'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Quantitative Analysis

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/809/original/2019-08-04_13-24-01.png?1564892655" class="editor-image img-responsive" data-smartkarma-image-id="94809"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>SOUTHBOUND</strong> - Two weeks into the announcements of the June quarter-end period, it is clear that the momentum of Japanese listed corporate earnings is still heading lower. Since July 22nd, 1,216 or 32% of companies have reported results and 292 forecast revisions have been announced. The Japan Analytics Results &amp; Revision Score reached a new 28-month low on Friday of 1.43, a decline of 78% from the current cycle peak of 6.50 on 16th November 2017. The correlation between the Score and the Market Capitalisation of listed companies excluding REITs is 0.77, and the Score is more of a leading or co-incident than lagging indicator.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/810/original/2019-08-04_13-32-15.png?1564893149" class="editor-image img-responsive" data-smartkarma-image-id="94810"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/812/original/2019-08-04_13-39-03.png?1564893556" class="editor-image img-responsive" data-smartkarma-image-id="94812"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>BREAKDOWN</strong> - The Results &amp; Revision Score is a weighted sum of three components, the Results Score, the Annual Forecast/Revision Score and the Interim Forecast/Revision Score, with the last of these only being applicable for nine months of each year. The two Forecast/Revision Scores are, as would be expected., leading indicators for the Results Score. The current quarter's Results Scor decline already exceeds the previous quarter's more-benign decline which also saw an increase in the Annual Forecast/Revision Score as the majority of companies 'rolled' their forecast ahead by one year. In contrast, the forecasts for the Interim period which for most companies ends next month were the most pessimistic since April 2016 and the mostly first-quarter results are confirming the early caution. In addition, full-year forecasts are also being downgraded and are at the lowest level for three months.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/816/original/2019-08-04_13-44-46.png?1564893904" class="editor-image img-responsive" data-smartkarma-image-id="94816"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>YEN DRIVER</strong> - The key driver of the Results &amp; Revision Score has been the year-on-year change in the US dollar/Yen exchange rate lagged by six months. The major turning points in <a href="https://www.smartkarma.com/entities/22826" target="_blank" data-smartkarma-citation="entities:22826:1" rel="noopener">JUSDJPY CURNCY</a> over the last twelve years highlighted above line up well with changes in the direction of earnings momentum as represented by the Results &amp; Revision Score. With the Yen having reverted to a period of strengthening in recent weeks, the trend in the Score will be downwards over the next six months, which will be reflected in due course by the market.    </p><div class="content-highlight"><p>In the<strong> DETAIL</strong> section below, we update our Market Composite Results Timeline, Sector and Peer Group Results &amp; Revision Scores, Sector Performance and Valuation and look at the best and worst large-cap individual company results over the last two weeks. In the meantime, we lighten the mood with a classic Allman Brother track featuring the incomparable Dicky Betts.</p></div><center></center><div class="content-caption">The Allman Brothers Band - Southbound - 1/16/1982 - University Of Florida Bandshell</div>

