Equity Analyst, LightStream Research

Farha Sabri

Equity Analyst

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

<ul>
<li>Sony’s revenue for the quarter fell by 10.1% YoY to JPY2,401.8bn while company’s OP saw a 7.5% YoY growth in 3QFY03/19. </li>
<li>Sony downgraded its FY03/19 revenue guidance following the third quarter's earnings results. The company expects to make revenue worth JPY8,500bn for FY03/19, a 2.3% decrease from the October forecast. Sony’s OP forecast for the year still remains at JPY870.0bn.</li>
<li>Following the 3QFY03/19 earnings release, the company announced that it would buyback JPY100bn worth of its own stock starting Tuesday and lasting until the 22nd of March. </li>
<li>As per consensus expectations, Sony is currently trading at a FY1 PE multiple of 7.6x, significantly lower than its historical median of 19.7x.</li>
</ul>


Sony’s revenue for the quarter fell by 10.1% YoY to JPY2,401.8bn while company’s OP saw a 7.5% YoY growth in 3QFY03/19. 
Sony downgraded its FY03/19 revenue guidance following the third quarter's earnings results. The company expects to make revenue worth JPY8,500bn for FY03/19, a 2.3% decrease from the October forecast. Sony’s OP forecast for the year still remains at JPY870.0bn.
Following the 3QFY03/19 earnings release, the company announced that it would buyback JPY100bn worth of its own stock starting Tuesday and lasting until the 22nd of March. 
As per consensus expectations, Sony is currently trading at a FY1 PE multiple of 7.6x, significantly lower than its historical median of 19.7x.


Sony Revises FY03/19 Guidance Downwards; Management Announces a Surprise Buyback

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Multiple news article mentioned SK Hynix' weak Q4 2018 numbers due to the slowdown in the smartphone markets but the fact remains that:<ol>
<li>smartphone is the dominant communication tools</li>
<li>smartphone penetration still has room to grow</li>
<li>current model of smartphone is likely to remain the same for the next foreseeable future</li>
<li>lower end smartphones will likely be the next growth driver</li>
</ol>In this report we will discuss the following:<ol>
<li>Q4 2018 result</li>
<li>Price action in 2018</li>
<li>Margin comparison with the peers</li>
<li>Exposure to the growing affordable smartphone segment</li>
</ol>

Multiple news article mentioned SK Hynix' weak Q4 2018 numbers due to the slowdown in the smartphone markets but the fact remains that:
smartphone is the dominant communication tools
smartphone penetration still has room to grow
current model of smartphone is likely to remain the same for the next foreseeable future
lower end smartphones will likely be the next growth driver
In this report we will discuss the following:
Q4 2018 result
Price action in 2018
Margin comparison with the peers
Exposure to the growing affordable smartphone segment


Diversified Industries

Avi Dalfen

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

Thematic (Sector/Industry)

Highlights of significant recent happenings include:
<div>
<ol>
<li>
Substantive Deep Dive - Canada's <a href="https://www.smartkarma.com/entities/25472" target="_blank" data-smartkarma-citation="entities:25472:1">BlackBerry Ltd (BB CN)</a> seeks to be the go-to provider of web Security: Why we believe investors should look at Blackberry as a way to hedge their exposures to the increasing list of companies who are susceptible to adverse impact from security breaches. </li>
<li>
Feeding the Dragon - Chinese buying of US firms brakes abruptly, obliterating the long-term trend, and now Japan has become the second-largest market for outbound M&amp;A globally. Also, South Korean food giant <a href="https://www.smartkarma.com/entities/1970" target="_blank" data-smartkarma-citation="entities:1970:1">Cj Cheiljedang (097950 KS)</a>  is continuing its aggressive expansion into the U.S. market</li>
<li> Local News on Global Companies –  <a href="https://www.smartkarma.com/entities/20824" target="_blank" data-smartkarma-citation="entities:20824:1">Kroger Co (KR US)</a> and <a href="https://www.smartkarma.com/entities/15273" target="_blank" data-smartkarma-citation="entities:15273:1">Microsoft Corp (MSFT US)</a> take on <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon.com Inc (AMZN US)</a> with digital grocery store experiment. “<a href="https://www.smartkarma.com/entities/11134" target="_blank" data-smartkarma-citation="entities:11134:1">Wal Mart Stores (WMT US)</a> plans to have enough online grocery pickup sites to cover 69% of U.S. households by the end of this month. <a href="https://www.smartkarma.com/entities/11369" target="_blank" data-smartkarma-citation="entities:11369:1">Alphabet Inc Cl C (GOOG US)</a>'s proposes a “software-defined network” which is a new method of accessing the internet by removing the need for home routers, for the new Toronto neighbourhood it is planning. Mining companies are cutting back operations in largest coal region in the U.S., and <a href="https://www.smartkarma.com/entities/1044" target="_blank" data-smartkarma-citation="entities:1044:1">Berkshire Hathaway Inc Cl A (BRK/A US)</a>, and <a href="https://www.smartkarma.com/entities/4124" target="_blank" data-smartkarma-citation="entities:4124:1">Union Pacific (UNP US)</a> will be adversely impacted.</li>
</ol>
</div>

