'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)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/015/original/2020-09-19_10-11-42.png?1600477913" class="editor-image img-responsive" data-smartkarma-image-id="160015"></figure><p><strong>NEW 2-YEAR $ HIGH?</strong> - With the Yen on a tear against the US Dollar and the TOPIX index focused more on the inauguration of the Suga-era rather than NASDAQ, TOPIX in US dollars terms is within 1.2% of a new two-year high and is 36% above the March low. A supporting factor has been the Bank of Japan's ETF purchase program which now appears to be anticipating currency-induced declines, rather than responding to actual decreases in TOPIX. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/020/original/2020-09-19_10-48-20.png?1600480112" class="editor-image img-responsive" data-smartkarma-image-id="160020"></figure><p><strong>BULL v. BEARS</strong> - The technical market bulls will point to the 50-day moving average now being above the 200-day average. Bears will caution that we are the upper end of both the Toraku and Absolute Breadth ranges and are now 'rolling over'. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/021/original/2020-09-19_11-10-05.png?1600481514" class="editor-image img-responsive" data-smartkarma-image-id="160021"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/022/original/2020-09-19_11-13-43.png?1600481635" class="editor-image img-responsive" data-smartkarma-image-id="160022"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/023/original/2020-09-19_11-14-25.png?1600481694" class="editor-image img-responsive" data-smartkarma-image-id="160023"></figure><p><strong>AN SME MARKET</strong> - As we noted last week, the ratio between TOPIX Small and TOPIX equalled its twenty-month high on Friday and could well reach parity if the Yen continues to appreciate. Indeed, the Value-Traded ratio is firmly in favour of a domestic small-cap-led market. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/025/original/2020-09-19_11-20-35.png?1600482049" class="editor-image img-responsive" data-smartkarma-image-id="160025"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/026/original/2020-09-19_11-24-09.png?1600482261" class="editor-image img-responsive" data-smartkarma-image-id="160026"></figure><p><strong>AGGREGATE RESULTS &amp; REVISION SCORES YET TO BOTTOM</strong> - On several days last week, positive scores outweighed negative ones, and on Thursday, only one company has scored negatively. Nevertheless, the trend in the cap-weighted aggregate Scores has yet to see any recovery in earnings momentum.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/040/original/2020-09-19_12-34-38.png?1600486493" class="editor-image img-responsive" data-smartkarma-image-id="160040"></figure><p><strong>33x FY2021</strong> - The gap between forecast and trailing aggregate operating income is now ¥6.5 trillion and ¥3.7 trillion for net income. The forward earnings multiple is 32.6 times close to three times 2018's trailing low.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/041/original/2020-09-19_13-55-21.png?1600491337" class="editor-image img-responsive" data-smartkarma-image-id="160041"></figure><hr><p style="text-align: center;"><strong>• BEST &amp; WORST RESULTS &amp; REViSIONS •</strong></p><p style="text-align: left;">The 'best' announcements on Friday were from home centre <a href="https://www.smartkarma.com/entities/dcm-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:13042:1" rel="noopener">DCM (3050 JP)</a> and, surprisingly, <a href="https://www.smartkarma.com/entities/h-u-group-holdings-inc" target="_blank" data-smartkarma-citation="entities:16580:1" rel="noopener">H.U. Group (4544 JP)</a> (formerly Miraca). </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/007/original/2020-09-19_09-47-20.png?1600476454" class="editor-image img-responsive" data-smartkarma-image-id="160007"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/009/original/2020-09-19_09-55-21.png?1600476933" class="editor-image img-responsive" data-smartkarma-image-id="160009"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div><p>Friday's 'worst' were from <a href="https://www.smartkarma.com/entities/asahi-diamond-industrial-co" target="_blank" data-smartkarma-citation="entities:9032:1" rel="noopener">Asahi Diamond (6140 JP)</a> and Albert (3906 JP) </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/010/original/2020-09-19_09-58-46.png?1600477139" class="editor-image img-responsive" data-smartkarma-image-id="160010"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/160/012/original/2020-09-19_10-00-34.png?1600477245" class="editor-image img-responsive" data-smartkarma-image-id="160012"></figure><hr><p style="text-align: center;"><strong>DAILY STATS</strong></p><hr><div></div><div><p><strong>Both of Fridays' results scored negatively with Internet marketing company Albert (3906 JP) being the 'worst' - as above. Forecasts and Revisions reverted to bein net negative again.</strong></p></div><hr><div><p style="text-align: center;"><strong> 17 Annual • 13 Interim Forecasts/Revisions</strong></p></div><div><ul style="list-style-type: disc;">
<li>Annual Forecast/Revision Score: 24% Positive / 16% Neutral / 65% Negative</li>
<li>Interim Forecast/Revision Score Change: 31% Positive / 0% Neutral / 69% Negative</li>
<li>Average Forecast/Revision Score Change: -6.4 points</li>
</ul></div>

