'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Thematic (Sector/Industry)

• BEST &amp; WORST •Our 'best' and 'worst' pairing from Monday's announcements is 'social e-commerce' business <a href="https://www.smartkarma.com/entities/enigmo-inc" target="_blank" data-smartkarma-citation="entities:7036:1" rel="noopener">Enigmo (3665 JP)</a> and tech and auto materials company <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR (4185 JP)</a> which has seen a 35-40% slump in auto-related demand. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/159/000/original/2020-09-15_05-00-30.png?1600113643" class="editor-image img-responsive" data-smartkarma-image-id="159000"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/159/001/original/2020-09-15_05-08-17.png?1600114115" class="editor-image img-responsive" data-smartkarma-image-id="159001"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div><hr>DAILY STATS<hr>IMPROVING -37% of quarterly results, 61% of annual forecasts/revisions and 40% of interim forecasts have negative Scores. Only 10% of companies reporting lost money for the quarter. Most of the Results metrics were positive for the first time in many months; revisions are still trending negatively.41 Quarterly Results<div><ul style="list-style-type: disc;">
<li>
Results Score: 44% Positive / 20% Neutral / 37% Negative</li>
<li>
Average Results Score Change: +0.9 points</li>
<li>
Average % Change in Revenue: +5.8% Quarter YoY / +5.6% Rolling TTM YoY </li>
<li>
Average Operating Profit Margin Change: 1.5ppt</li>
<li>
Percentage Making Quarterly Losses: 10%</li>
</ul></div><hr><div>23 Annual • 10 Interim Forecasts/Revisions</div><div><ul style="list-style-type: disc;">
<li>Annual Forecast/Revision Score: 22% Positive / 17% Neutral / 61% Negative</li>
<li>Interim Forecast/Revision Score Change: 50% Positive / 10% Neutral / 40% Negative</li>
<li>Average Forecast/Revision Score Change: -3.5 points</li>
</ul></div>

• BEST &amp; WORST •Our 'best' and 'worst' pairing from Monday's announcements is 'social e-commerce' business Enigmo (3665 JP) and tech and auto materials company JSR (4185 JP) which has seen a 35-40% slump in auto-related demand. Source for all charts &amp; tables: Japan AnalyticsDAILY STATSIMPROVING -37% of quarterly results, 61% of annual forecasts/revisions and 40% of interim forecasts have negative Scores. Only 10% of companies reporting lost money for the quarter. Most of the Results metrics were positive for the first time in many months; revisions are still trending negatively.41 Quarterly Results

Results Score: 44% Positive / 20% Neutral / 37% Negative

Average Results Score Change: +0.9 points

Average % Change in Revenue: +5.8% Quarter YoY / +5.6% Rolling TTM YoY 

Average Operating Profit Margin Change: 1.5ppt

Percentage Making Quarterly Losses: 10%
23 Annual • 10 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 22% Positive / 17% Neutral / 61% Negative
Interim Forecast/Revision Score Change: 50% Positive / 10% Neutral / 40% Negative
Average Forecast/Revision Score Change: -3.5 points


🇯🇵 JAPAN • Results & Revisions 09/​​​​​​14 - Tsuruha, Kura Sushi, Arcland Sakamoto, JSR

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

<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> is Japan’s largest retail conglomerate by revenues but it struggles to make respectable profits.Now, as with Seven-Eleven at <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, Aeon may have found the high margin star subsidiary it has been looking for: Welcia Holdings.Welcia is the country’s leading drugstore chain and is growing strongly, exceeding ¥1 trillion in sales for the first time and forecasting an increase to ¥1.8 trillion through 2023.Last year, it made almost as much profit as the whole of Aeon combined but there are plenty of opportunities to extract more profit from this sector.Like most Japanese drugstore stocks, Welcia is currently trading at historically high levels thanks to a surge in sales from March onwards (see below for details)  but with more consolidation coming in the sector led by the leaders, Welcia is a solid buy when dips in the market provide an opportunity.

Aeon Co Ltd (8267 JP) is Japan’s largest retail conglomerate by revenues but it struggles to make respectable profits.Now, as with Seven-Eleven at Seven &amp; I Holdings (3382 JP), Aeon may have found the high margin star subsidiary it has been looking for: Welcia Holdings.Welcia is the country’s leading drugstore chain and is growing strongly, exceeding ¥1 trillion in sales for the first time and forecasting an increase to ¥1.8 trillion through 2023.Last year, it made almost as much profit as the whole of Aeon combined but there are plenty of opportunities to extract more profit from this sector.Like most Japanese drugstore stocks, Welcia is currently trading at historically high levels thanks to a surge in sales from March onwards (see below for details)  but with more consolidation coming in the sector led by the leaders, Welcia is a solid buy when dips in the market provide an opportunity.