Highlights of significant recent happenings include:



Substantive Deep Dive - Canada's BlackBerry Ltd (BB CN) seeks to be the go-to provider of web Security: Why we believe investors should look at Blackberry as a way to hedge their exposures to the increasing list of companies who are susceptible to adverse impact from security breaches. 

Feeding the Dragon - Chinese buying of US firms brakes abruptly, obliterating the long-term trend, and now Japan has become the second-largest market for outbound M&amp;A globally. Also, South Korean food giant Cj Cheiljedang (097950 KS)  is continuing its aggressive expansion into the U.S. market
 Local News on Global Companies –  Kroger Co (KR US) and Microsoft Corp (MSFT US) take on Amazon.com Inc (AMZN US) with digital grocery store experiment. “Wal Mart Stores (WMT US) plans to have enough online grocery pickup sites to cover 69% of U.S. households by the end of this month. Alphabet Inc Cl C (GOOG US)'s proposes a “software-defined network” which is a new method of accessing the internet by removing the need for home routers, for the new Toronto neighbourhood it is planning. Mining companies are cutting back operations in largest coal region in the U.S., and Berkshire Hathaway Inc Cl A (BRK/A US), and Union Pacific (UNP US) will be adversely impacted.



Business Happenings in the Americas that May Be “Below the Radar” - Week Ending January 17, 2019

'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/000/073/556/original/Update.png?1545212207" class="editor-image img-responsive" data-smartkarma-image-id="73556"></figure>
<div class="content-caption">Source: Japan Analytics</div>
JAPAN CORPORATE CASH FLOW UPDATE - This insight updates our previous Insight <a href="https://www.smartkarma.com/insights/japan-quarterly-cash-flow-update-yen-weakens-normal-service-resumed" target="_blank" data-smartkarma-citation="insights:23357">Yen Weakens &gt; Normal Service Resumed</a> with data from all of the most quarterly reports filed last month. Our aggregate cash flow model reformulated cash flows into eight categories which sum to Change in Cash - Free Cash Flow (Operating Cash Flow less Investing Cash Flow), Financing Cash Flow, Shareholder Cash Flow (Equity Cash Flow and Dividend Cash Flow) and Minorities. In the last three months, Japan's non-financial companies generated ¥12.1t in Operating Cash Flow while investing ¥9.2t - the largest quarterly amount of capex since 2016-Q4.  Of the total ¥2.9t in Free Cash Flow, 65% was returned to shareholders of which half was in the form of reductions in equity - an improving and welcome trend which we covered in an earlier <a href="https://www.smartkarma.com/insights/japan-share-buybacks-less-than-meets-the-eye" target="_blank" data-smartkarma-citation="insights:22599">Insight</a>. After a ¥0.8t increase in debt and a ¥0.3t increase in Minorities Cash Flow, aggregate cash rose by ¥2.2t for the quarter. Since 2011-Q4, 58% of the ¥102.7t in cumulative FCF has been allocated to shareholders and 40% to cash, leaving considerable room for improvement in the relative size of these ratios.
SECTORS &amp; STOCKS - In the DETAIL below, we also look at sector cash flow trends and provide brief comments on some of the most significant changes in individual cash flows over the last three months including <a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">Softbank Group (9984 JP)</a>, <a href="https://www.smartkarma.com/entities/3548" target="_blank" data-smartkarma-citation="entities:3548:1">Kawasaki Kisen Kaisha (9107 JP)</a>, <a href="https://www.smartkarma.com/entities/2818" target="_blank" data-smartkarma-citation="entities:2818:1">Hanwa (8078 JP)</a>, <a href="https://www.smartkarma.com/entities/19550" target="_blank" data-smartkarma-citation="entities:19550:1">Open House (3288 JP)</a>, <a href="https://www.smartkarma.com/entities/26074" target="_blank" data-smartkarma-citation="entities:26074:1">Macnica Fuji Electronics (3132 JP)</a>, and <a href="https://www.smartkarma.com/entities/13747" target="_blank" data-smartkarma-citation="entities:13747:1">Digital Garage (4819 JP)</a>.


