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>Part of our thesis on Toyota is that the company is going through a transformation from being just the ever-reliable auto manufacturer it has been to a much more rounded company with more appealing designs and a far stronger ability to build emotional connections with its customers. To illustrate this, we examine some of Toyota’s commercials and the communications from CEO Akio Toyoda.</p>

Part of our thesis on Toyota is that the company is going through a transformation from being just the ever-reliable auto manufacturer it has been to a much more rounded company with more appealing designs and a far stronger ability to build emotional connections with its customers. To illustrate this, we examine some of Toyota’s commercials and the communications from CEO Akio Toyoda.

Toyota – Superbowl Commercials and the Evolution of Toyota

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Thematic (Sector/Industry)

<div><p style="text-align: center;"><strong>• RESULTS &amp; REVISIONS SUMMARY - 4th FEBRUARY •</strong></p></div><div><p>Of Thursday's 151 results announcements, 69% scored positively for earnings momentum despite trailing revenues falling by 5.1% on average and a 0.8 percentage point decline in operating margins. 12% of companies were in the red for the quarter.  63% of the 64 annual forecasts/revision announcements scored positively, and the average Forecast/Revision score was +2.1 points.</p></div><div>
<p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p>
<p style="text-align: left;">Thursday's 'best' large-cap announcements were <a href="https://www.smartkarma.com/entities/ibiden-co-ltd" target="_blank" data-smartkarma-citation="entities:16630:1" rel="noopener">Ibiden (4062 JP)</a>, <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>, and <a href="https://www.smartkarma.com/entities/ntt-data-corp" target="_blank" data-smartkarma-citation="entities:11232:1" rel="noopener">NTT Data (9613 JP)</a>. The 'worst' came from <a href="https://www.smartkarma.com/entities/mitsubishi-ufj-financial-group" target="_blank" data-smartkarma-citation="entities:218:1" rel="noopener">MUFG (8306 JP)</a>, <a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank (9434 JP)</a>, and <a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari (4385 JP)</a>.   </p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/914/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186914"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/912/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186912"></figure></section><section class="figure"><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/913/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186913"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/911/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186911"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/910/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186910"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/915/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186915"></figure></section></section>
</div><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div>

• RESULTS &amp; REVISIONS SUMMARY - 4th FEBRUARY •Of Thursday's 151 results announcements, 69% scored positively for earnings momentum despite trailing revenues falling by 5.1% on average and a 0.8 percentage point decline in operating margins. 12% of companies were in the red for the quarter.  63% of the 64 annual forecasts/revision announcements scored positively, and the average Forecast/Revision score was +2.1 points.
• BEST &amp; WORST •
Thursday's 'best' large-cap announcements were Ibiden (4062 JP), Takeda Pharmaceutical (4502 JP), and NTT Data (9613 JP). The 'worst' came from MUFG (8306 JP), Softbank (9434 JP), and Mercari (4385 JP).   

Source for all charts &amp; tables: Japan Analytics

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​02/​​​​​​​​​​​​​​​​04 Ibiden, Takeda.

<p>Mercari reported ¥26bn in revenue for 2Q coming in a touch above consensus at ¥25.3bn and also beat at the OP level, generating ¥1.0bn despite significantly boosting promotional spending in Japan. Consensus was at ¥0.87bn. These are positive results but we feel momentum should accelerate throughout the year.</p>

Mercari reported ¥26bn in revenue for 2Q coming in a touch above consensus at ¥25.3bn and also beat at the OP level, generating ¥1.0bn despite significantly boosting promotional spending in Japan. Consensus was at ¥0.87bn. These are positive results but we feel momentum should accelerate throughout the year.

Mercari – Small Beat and Good Underlying Trends

<p>After a bit of a hibernation period, down 24% between 15 Oct and Christmas, Mercari has started to move again, up 25% in the 12 trading days since. We remain highly positive on our top conviction call from last year and believe strong recent momentum should continue as the Japanese business continues to grow and the US business starts to be valued increasingly highly, especially now that there are clearer benchmarks such as Poshmark.</p>

After a bit of a hibernation period, down 24% between 15 Oct and Christmas, Mercari has started to move again, up 25% in the 12 trading days since. We remain highly positive on our top conviction call from last year and believe strong recent momentum should continue as the Japanese business continues to grow and the US business starts to be valued increasingly highly, especially now that there are clearer benchmarks such as Poshmark.

Mercari – If Mercari Traded Up to Poshmark’s 30x EV/Sales You Would Make 184%

Equity Capital Markets

<p>Poshmark’s business model appears to be well positioned to benefit from the trends towards online shopping, social and second-hand purchases. We do, however, have concerns about the company’s ability to break out of this niche to expand its TAM, particularly when its take rate is higher than peers.</p>

Poshmark’s business model appears to be well positioned to benefit from the trends towards online shopping, social and second-hand purchases. We do, however, have concerns about the company’s ability to break out of this niche to expand its TAM, particularly when its take rate is higher than peers.

Japan

Mercari, Inc. operates as an electronic commercial company. The Company offers electronic commercial software, operation management, marketing planning, and other marketplace services. Mercari serves customers worldwide.

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Mercari (4385 JP)

Toyota – Superbowl Commercials and the Evolution of Toyota

On the day the Nikkei recovered the 30,000 level after three decades we look at the evolution of Toyota's image and character, and Japan's new...

Mio Kato

🇯🇵 JAPAN • Results & Revisions 02/04 Ibiden, Takeda.

Of Thursday's 151 results announcements, 69% scored positively for earnings momentum despite trailing revenues falling by 5.1% on average and a 0.8...

Campbell Gunn

Mercari – Small Beat and Good Underlying Trends

Mercari posted decent 2Q results and is now intent on increasing take rates in the US and expanding monetisation of Merpay, pointing to significant...

Mio Kato

Mercari – If Mercari Traded Up to Poshmark’s 30x EV/Sales You Would Make 184%

Mercari doubled in 2020 as its Japanese business grew quickly and the US operations started to show genuine promise. We believe this is just the...

Mio Kato

Poshmark - Second-Hand Fashion

Poshmark’s leverage into online shopping, social and second-hand purchases are attractive, but will it be able to break out of its niche to expand...

Mio Kato

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52-week Range

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Toyota – Superbowl Commercials and the Evolution of Toyota

On the day the Nikkei recovered the 30,000 level after three decades we look at the evolution of Toyota's image and character, and Japan's new...

Mio Kato

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​02/​​​​​​​​​​​​​​​​04 Ibiden, Takeda.

Of Thursday's 151 results announcements, 69% scored positively for earnings momentum despite trailing revenues falling by 5.1% on average and a 0.8...

Campbell Gunn

Mercari – Small Beat and Good Underlying Trends

Mercari posted decent 2Q results and is now intent on increasing take rates in the US and expanding monetisation of Merpay, pointing to significant...

Mio Kato

Mercari – If Mercari Traded Up to Poshmark’s 30x EV/Sales You Would Make 184%

Mercari doubled in 2020 as its Japanese business grew quickly and the US operations started to show genuine promise. We believe this is just the...

Mio Kato

Poshmark - Second-Hand Fashion

Poshmark’s leverage into online shopping, social and second-hand purchases are attractive, but will it be able to break out of its niche to expand...

Mio Kato

🇯🇵 JAPAN • Results & Revisions 02/04 Ibiden, Takeda.