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 Capital Markets

<ul>
<li>Net Protections Holdings offers Japan’s largest buy now pay later service to both consumers and SMEs. </li>
<li>The company has been growing steadily at a CAGR of just over 25% which should interest investors. </li>
<li>However, there are a variety of issues with the business which make us question the long-term prospects.</li>
</ul>


Net Protections Holdings offers Japan’s largest buy now pay later service to both consumers and SMEs. 
The company has been growing steadily at a CAGR of just over 25% which should interest investors. 
However, there are a variety of issues with the business which make us question the long-term prospects.


Net Protections IPO – If You Buy Now You May Pay Later

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Equity Bottom-Up

<p><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 its 4QFY08/2021 and full-year FY08/2021 results on Tuesday (12<sup>th</sup> October) which saw revenues growing 60.2% YoY to JPY46.0bn from JPY28.7bn in FY08/2020. The operating profit for the year grew 69.8% YoY to JPY4.0bn vs JPY2.4bn in the previous year. Both reported revenue and OP beat Shift’s guidance by 2.2% and 17.5% respectively while revenue and OP beat consensus estimates by 0.4% and 4.5% respectively.</p><p>The company’s share price rose 10.0% at the end of Wednesday’s close following the company’s strong FY08/2021 earnings.</p><p>We discuss the details below.</p>

Shift Inc (3697 JP) reported its 4QFY08/2021 and full-year FY08/2021 results on Tuesday (12th October) which saw revenues growing 60.2% YoY to JPY46.0bn from JPY28.7bn in FY08/2020. The operating profit for the year grew 69.8% YoY to JPY4.0bn vs JPY2.4bn in the previous year. Both reported revenue and OP beat Shift’s guidance by 2.2% and 17.5% respectively while revenue and OP beat consensus estimates by 0.4% and 4.5% respectively.The company’s share price rose 10.0% at the end of Wednesday’s close following the company’s strong FY08/2021 earnings.We discuss the details below.

Shift 4Q: Growth Story Is Getting Stronger

<p><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>  offers a range of consultancy services in Japan including development and formulation of business strategy, digital transformation, M&amp;A and JV, improvement in operational capabilities and IT Services. The Covid-19 outbreak has accelerated the digital transformation in Japan which has led to increased requirements for consulting services in the country.</p><p>BayCurrent’s share price has rallied almost 200% over the last 12-months to JPY46,250 per share from JPY15,740 per share a year ago. In this insight, we examine the company’s business model, key drivers, outlook, financials and valuation.</p>

Baycurrent Consulting (6532 JP)  offers a range of consultancy services in Japan including development and formulation of business strategy, digital transformation, M&amp;A and JV, improvement in operational capabilities and IT Services. The Covid-19 outbreak has accelerated the digital transformation in Japan which has led to increased requirements for consulting services in the country.BayCurrent’s share price has rallied almost 200% over the last 12-months to JPY46,250 per share from JPY15,740 per share a year ago. In this insight, we examine the company’s business model, key drivers, outlook, financials and valuation.

Baycurrent Consulting: Strong Fundamentals; Up Almost 200% and Further Upside Likely

<p><a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> offers outsourced software quality assurance and testing solutions to customers in the enterprise and entertainment markets in Japan. Shift is the market leader in the outsourced software testing service market in Japan with an estimated market share of 70%. The software testing market in Japan is estimated at JPY5.5 trn, however, only 1.0% of the market is currently outsourced while majority of software testing is carried out by in-house engineers at software development companies.</p><p>The company’s shares have rallied more than 80.0% since March this year significantly outperforming the market. In this insight, we examine Shift’s business model, segments, financials, management, outlook and valuation.</p>

Shift Inc (3697 JP) offers outsourced software quality assurance and testing solutions to customers in the enterprise and entertainment markets in Japan. Shift is the market leader in the outsourced software testing service market in Japan with an estimated market share of 70%. The software testing market in Japan is estimated at JPY5.5 trn, however, only 1.0% of the market is currently outsourced while majority of software testing is carried out by in-house engineers at software development companies.The company’s shares have rallied more than 80.0% since March this year significantly outperforming the market. In this insight, we examine Shift’s business model, segments, financials, management, outlook and valuation.

