Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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

<p>Modec is up about 22% in one and a half months rebounding close to its recent peak following SMBC initiating on the stock with a buy. The company's earnings are relatively difficult to forecast as an analyst (FY03/19 consensus has a spread of JPY2.6bn - JPY17.5bn at the OP level) due to a somewhat complicated earnings structure that perhaps makes some investors decide that it is not worth the bother. This has lead to a situation where the company is trading close to all time lows on forward and historical PE at just 7.9x and 6.5x respectively, and just over 1.2x PB. Its average since listing for the three metrics are 21x forward PE (since 2006), 26.6x historical PE (since 2003) and 1.75x PB (since 2006).</p>

Modec is up about 22% in one and a half months rebounding close to its recent peak following SMBC initiating on the stock with a buy. The company's earnings are relatively difficult to forecast as an analyst (FY03/19 consensus has a spread of JPY2.6bn - JPY17.5bn at the OP level) due to a somewhat complicated earnings structure that perhaps makes some investors decide that it is not worth the bother. This has lead to a situation where the company is trading close to all time lows on forward and historical PE at just 7.9x and 6.5x respectively, and just over 1.2x PB. Its average since listing for the three metrics are 21x forward PE (since 2006), 26.6x historical PE (since 2003) and 1.75x PB (since 2006).

Modec Price Momentum Strong, 230% of Market Cap in Orders Incoming by Year End - 8x PE Is Too Cheap

Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

Thematic (Sector/Industry)

<p>We looked at which regions in Asia are most correlated to the S&amp;P500. Over the last 8 years, 42% of Japanese companies have greater than 30% correlation to the S&amp;P500. The overall average correlation to the S&amp;P500 in Japan is 28%. The next closest is Taiwan with an average correlation of 28%, then Singapore with a correlation of 27% and Hong Kong with a correlation of 25%.  </p><h2>% of Companies with greater than 30% correlation to the US </h2><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/032/861/original/5.png?1504629108" class="editor-image img-responsive" data-smartkarma-image-id="32861"></figure><div class="content-caption">Source: Custom Products</div><p>China actually has 1 company, <a href="https://www.smartkarma.com/entities/10177" target="_blank" data-smartkarma-citation="entities:10177:1">Tongling</a>…</p>

We looked at which regions in Asia are most correlated to the S&amp;P500. Over the last 8 years, 42% of Japanese companies have greater than 30% correlation to the S&amp;P500. The overall average correlation to the S&amp;P500 in Japan is 28%. The next closest is Taiwan with an average correlation of 28%, then Singapore with a correlation of 27% and Hong Kong with a correlation of 25%.  % of Companies with greater than 30% correlation to the US Source: Custom ProductsChina actually has 1 company, Tongling…

Japan and the Financial Sector in Asia Highly Correlated to the US....

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

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Jardine Strategic Scheduled to Join STI on 18 September

STI’s Strongest Sectors in YTD – Real Estate, Financials & Industrials

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>The rumour mill speculating on the privatisation of <a href="https://www.smartkarma.com/entities/3197" target="_blank" data-smartkarma-citation="entities:3197:1">Wheelock Properties (S) Ltd (WP SP)</a> is again doing the rounds. The stock is up around 10% in the past week, nudging 52-week highs.</p><p>WP as a candidate for delisting has been fittingly picked over and support for doing so is compelling.</p><p>In this note, I revive those factors supporting a takeover offer from parent <a href="https://www.smartkarma.com/entities/52" target="_blank" data-smartkarma-citation="entities:52:1">Wheelock &amp; Co Ltd (20 HK)</a> and what, if anything has changed recently to suggest a delisting is more evident. And should Wheelock opt to go down the privatisation path, what are its options?</p>

The rumour mill speculating on the privatisation of Wheelock Properties (S) Ltd (WP SP) is again doing the rounds. The stock is up around 10% in the past week, nudging 52-week highs.WP as a candidate for delisting has been fittingly picked over and support for doing so is compelling.In this note, I revive those factors supporting a takeover offer from parent Wheelock &amp; Co Ltd (20 HK) and what, if anything has changed recently to suggest a delisting is more evident. And should Wheelock opt to go down the privatisation path, what are its options?

Wheelock Properties - To Privatise or Not

Singapore

Keppel Corporation Limited's core businesses are offshore and marine, infrastructure, property investment and development, telecommunications and transportation, energy, and engineering.

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Keppel Corp (KEP SP)

Modec Price Momentum Strong, 230% of Market Cap in Orders Incoming by Year End - 8x PE Is Too Cheap

Modec is up about 22% in one and a half months rebounding close to its recent peak following SMBC initiating on the stock with a buy. The company's...

Mio Kato

Japan and the Financial Sector in Asia Highly Correlated to the US....

We looked at which regions in Asia are most correlated to the S&P500. Over the last 8 years, 42% of Japanese companies have greater than 30%...

Custom Products Group

Jardine Strategic Scheduled to Join STI on 18 September

Singapore Exchange Ltd (SGX)

STI’s Strongest Sectors in YTD – Real Estate, Financials & Industrials

Singapore Exchange Ltd (SGX)

Wheelock Properties - To Privatise or Not

The rumour mill speculating on the privatisation of Wheelock Properties (S) Ltd (WP SP) is again doing the rounds. The stock is up around 10% in...

David Blennerhassett

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