NEW 2-YEAR $ HIGH? - With the Yen on a tear against the US Dollar and the TOPIX index focused more on the inauguration of the Suga-era rather than NASDAQ, TOPIX in US dollars terms is within 1.2% of a new two-year high and is 36% above the March low. A supporting factor has been the Bank of Japan's ETF purchase program which now appears to be anticipating currency-induced declines, rather than responding to actual decreases in TOPIX. BULL v. BEARS - The technical market bulls will point to the 50-day moving average now being above the 200-day average. Bears will caution that we are the upper end of both the Toraku and Absolute Breadth ranges and are now 'rolling over'. AN SME MARKET - As we noted last week, the ratio between TOPIX Small and TOPIX equalled its twenty-month high on Friday and could well reach parity if the Yen continues to appreciate. Indeed, the Value-Traded ratio is firmly in favour of a domestic small-cap-led market. AGGREGATE RESULTS &amp; REVISION SCORES YET TO BOTTOM - On several days last week, positive scores outweighed negative ones, and on Thursday, only one company has scored negatively. Nevertheless, the trend in the cap-weighted aggregate Scores has yet to see any recovery in earnings momentum.33x FY2021 - The gap between forecast and trailing aggregate operating income is now ¥6.5 trillion and ¥3.7 trillion for net income. The forward earnings multiple is 32.6 times close to three times 2018's trailing low.• BEST &amp; WORST RESULTS &amp; REViSIONS •The 'best' announcements on Friday were from home centre DCM (3050 JP) and, surprisingly, H.U. Group (4544 JP) (formerly Miraca). Source for all charts &amp; tables: Japan AnalyticsFriday's 'worst' were from Asahi Diamond (6140 JP) and Albert (3906 JP) DAILY STATSBoth of Fridays' results scored negatively with Internet marketing company Albert (3906 JP) being the 'worst' - as above. Forecasts and Revisions reverted to bein net negative again. 17 Annual • 13 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 24% Positive / 16% Neutral / 65% Negative
Interim Forecast/Revision Score Change: 31% Positive / 0% Neutral / 69% Negative
Average Forecast/Revision Score Change: -6.4 points


🇯🇵 JAPAN • Market Update & Results & Revisions 09/​​​​​​​​​​18 - DCM, H.U., Strike