Source: Japan AnalyticsSOUTHBOUND - Two weeks into the announcements of the June quarter-end period, it is clear that the momentum of Japanese listed corporate earnings is still heading lower. Since July 22nd, 1,216 or 32% of companies have reported results and 292 forecast revisions have been announced. The Japan Analytics Results &amp; Revision Score reached a new 28-month low on Friday of 1.43, a decline of 78% from the current cycle peak of 6.50 on 16th November 2017. The correlation between the Score and the Market Capitalisation of listed companies excluding REITs is 0.77, and the Score is more of a leading or co-incident than lagging indicator.Source: Japan AnalyticsBREAKDOWN - The Results &amp; Revision Score is a weighted sum of three components, the Results Score, the Annual Forecast/Revision Score and the Interim Forecast/Revision Score, with the last of these only being applicable for nine months of each year. The two Forecast/Revision Scores are, as would be expected., leading indicators for the Results Score. The current quarter's Results Scor decline already exceeds the previous quarter's more-benign decline which also saw an increase in the Annual Forecast/Revision Score as the majority of companies 'rolled' their forecast ahead by one year. In contrast, the forecasts for the Interim period which for most companies ends next month were the most pessimistic since April 2016 and the mostly first-quarter results are confirming the early caution. In addition, full-year forecasts are also being downgraded and are at the lowest level for three months.Source: Japan AnalyticsYEN DRIVER - The key driver of the Results &amp; Revision Score has been the year-on-year change in the US dollar/Yen exchange rate lagged by six months. The major turning points in JUSDJPY CURNCY over the last twelve years highlighted above line up well with changes in the direction of earnings momentum as represented by the Results &amp; Revision Score. With the Yen having reverted to a period of strengthening in recent weeks, the trend in the Score will be downwards over the next six months, which will be reflected in due course by the market.    In the DETAIL section below, we update our Market Composite Results Timeline, Sector and Peer Group Results &amp; Revision Scores, Sector Performance and Valuation and look at the best and worst large-cap individual company results over the last two weeks. In the meantime, we lighten the mood with a classic Allman Brother track featuring the incomparable Dicky Betts.The Allman Brothers Band - Southbound - 1/16/1982 - University Of Florida Bandshell

🇯🇵 Japan • Summer Results & Revisions First Cut - Southbound

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>Despite several indexes recently touching new 52+ week highs, broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) remain near logical resistance, and indicators continue to send mixed signals. As a result we are hesitant to get too bullish or bearish. Instead we want to focus on Sector/Group/industry themes where we bottoming price and RS, or attractive pullback opportunities within established price and RS uptrends.  In this report we highlight such opportunities, within the Technology, Consumer Staples and Services Sectors.</p>

Despite several indexes recently touching new 52+ week highs, broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) remain near logical resistance, and indicators continue to send mixed signals. As a result we are hesitant to get too bullish or bearish. Instead we want to focus on Sector/Group/industry themes where we bottoming price and RS, or attractive pullback opportunities within established price and RS uptrends.  In this report we highlight such opportunities, within the Technology, Consumer Staples and Services Sectors.

Global Equity Strategy: Not Too Bullish, Not Too Bearish

<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/080/230/original/2019-02-26_16-49-25.png?1551182690" class="editor-image img-responsive" data-smartkarma-image-id="80230"></figure>
<p>Source: Japan Analytics</p>
</div>
<p><strong>LARGE CAP RESULTS &amp; REVISION SCORES</strong> - The final instalment of our series of reviews of Japan's most recent earnings and revisions announcements covers the <strong>Results &amp; Revision Scores</strong> for Japan's 785 larger capitalisation companies with a market capitalisation of over ¥100b.</p>
<p>In the <strong>DETAIL</strong> section below we look at:- </p>
<ul>
<li>The 30 top and bottom-ranked companies by <strong>Results &amp; Revision Score</strong> as well as the top and bottom thirty ranked by change in score over the last quarter and provide brief comments on companies and topics of note.</li>
<li>By comparing Results Scores and Forecast/Revision Scores, we sort companies into<strong>'Optimists', 'Pessimists', 'Increasingly Optimistic' and 'Increasingly Pessimistic</strong>' categories.</li>
<li>As shown above, the relationship between the <strong>Results &amp; Revision Score</strong> <strong>(RRS)</strong> and our<strong> Relative Price Score (RPS)</strong> for each company and divide the large-cap universe into four 'quadrants' - <strong>'Contrarian Buy' </strong>(Low RRS &amp; Low RPS)<strong> , 'Contrarian Sell' </strong>(High RRS &amp; High RPS)<strong>, 'Peak Growth' </strong>(High RRS &amp; Low RPS) and<strong> 'Ex-Growth/Turnaround'</strong>  (Low RRS &amp; High RPS), highlighting the outliers in each quadrant.
<ul>
<li>In the two '<strong>Contrarian</strong>' quadrants, the market is aligned with the current earnings momentum of the companies suggesting opportunities exist only for those willing or brave enough to take a contrarian view. </li>
<li>For '<strong>Peak Growth</strong>', the market is calling for a downturn in momentum that has yet to be reflected in quarterly earnings. Where the cycle is more prolonged than expected, there are often opportunities for short-term rebounds in what are normally relatively-inexpensive companies.</li>
<li>The '<strong>Ex-Growth</strong>' quadrant often consists of former '<strong>Contrarian Sell</strong>'s where the market is reluctant to acknowledge that the cycle has turned. This quadrant can also contain '<strong>Turnarounds</strong>' - formerly '<strong>Contrarian Buys</strong>' where the market is correctly anticipating a change in fortunes.   </li>
</ul>
</li>
<li>Finally, we provide tables of the top and bottom five ranked companies in each of our <strong>30 Sectors</strong>.</li>
</ul>



