggests just under 50% of teens and 20s plan to use a subscription service this year.
- Daimaru-Matsuzakaya’s luxury and designer brand rental business has been so successful that the company had to turn away new members for a while.
- The department store’s owner, J Front Retailing (3086 JP), sees subscriptions as a third pillar to its business in the future.
“Global ESG Funds Invest Less in Japanese Equities.” Why Is This?
- I would like to discuss about the Nikkei article that says “The number of global ESG funds investing in Japanese equities is low.
- The actual substance of their initiatives hasn’t reached certain level, their information disclosure is insufficient for overseas investors, and their investment returns are inferior to those of other portfolio companies.
- These improvements can be made by the managers themselves. However, ironically, greenwashing has not been an issue in Japan due to the lack of proactive disclosure of ESG-related information.
Z Holdings (4689) | An Online Goldmine
- Z HD’s media business accounts for 80% of consolidated earnings.
- We believe that the combination of Yahoo Japan and LINE is driving new synergies and growth opportunities.
- We believe that the media business alone could justify an EV of ¥4.5t, way above ZHD’s current EV of ¥3.5t
Money Forward (3994 JP): Raising Our Rating to Buy. Cash Is King
Our new target price 4,000 yen; Raising our rating to Buy
We believe that market participants have become increasingly concerned about the sustainability of high growth for loss-making SaaS companies
We raise our 2Q (Mar-May) FY11/22 sales forecast from 5.102bn yen to 5.145bn yen (+28.8% YoY, company guidance median 4.912 bn yen)
Before it’s here, it’s on Smartkarma