<p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p><p style="text-align: left;">Our 'best' and 'worst' pairing from yesterday's announcements is food and drink retailer <a href="https://www.smartkarma.com/entities/life-corp" target="_blank" data-smartkarma-citation="entities:1743:1" rel="noopener">Life (8194 JP)</a> and parking lot operator <a href="https://www.smartkarma.com/entities/park24-co-ltd" target="_blank" data-smartkarma-citation="entities:5622:1" rel="noopener">Park24 (4666 JP)</a>. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/159/223/original/2020-09-16_04-25-58.png?1600198055" class="editor-image img-responsive" data-smartkarma-image-id="159223"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/159/224/original/2020-09-16_04-31-11.png?1600198284" class="editor-image img-responsive" data-smartkarma-image-id="159224"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div><hr><div><p style="text-align: center;"><strong>DAILY STATS</strong></p></div><hr><div><p><strong>PERCENTAGES</strong> -<strong>57</strong>% of quarterly results, <strong>54%</strong> of annual forecasts/revisions and <strong>44%</strong> of interim forecasts have negative Score<strong>s. 57</strong>% of companies reporting lost money for the quarter. </p></div><div><p style="text-align: center;"><strong>7 Quarterly Results</strong></p></div><div><ul style="list-style-type: disc;">
<li>
<strong>Results Score</strong>: 29% Positive / 14% Neutral / 57% Negative</li>
<li>
<strong>Average Results Score Change:</strong> -1.7 points</li>
<li>
<strong>Average % Change in Revenue:</strong> +6.6% Quarter YoY / +12.5% Rolling TTM YoY </li>
<li>
<strong>Average Operating Profit Margin Change:</strong> -2.6ppt</li>
<li>
<strong>Percentage Making Quarterly Losses:</strong> 57%</li>
</ul></div><hr><div><p style="text-align: center;"><strong>13 Annual • 9 Interim Forecasts/Revisions</strong></p></div><div><ul style="list-style-type: disc;">
<li>
<strong>Annual Forecast/Revision Score:</strong> 46% Positive / 0% Neutral / 54% Negative</li>
<li>
<strong>Interim Forecast/Revision Score Change</strong>: 56% Positive / 0% Neutral / 44% Negative</li>
<li>
<strong>Average Forecast/Revision Score Change:</strong> +0.5 points</li>
</ul></div>

• BEST &amp; WORST •Our 'best' and 'worst' pairing from yesterday's announcements is food and drink retailer Life (8194 JP) and parking lot operator Park24 (4666 JP). Source for all charts &amp; tables: Japan AnalyticsDAILY STATSPERCENTAGES -57% of quarterly results, 54% of annual forecasts/revisions and 44% of interim forecasts have negative Scores. 57% of companies reporting lost money for the quarter. 7 Quarterly Results

Results Score: 29% Positive / 14% Neutral / 57% Negative

Average Results Score Change: -1.7 points

Average % Change in Revenue: +6.6% Quarter YoY / +12.5% Rolling TTM YoY 

Average Operating Profit Margin Change: -2.6ppt

Percentage Making Quarterly Losses: 57%
13 Annual • 9 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 46% Positive / 0% Neutral / 54% Negative

Interim Forecast/Revision Score Change: 56% Positive / 0% Neutral / 44% Negative

Average Forecast/Revision Score Change: +0.5 points


🇯🇵 JAPAN • Results & Revisions 09/​​​​​​​15  -Park[24]ing Woes, Life in Life | Keiyo▲, Palma▼

<p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p><p style="text-align: left;">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. </p><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><p style="text-align: center;"><strong>DAILY STATS</strong></p><hr><p><strong>IMPROVING</strong> -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.</p><p style="text-align: center;"><strong>41 Quarterly Results</strong></p><div><ul style="list-style-type: disc;">
<li>
<strong>Results Score:</strong> 44% Positive / 20% Neutral / 37% Negative</li>
<li>
<strong>Average Results Score Change: </strong>+0.9 points</li>
<li>
<strong>Average % Change in Revenue:</strong> +5.8% Quarter YoY / +5.6% Rolling TTM YoY </li>
<li>
<strong>Average Operating Profit Margin Change:</strong> 1.5ppt</li>
<li>
<strong>Percentage Making Quarterly Losses:</strong> 10%</li>
</ul></div><hr><div><p>23 Annual • 10 Interim Forecasts/Revisions</p></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