<a href="https://www.smartkarma.com/entities/kirindo-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20564:1" rel="noopener">Kirindo Holdings (3194 JP)</a> is now the dominant drugstore chain in Kansai and this position gives it a base to build further.Over the next three years, the company plans to expand its range of own brands, particularly in cosmetics and health foods, and to increase the proportion of its nearly 400 stores that offer prescription drug services.This, Kirindo hopes, will grow sales by 12% through FY2022, but it is targeting profits up by 70% in the same period.Given its strong share in the Kansai market, Kirindo could also become a takeover target in the longer-term war for national dominance. For more on the expected increase in M&amp;A activity in the drugstore market, please see our indepth review of the sector: <a href="https://www.smartkarma.com/insights/japanese-drugstores-with-maturity-comes-marriage" target="_blank" rel="noopener">Japanese drugstores: with maturity comes marriage.</a>

Kirindo Holdings (3194 JP) is now the dominant drugstore chain in Kansai and this position gives it a base to build further.Over the next three years, the company plans to expand its range of own brands, particularly in cosmetics and health foods, and to increase the proportion of its nearly 400 stores that offer prescription drug services.This, Kirindo hopes, will grow sales by 12% through FY2022, but it is targeting profits up by 70% in the same period.Given its strong share in the Kansai market, Kirindo could also become a takeover target in the longer-term war for national dominance. For more on the expected increase in M&amp;A activity in the drugstore market, please see our indepth review of the sector: Japanese drugstores: with maturity comes marriage.

Kirindo Establishing Drugstore Dominance in Kansai

Inevitably, inbound tourist numbers plummeted in March which meant that spending overall also collapsed. The good news, though, is that those who did brave travel made the most of it and spent lavishly. Not enough to help retailers such as department stores and drugstores fill the hole though.

Inevitably, inbound tourist numbers plummeted in March which meant that spending overall also collapsed. The good news, though, is that those who did brave travel made the most of it and spent lavishly. Not enough to help retailers such as department stores and drugstores fill the hole though.

Japan Inbound Traffic Down 93% in March but Arrivals Spend and Spend

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

The global rally appears to be losing steam as the bearish rising wedge patterns we highlighted last week in the MSCI ACWI, ACWI ex-US, EM, and EAFE indexes ended up breaking down. Additionally, the aforementioned indexes and major indexes in Europe, Japan, and Hong Kong have been unable to break above longer-term resistance. While we believe global equities remain vulnerable to a pullback, some near-term consolidation is another possibility. For now we believe some consolidation makes sense as we remain in a sort of wait-and-see period as it relates to what will happen as countries and states aim to re-open.

The global rally appears to be losing steam as the bearish rising wedge patterns we highlighted last week in the MSCI ACWI, ACWI ex-US, EM, and EAFE indexes ended up breaking down. Additionally, the aforementioned indexes and major indexes in Europe, Japan, and Hong Kong have been unable to break above longer-term resistance. While we believe global equities remain vulnerable to a pullback, some near-term consolidation is another possibility. For now we believe some consolidation makes sense as we remain in a sort of wait-and-see period as it relates to what will happen as countries and states aim to re-open.

Global Equity Rally Losing Upside Momentum

Japan

TSURUHA HOLDINGS INC. is a holding company which manages subsidiaries that operate drug stores in Hokkaido and the Tohoku area.  The Company's product line includes drugs, cosmetics, and household utensils.

Price Gauge
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Tsuruha Holdings (3391 JP)

🇯🇵 JAPAN • Results & Revisions 09/14 - Tsuruha, Kura Sushi, Arcland Sakamoto, JSR

• BEST & WORST • DAILY STATS PERCENTAGES -50% of quarterly results, 66% of annual forecasts/revisions and 69% of interim forecasts...

Campbell Gunn

Welcia: Aeon’s Profit Machine

Aeon Co Ltd (8267 JP) is Japan’s largest retail conglomerate by revenues but it struggles to make respectable profits.Now, as with Seven-Eleven at...

Michael Causton

Kirindo Establishing Drugstore Dominance in Kansai

Kirindo Holdings (3194 JP) is now the dominant drugstore chain in Kansai and this position gives it a base to build further.Over the next three...

Michael Causton

Japan Inbound Traffic Down 93% in March but Arrivals Spend and Spend

Inevitably, inbound tourist numbers plummeted in March which meant that spending overall also collapsed. The good news, though, is that those who...

Michael Causton

Global Equity Rally Losing Upside Momentum

The global rally appears to be losing steam as the bearish rising wedge patterns we highlighted last week in the MSCI ACWI, ACWI ex-US, EM, and...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

🇯🇵 JAPAN • Results & Revisions 09/​​​​​​14 - Tsuruha, Kura Sushi, Arcland Sakamoto, JSR

• BEST & WORST • DAILY STATS PERCENTAGES -50% of quarterly results, 66% of annual forecasts/revisions and 69% of interim forecasts...

Campbell Gunn

Welcia: Aeon’s Profit Machine

Aeon Co Ltd (8267 JP) is Japan’s largest retail conglomerate by revenues but it struggles to make respectable profits.Now, as with Seven-Eleven at...

Michael Causton

Kirindo Establishing Drugstore Dominance in Kansai

Kirindo Holdings (3194 JP) is now the dominant drugstore chain in Kansai and this position gives it a base to build further.Over the next three...

Michael Causton

Japan Inbound Traffic Down 93% in March but Arrivals Spend and Spend

Inevitably, inbound tourist numbers plummeted in March which meant that spending overall also collapsed. The good news, though, is that those who...

Michael Causton

Global Equity Rally Losing Upside Momentum

The global rally appears to be losing steam as the bearish rising wedge patterns we highlighted last week in the MSCI ACWI, ACWI ex-US, EM, and...

Vermilion Research

🇯🇵 JAPAN • Results & Revisions 09/14 - Tsuruha, Kura Sushi, Arcland Sakamoto, JSR