Shift Inc: Key Beneficiary of Shift in Software Testing Towards Outsourcing in Japan

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>For the week from 22-26 March, Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/yihai-int-l-holding-ltd" target="_blank" data-smartkarma-citation="entities:22803:1" rel="noopener">Yihai Int’L Holding (1579 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/sino-biopharmaceutical" target="_blank" data-smartkarma-citation="entities:230:1" rel="noopener">Sino Biopharmaceutical (1177 HK)</a>, <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> and <a href="https://www.smartkarma.com/entities/china-literature-ltd" target="_blank" data-smartkarma-citation="entities:24388:1" rel="noopener">China Literature (772 HK)</a>. Shorts increased in the Communication Services, Financials, Information Technology and Consumer Discretionary sectors.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/yaskawa-electric-corp" target="_blank" data-smartkarma-citation="entities:2458:1" rel="noopener">Yaskawa Electric (6506 JP)</a>, <a href="https://www.smartkarma.com/entities/base-inc" target="_blank" data-smartkarma-citation="entities:28353:1" rel="noopener">BASE Inc (4477 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a> and <a href="https://www.smartkarma.com/entities/peptidream-inc" target="_blank" data-smartkarma-citation="entities:13514:1" rel="noopener">Peptidream Inc (4587 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a>, <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a>, <a href="https://www.smartkarma.com/entities/pan-pacific-international-holdings-corporation" target="_blank" data-smartkarma-citation="entities:13475:1" rel="noopener">Pan Pacific International Holdings (7532 JP)</a>, <a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> and <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>. Shorts increased in the Industrials sectors, and decreased in the Financials, Communication Services and Health Care sectors.</p></div><div><p>In Korea, shorts decreased on <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics Co., (207940 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a> and <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> during the week. </p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/largan-precision-co-ltd" target="_blank" data-smartkarma-citation="entities:9126:1" rel="noopener">Largan Precision (3008 TT)</a>, <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a>, <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a> and <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/unimicron-technology-corp" target="_blank" data-smartkarma-citation="entities:18778:1" rel="noopener">Unimicron Technology (3037 TT)</a>, <a href="https://www.smartkarma.com/entities/elite-semiconductor-memory" target="_blank" data-smartkarma-citation="entities:9373:1" rel="noopener">Elite Semiconductor Memory (3006 TT)</a>, <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">AU Optronics (2409 TT)</a> and <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>. </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.For the week from 22-26 March, Hong Kong saw shorts rise on Baidu (9888 HK), Tencent Holdings (700 HK), Yihai Int’L Holding (1579 HK), Kuaishou Technology (1024 HK) and Lenovo (992 HK) while there was short covering on Meituan (3690 HK), Sino Biopharmaceutical (1177 HK), Haier Smart Home Co Ltd (6690 HK), JD.com Inc. (9618 HK) and China Literature (772 HK). Shorts increased in the Communication Services, Financials, Information Technology and Consumer Discretionary sectors.In Japan, stocks that saw the most shorts were Yaskawa Electric (6506 JP), BASE Inc (4477 JP), Toshiba Corp (6502 JP), Aeon Co Ltd (8267 JP) and Peptidream Inc (4587 JP) while shorts decreased on Takeda Pharmaceutical (4502 JP), Monex Group Inc (8698 JP), Pan Pacific International Holdings (7532 JP), Nexon (3659 JP) and Mizuho Financial Group (8411 JP). Shorts increased in the Industrials sectors, and decreased in the Financials, Communication Services and Health Care sectors.In Korea, shorts decreased on Celltrion Inc (068270 KS), Samsung Biologics Co., (207940 KS), Samsung Electronics (005930 KS), SK Hynix (000660 KS) and Hyundai Motor Co (005380 KS) during the week. Stocks in Taiwan that saw the highest increase in shorts were Largan Precision (3008 TT), Pegatron Corp (4938 TT), Yageo Corporation (2327 TT) and Novatek Microelectronics Corp (3034 TT) while shorts were covered on Unimicron Technology (3037 TT), Elite Semiconductor Memory (3006 TT), AU Optronics (2409 TT) and TSMC (2330 TT). 

Asia Short Interest: Baidu, Kuaishou, Smoore, Yaskawa, BASE, Toshiba, Celltrion, Samsung, Largan

Japan

GMO Payment Gateway, Inc. provides credit card transaction services for electronic commerce firms.

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GMO Payment Gateway (3769 JP)

Net Protections IPO – If You Buy Now You May Pay Later

Net Protections Holdings offers Japan’s largest BNPL service and the company has been growing steadily at a CAGR of just over 25% but we question...

Mio Kato

Shift 4Q: Growth Story Is Getting Stronger

Shift reported FY08/2021 results which saw revenues growing 60.2% YoY to JPY46.0bn from JPY28.7bn a year ago. Both revenue and OP beat its own...

Shifara Samsudeen, FCMA, CGMA

Baycurrent Consulting: Strong Fundamentals; Up Almost 200% and Further Upside Likely

BayCurrent offers consultancy services in Japan and stock price has been up almost 200% over the last 12-months. Covid-19 has accelerated DX in...

Shifara Samsudeen, FCMA, CGMA

Shift Inc: Key Beneficiary of Shift in Software Testing Towards Outsourcing in Japan

There is no evidence that Shift’s revenue growth is decelerating and as per consensus estimates, Shift’s revenues will hit JPY100bn by the end of...

Shifara Samsudeen, FCMA, CGMA

Asia Short Interest: Baidu, Kuaishou, Smoore, Yaskawa, BASE, Toshiba, Celltrion, Samsung, Largan

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

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