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>The housewares company <a href="https://www.smartkarma.com/entities/lixil-group-corp" target="_blank" data-smartkarma-citation="entities:454:1" rel="noopener">Lixil Group (5938 JP)</a> was formed as we know it through the merger of Tostem (which made doors, windows, curtain wall (for high rises), sash, and shutters) with INAX which made porcelain and FRP toilets and sinks and plumbing fixtures) in 2001. That was renamed JS Group in 2004 and from then until just after the GFC JFC continued with bolt-on acquisitions (American Standard Asia Pacific (porcelain toilets), Sunwave (stainless steel sinks, etc for pro use), Shin Nikkei, Toyo Exterior, etc) then in 2011 merged them all together to form LIXIL Group. </p><p><a href="https://www.smartkarma.com/entities/lixil-viva" target="_blank" data-smartkarma-citation="entities:24060:1" rel="noopener">LIXIL VIVA (3564 JP)</a> started its life as a subsidiary of Toyo Sash which launched what in Japan is called a DIY store or a "home center" (something akin to a Home Depot), branded "Viva Home", in the late 1970s. It was early. In the 1980s it listed itself, and in the early 1990s, it rebranded itself Tostem Viva when Toyo Sash itself rebranded itself as Tostem. In 2001, it merged with Tostem and Inax to form Tostem Inax which, as above, became JS Group and then LIXIL Group. </p><p>LIXIL IPOed LIXIL VIVA in April 2017, and climbed until TOPIX inclusion week at the end of May 2017, and then the shares fell for five months, falling well below the IPO price (¥2050/share). The shares rallied into the end of the fiscal year, regaining the IPO price for several weeks before falling 45% to the ¥1200/share area in summer 2019. The goal had been for LIXIL Group to cut LIXIL VIVA loose, because it was deemed something of a conflict of interest to have a home furnishings company owning a low-priced retailer of both its items (which might put its stores in competition with its distributor network) and competitors' items, however the appetite for a large offering was never deemed right, and eventually a private sale was looked at. The search for a buyer started in earnest several months ago, with reports suggesting the field had been winnowed down to a half dozen by March when markets started getting hairy - split between strategics and financial buyers. </p><h2>The NEW News Today</h2><p>Today, <a href="https://www.smartkarma.com/entities/arcland-sakamoto-co-ltd" target="_blank" data-smartkarma-citation="entities:10395:1" rel="noopener">Arcland Sakamoto (9842 JP)</a>, <a href="https://www.smartkarma.com/entities/lixil-viva" target="_blank" data-smartkarma-citation="entities:24060:1" rel="noopener">LIXIL VIVA (3564 JP)</a>, and <a href="https://www.smartkarma.com/entities/lixil-group-corp" target="_blank" data-smartkarma-citation="entities:454:1" rel="noopener">Lixil Group (5938 JP)</a> announced a multi-leg agreement where Arcland Sakamoto would launch a Tender Offer to take over enough shares in LIXIL Viva so that after the Tender Offer, Arcland and LIXIL Group would own enough to squeeze out minorities. Then Arcland will inject some capital into LIXIL Viva, enabling it to buy back shares from LIXIL Group so that Arcland will be the sole owner.</p><p>There are a couple of specific reasons for doing it this way which only support an improved price for minorities, so the structure is not terribly objectionable, but the minimum threshold for tender success being only 12% out of the ~45% minority ownership is a part of Japanese tender offers on companies with large incumbent stake holdings which should be fixed at some point.</p><div class="content-remarks"><p>(hint: if you investors don't demand the change to better defend minorities, companies won't volunteer it on their own). </p></div><p>This sales process hasn't exactly been conducted in secret, but even then, the premium vs the last week and month is pretty miserly. One could imagine <em>some</em> people getting upset. It is not clear people <em>should</em> be upset. It was well-signalled, it's a tough business, an auction was conducted with multiple participants, and while LIXIL Viva may be the largest and best example of how to run this business, they are not cheap.</p><p><em>This should get done, but it may be interesting to watch. </em></p>