Source: Japan Analytics

LARGE CAP RESULTS &amp; REVISION SCORES - The final instalment of our series of reviews of Japan's most recent earnings and revisions announcements covers the Results &amp; Revision Scores for Japan's 785 larger capitalisation companies with a market capitalisation of over ¥100b.
In the DETAIL section below we look at:- 

The 30 top and bottom-ranked companies by Results &amp; Revision Score as well as the top and bottom thirty ranked by change in score over the last quarter and provide brief comments on companies and topics of note.
By comparing Results Scores and Forecast/Revision Scores, we sort companies into'Optimists', 'Pessimists', 'Increasingly Optimistic' and 'Increasingly Pessimistic' categories.
As shown above, the relationship between the Results &amp; Revision Score (RRS) and our Relative Price Score (RPS) for each company and divide the large-cap universe into four 'quadrants' - 'Contrarian Buy' (Low RRS &amp; Low RPS) , 'Contrarian Sell' (High RRS &amp; High RPS), 'Peak Growth' (High RRS &amp; Low RPS) and 'Ex-Growth/Turnaround'  (Low RRS &amp; High RPS), highlighting the outliers in each quadrant.

In the two 'Contrarian' quadrants, the market is aligned with the current earnings momentum of the companies suggesting opportunities exist only for those willing or brave enough to take a contrarian view. 
For 'Peak Growth', the market is calling for a downturn in momentum that has yet to be reflected in quarterly earnings. Where the cycle is more prolonged than expected, there are often opportunities for short-term rebounds in what are normally relatively-inexpensive companies.
The 'Ex-Growth' quadrant often consists of former 'Contrarian Sell's where the market is reluctant to acknowledge that the cycle has turned. This quadrant can also contain 'Turnarounds' - formerly 'Contrarian Buys' where the market is correctly anticipating a change in fortunes.   


Finally, we provide tables of the top and bottom five ranked companies in each of our 30 Sectors.


🇯🇵 Japan • Winter Large Cap Results & Revision Scores - Contrarian Buys & Sells/​Peak & Ex-Growth