Source: Japan Analytics
JAPAN CORPORATE CASH FLOW UPDATE - This insight updates our previous Insight Yen Weakens &gt; Normal Service Resumed with data from all of the most quarterly reports filed last month. Our aggregate cash flow model reformulated cash flows into eight categories which sum to Change in Cash - Free Cash Flow (Operating Cash Flow less Investing Cash Flow), Financing Cash Flow, Shareholder Cash Flow (Equity Cash Flow and Dividend Cash Flow) and Minorities. In the last three months, Japan's non-financial companies generated ¥12.1t in Operating Cash Flow while investing ¥9.2t - the largest quarterly amount of capex since 2016-Q4.  Of the total ¥2.9t in Free Cash Flow, 65% was returned to shareholders of which half was in the form of reductions in equity - an improving and welcome trend which we covered in an earlier Insight. After a ¥0.8t increase in debt and a ¥0.3t increase in Minorities Cash Flow, aggregate cash rose by ¥2.2t for the quarter. Since 2011-Q4, 58% of the ¥102.7t in cumulative FCF has been allocated to shareholders and 40% to cash, leaving considerable room for improvement in the relative size of these ratios.
SECTORS &amp; STOCKS - In the DETAIL below, we also look at sector cash flow trends and provide brief comments on some of the most significant changes in individual cash flows over the last three months including Softbank Group (9984 JP), Kawasaki Kisen Kaisha (9107 JP), Hanwa (8078 JP), Open House (3288 JP), Macnica Fuji Electronics (3132 JP), and Digital Garage (4819 JP).

Japan: The 2018-Q3 Cash Flow Stakes - Runners, Riders & Red Flags

Japan TMT Analyst

Pelham Smithers

Market Intel on Asian Tech with a Japan focus

Pelham Smithers Associates

Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods. 

Research is provided by the following:
Pelham Smithers: Macro, consumer electronics, telecoms & pharma
Joel Scheiman: Electronics materials / components
Julie Boote: Autos
Will Nestuk: Capital goods, machinery & transportation equipment parts
Thao Nguyen: eCommerce, internet content, marketing & advertising

The market has assumed that Mixi not only can't replicate the success of Monster Strike but will continue to waste the proceeds trying. That no longer appears to be the case, with the result that Mixi looks to be one of the bigger bargains in the bargain-rich Japanese stock market right now.

The market has assumed that Mixi not only can't replicate the success of Monster Strike but will continue to waste the proceeds trying. That no longer appears to be the case, with the result that Mixi looks to be one of the bigger bargains in the bargain-rich Japanese stock market right now.

Mixi (2121 JP) - When You've Got a Golden Goose...

Japan

Sony Corporation manufactures audio, home video game consoles, communications, key device and information technology products for the consumer and professional markets.  The Company's other businesses include music, pictures, computer entertainment, and online businesses.

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Sony Corp (6758 JP)

Sony Revises FY03/19 Guidance Downwards; Management Announces a Surprise Buyback

Sony’s revenue for the quarter fell by 10.1% YoY to JPY2,401.8bn while company’s OP saw a 7.5% YoY growth in 3QFY03/19. Sony downgraded its...

Farha Sabri

SK Hynix: Attractive at Current Level

Multiple news article mentioned SK Hynix' weak Q4 2018 numbers due to the slowdown in the smartphone markets but the fact remains that: smartphone...

Henry Soediarko

Business Happenings in the Americas that May Be “Below the Radar” - Week Ending January 17, 2019

Highlights of significant recent happenings include: Substantive Deep Dive - Canada's BlackBerry Ltd (BB CN) seeks to be the go-to provider...

Avi Dalfen

Japan: The 2018-Q3 Cash Flow Stakes - Runners, Riders & Red Flags

JAPAN CORPORATE CASH FLOW UPDATE - This insight updates our previous Insight Yen Weakens > Normal Service Resumed with data from all of the...

Campbell Gunn

Mixi (2121 JP) - When You've Got a Golden Goose...

The market has assumed that Mixi not only can't replicate the success of Monster Strike but will continue to waste the proceeds trying. That no...

Pelham Smithers Associates

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