The housewares company Lixil Group (5938 JP) was formed as we know it through the merger of Tostem (which made doors, windows, curtain wall (for high rises), sash, and shutters) with INAX which made porcelain and FRP toilets and sinks and plumbing fixtures) in 2001. That was renamed JS Group in 2004 and from then until just after the GFC JFC continued with bolt-on acquisitions (American Standard Asia Pacific (porcelain toilets), Sunwave (stainless steel sinks, etc for pro use), Shin Nikkei, Toyo Exterior, etc) then in 2011 merged them all together to form LIXIL Group. LIXIL VIVA (3564 JP) started its life as a subsidiary of Toyo Sash which launched what in Japan is called a DIY store or a "home center" (something akin to a Home Depot), branded "Viva Home", in the late 1970s. It was early. In the 1980s it listed itself, and in the early 1990s, it rebranded itself Tostem Viva when Toyo Sash itself rebranded itself as Tostem. In 2001, it merged with Tostem and Inax to form Tostem Inax which, as above, became JS Group and then LIXIL Group. LIXIL IPOed LIXIL VIVA in April 2017, and climbed until TOPIX inclusion week at the end of May 2017, and then the shares fell for five months, falling well below the IPO price (¥2050/share). The shares rallied into the end of the fiscal year, regaining the IPO price for several weeks before falling 45% to the ¥1200/share area in summer 2019. The goal had been for LIXIL Group to cut LIXIL VIVA loose, because it was deemed something of a conflict of interest to have a home furnishings company owning a low-priced retailer of both its items (which might put its stores in competition with its distributor network) and competitors' items, however the appetite for a large offering was never deemed right, and eventually a private sale was looked at. The search for a buyer started in earnest several months ago, with reports suggesting the field had been winnowed down to a half dozen by March when markets started getting hairy - split between strategics and financial buyers. The NEW News TodayToday, Arcland Sakamoto (9842 JP), LIXIL VIVA (3564 JP), and Lixil Group (5938 JP) announced a multi-leg agreement where Arcland Sakamoto would launch a Tender Offer to take over enough shares in LIXIL Viva so that after the Tender Offer, Arcland and LIXIL Group would own enough to squeeze out minorities. Then Arcland will inject some capital into LIXIL Viva, enabling it to buy back shares from LIXIL Group so that Arcland will be the sole owner.There are a couple of specific reasons for doing it this way which only support an improved price for minorities, so the structure is not terribly objectionable, but the minimum threshold for tender success being only 12% out of the ~45% minority ownership is a part of Japanese tender offers on companies with large incumbent stake holdings which should be fixed at some point.(hint: if you investors don't demand the change to better defend minorities, companies won't volunteer it on their own). This sales process hasn't exactly been conducted in secret, but even then, the premium vs the last week and month is pretty miserly. One could imagine some people getting upset. It is not clear people should be upset. It was well-signalled, it's a tough business, an auction was conducted with multiple participants, and while LIXIL Viva may be the largest and best example of how to run this business, they are not cheap.This should get done, but it may be interesting to watch. 

Lixil Viva (3564 JP) Takeout Tender Offer

<p>In January this year, <a href="https://www.smartkarma.com/entities/shimachu-co-ltd" target="_blank" data-smartkarma-citation="entities:5235:1" rel="noopener">Shimachu Co Ltd (8184 JP)</a> made an <a href="https://ssl4.eir-parts.net/doc/8184/ir_material3/132556/00.pdf" target="_blank" rel="noopener">announcement</a> of a buyback of up to ¥10bn, buying back up to 4.2mm shares which was 9.9% of the company over the next seven months. </p><p>I analysed the prospects of the buyback and the company's interesting history of buybacks, and what it meant for trading/execution strategy in <a href="https://www.smartkarma.com/insights/big-shimachu-8184-buyback-an-interesting-trade-profile" target="_blank" data-smartkarma-citation="insights:35726" rel="noopener">BIG Shimachu (8184) Buyback - An Interesting Trade Profile</a> at the time, suggesting they'd only buy 10% of float. </p><blockquote>
<p>It comes out to 10% of expected ADV from here to end-August - the timeframe of the buyback, but historical buyback patterns show a pattern of buying a higher percentage of market volume in a shorter period. All the previous buybacks have finished well before the allotted timeframe end and have usually completed in 3-4 months. </p>
<p>Given past patterns, I would expect the buyback to be 15-20+% of ADV for the foreseeable future, possibly going slow in the rest of January then picking up with a vengeance in February.</p>
</blockquote><p>In fact, the company bought back 60bp of shares out in the first month, then proceeded to speed things up. Today, four months and small change after the announcement, the company <a href="https://ssl4.eir-parts.net/doc/8184/tdnet/1836100/00.pdf" target="_blank" rel="noopener">announced</a> it had completed the buyback.</p><p>The first piece provided a strategy for dealing with the buyback during the life of the buyback AND for after the end of the buyback. In this insight we look at what happened, where we are left, and what comes next.</p>