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>Denso is trading almost exactly in line with its average PE since 2010 at 15.6x while its close peer Aisin Seiki is also in line with its average PE 12.6x (vs. a 12.4x average). We would argue that given Denso's increasing importance as possibly THE centrepiece of Toyota's EV and ADAS/AD strategies, that the company deserves a larger premium vs. peers than its historical average. Relative to history as well, while we concede that short term cyclical concerns may warrant a discount, longer term growth prospects are, in our opinion, significantly stronger than they have been in many years, justifying an overall premium.</p><div class="content-caption"><strong>On Balance Long Term Growth Prospects Should Outweigh Near Term Cyclical Worries and Justify a Premium vs. History</strong></div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/035/120/original/Denso%20valuation.png?1507264792" class="editor-image img-responsive" data-smartkarma-image-id="35120"></figure><div style="text-align: left;" class="content-caption">Source: Bloomberg</div><p>In <a href="https://www.smartkarma.com/insights/boj-tankan-suggests-goldilocks-scenario-still-in-place-for-now" target="_blank" data-smartkarma-citation="insights:14134">BoJ Tankan Suggests Goldilocks Scenario Still in Place... For Now</a>, <a href="https://www.smartkarma.com/companies/322" target="_blank" data-smartkarma-citation="companies:322">Pelham Smithers Associates</a> highlighted Denso's underperformance vs. Topix over the last two years, picking the name as a potential play on Japan's resurgence. We concur and believe the company's long term prospects are extremely attractive. We would highlight Denso's position as the lone parts manufacturer in the new EV venture established by Toyota, Mazda and Denso, which is also likely to eventually include other Toyota-related OEMs such as Daihatsu, Hino, Subaru and Suzuki.</p><p>Our conversations with other suppliers such as Koito and Renesas suggested that while independent development efforts would continue, Denso could become the ultimate aggregator and coordinator of development efforts, acting as a key link between OEMs and parts suppliers. Its long history in both traditional autoparts and auto electronics, as well as its robotics expertise place Denso at the centre of the developing revolution in the auto industry and thus we consider the company to be likely to become one of, if not, the greatest beneficiary of the upheaval taking place. We had previously highlighted Toyota's place as the centre of Japan's auto industry in <a href="https://www.smartkarma.com/insights/toyota-completes-move-to-become-nexus-of-japan-auto-industry-with-suzuki-tie-up" target="_blank" data-smartkarma-citation="insights:9240">Toyota Completes Move to Become Nexus of Japan Auto Industry with Suzuki Tie-Up</a>. Denso now becomes the central conduit of this vast network of OEMs and suppliers.</p>

Denso is trading almost exactly in line with its average PE since 2010 at 15.6x while its close peer Aisin Seiki is also in line with its average PE 12.6x (vs. a 12.4x average). We would argue that given Denso's increasing importance as possibly THE centrepiece of Toyota's EV and ADAS/AD strategies, that the company deserves a larger premium vs. peers than its historical average. Relative to history as well, while we concede that short term cyclical concerns may warrant a discount, longer term growth prospects are, in our opinion, significantly stronger than they have been in many years, justifying an overall premium.On Balance Long Term Growth Prospects Should Outweigh Near Term Cyclical Worries and Justify a Premium vs. HistorySource: BloombergIn BoJ Tankan Suggests Goldilocks Scenario Still in Place... For Now, Pelham Smithers Associates highlighted Denso's underperformance vs. Topix over the last two years, picking the name as a potential play on Japan's resurgence. We concur and believe the company's long term prospects are extremely attractive. We would highlight Denso's position as the lone parts manufacturer in the new EV venture established by Toyota, Mazda and Denso, which is also likely to eventually include other Toyota-related OEMs such as Daihatsu, Hino, Subaru and Suzuki.Our conversations with other suppliers such as Koito and Renesas suggested that while independent development efforts would continue, Denso could become the ultimate aggregator and coordinator of development efforts, acting as a key link between OEMs and parts suppliers. Its long history in both traditional autoparts and auto electronics, as well as its robotics expertise place Denso at the centre of the developing revolution in the auto industry and thus we consider the company to be likely to become one of, if not, the greatest beneficiary of the upheaval taking place. We had previously highlighted Toyota's place as the centre of Japan's auto industry in Toyota Completes Move to Become Nexus of Japan Auto Industry with Suzuki Tie-Up. Denso now becomes the central conduit of this vast network of OEMs and suppliers.

Denso: Centrepiece of Toyota's ADAS/AD/EV Mantel Is a Conviction Buy

Making sense of the Global Market, Euromonitor International Ltd.

Yu Mitsuhashi

Making sense of the Global Market

Euromonitor International Ltd.