In January this year, Shimachu Co Ltd (8184 JP) made an announcement of a buyback of up to ¥10bn, buying back up to 4.2mm shares which was 9.9% of the company over the next seven months. I analysed the prospects of the buyback and the company's interesting history of buybacks, and what it meant for trading/execution strategy in BIG Shimachu (8184) Buyback - An Interesting Trade Profile at the time, suggesting they'd only buy 10% of float. 
It comes out to 10% of expected ADV from here to end-August - the timeframe of the buyback, but historical buyback patterns show a pattern of buying a higher percentage of market volume in a shorter period. All the previous buybacks have finished well before the allotted timeframe end and have usually completed in 3-4 months. 
Given past patterns, I would expect the buyback to be 15-20+% of ADV for the foreseeable future, possibly going slow in the rest of January then picking up with a vengeance in February.
In fact, the company bought back 60bp of shares out in the first month, then proceeded to speed things up. Today, four months and small change after the announcement, the company announced it had completed the buyback.The first piece provided a strategy for dealing with the buyback during the life of the buyback AND for after the end of the buyback. In this insight we look at what happened, where we are left, and what comes next.

Shimachu's Buyback Is Done But The Trade Is Not Done

Japan

Arclands Corporation operates home centers. The Company mainly sells home improvement products, household utensils, car and leisure products, gardening supplies, and other products. Arclands also operates restaurants management, DIY(Do It Yourself) products sales, real estate development, and other businesses.

Price Gauge
52-week Range	0.00 - 0.00
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Arclands Corporation (9842 JP)

🇯🇵 JAPAN • Market Update & Results & Revisions 09/18 - DCM, H.U., Strike

• BEST & WORST • DAILY STATS Both of Fridays' results scored negatively 23 Annual • 10 Interim Forecasts/Revisions Annual...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 09/15 -Park[24]ing Woes, Life in Life | Keiyo▲, Palma▼

• BEST WORST •

Campbell Gunn

🇯🇵 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

Lixil Viva (3564 JP) Takeout Tender Offer

The housewares company Lixil Group (5938 JP) was formed as we know it through the merger of Tostem (which made doors, windows, curtain wall (for...

Travis Lundy

Shimachu's Buyback Is Done But The Trade Is Not Done

In January this year, Shimachu Co Ltd (8184 JP) made an announcement of a buyback of up to ¥10bn, buying back up to 4.2mm shares which was 9.9% of...

Travis Lundy

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🇯🇵 JAPAN • Market Update & Results & Revisions 09/​​​​​​​​​​18 - DCM, H.U., Strike

• BEST & WORST • DAILY STATS Both of Fridays' results scored negatively 23 Annual • 10 Interim Forecasts/Revisions Annual...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 09/​​​​​​​15 -Park[24]ing Woes, Life in Life | Keiyo▲, Palma▼

• BEST WORST •

Campbell Gunn

🇯🇵 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

Lixil Viva (3564 JP) Takeout Tender Offer

The housewares company Lixil Group (5938 JP) was formed as we know it through the merger of Tostem (which made doors, windows, curtain wall (for...

Travis Lundy

Shimachu's Buyback Is Done But The Trade Is Not Done

In January this year, Shimachu Co Ltd (8184 JP) made an announcement of a buyback of up to ¥10bn, buying back up to 4.2mm shares which was 9.9% of...

Travis Lundy

🇯🇵 JAPAN • Market Update & Results & Revisions 09/18 - DCM, H.U., Strike

🇯🇵 JAPAN • Results & Revisions 09/15 -Park[24]ing Woes, Life in Life | Keiyo▲, Palma▼

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