We are a global market research company focused on industries, countries, economies and consumers worldwide. Our cross-country comparable research helps your organisation identify opportunities and develop growth strategies in countries and regions across the globe. With offices around the world, 1,200 analysts in 100 countries and market research on every key trend and driver, we give you powerful access to the real story behind consumer change.

Thematic (Sector/Industry)

<p>In this second of a series of articles examining the FashionTech scene in Japan, Euromonitor International looks at Japanese FashionTech companies operating in BtoC areas, particularly via sharing economy and personalisation. For the first article, please click <a href="https://www.smartkarma.com/insights/can-tech-save-the-declining-japanese-apparel-industry-fashiontech-series-1-3" target="_blank">here</a>.</p>

In this second of a series of articles examining the FashionTech scene in Japan, Euromonitor International looks at Japanese FashionTech companies operating in BtoC areas, particularly via sharing economy and personalisation. For the first article, please click here.

Can Tech Save The Declining Japanese Apparel Industry? Fashion-Tech Series (2/3)

Japan

IBIDEN CO, LTD. develops, produces, and markets ceramics, housing materials, and electronics.  The Company's products include printed circuit boards (PCB), graphite specialties, integrated circuit (IC) packages, ceramic fibers, melamine decorative high-pressure laminates, and pre-cut structural materials.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Ibiden Co Ltd (4062 JP)

🇯🇵 Japan • Summer Results & Revisions First Cut - Southbound

SOUTHBOUND - Two weeks into the announcements of the June quarter-end period, it is clear that the momentum of Japanese listed corporate earnings...

Campbell Gunn

Global Equity Strategy: Not Too Bullish, Not Too Bearish

Despite several indexes recently touching new 52+ week highs, broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) remain near logical...

Vermilion Research

🇯🇵 Japan • Winter Large Cap Results & Revision Scores - Contrarian Buys & Sells/Peak & Ex-Growth

LARGE CAP RESULTS & REVISION SCORES - The final instalment of our series of reviews of Japan's most recent earnings and revisions...

Campbell Gunn

Denso: Centrepiece of Toyota's ADAS/AD/EV Mantel Is a Conviction Buy

Denso is trading almost exactly in line with its average PE since 2010 at 15.6x while its close peer Aisin Seiki is also in line with its average...

Mio Kato

Can Tech Save The Declining Japanese Apparel Industry? Fashion-Tech Series (2/3)

In this second of a series of articles examining the FashionTech scene in Japan, Euromonitor International looks at Japanese FashionTech companies...

Euromonitor International Ltd.

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

🇯🇵 Japan • Summer Results & Revisions First Cut - Southbound

SOUTHBOUND - Two weeks into the announcements of the June quarter-end period, it is clear that the momentum of Japanese listed corporate earnings...

Campbell Gunn

Global Equity Strategy: Not Too Bullish, Not Too Bearish

Despite several indexes recently touching new 52+ week highs, broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) remain near logical...

Vermilion Research

🇯🇵 Japan • Winter Large Cap Results & Revision Scores - Contrarian Buys & Sells/​Peak & Ex-Growth

LARGE CAP RESULTS & REVISION SCORES - The final instalment of our series of reviews of Japan's most recent earnings and revisions...

Campbell Gunn

Denso: Centrepiece of Toyota's ADAS/AD/EV Mantel Is a Conviction Buy

Denso is trading almost exactly in line with its average PE since 2010 at 15.6x while its close peer Aisin Seiki is also in line with its average...

Mio Kato

Can Tech Save The Declining Japanese Apparel Industry? Fashion-Tech Series (2/3)

In this second of a series of articles examining the FashionTech scene in Japan, Euromonitor International looks at Japanese FashionTech companies...

Euromonitor International Ltd.

🇯🇵 Japan • Winter Large Cap Results & Revision Scores - Contrarian Buys & Sells/Peak & Ex-Growth