'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)

<p style="text-align: center;"><strong>• BEST &amp; WORST • </strong></p><p>Our best and worst mega-cap pair from Thursday's 135 results and 64 forecasts/revisions announcements is <a href="https://www.smartkarma.com/entities/japan-exchange-group-inc" target="_blank" data-smartkarma-citation="entities:11266:1" rel="noopener">Japan Exchange (8697 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a>. Amongst large caps, our picks are <a href="https://www.smartkarma.com/entities/paltac-corporation" target="_blank" data-smartkarma-citation="entities:20014:1" rel="noopener">Paltac (8283 JP)</a> and <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl (4921 JP)</a>. 69% of companies had improved Results Scores, and 68% of annual revisions scored positively.  Only 10% of companies posted quarterly losses.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/303/original/2021-01-29_05-38-04.png?1611866299" class="editor-image img-responsive" data-smartkarma-image-id="185303"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/304/original/2021-01-29_05-38-53.png?1611866346" class="editor-image img-responsive" data-smartkarma-image-id="185304"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/305/original/2021-01-29_05-39-46.png?1611866397" class="editor-image img-responsive" data-smartkarma-image-id="185305"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/306/original/2021-01-29_05-42-15.png?1611866547" class="editor-image img-responsive" data-smartkarma-image-id="185306"></figure></section><div class="content-caption">   Source for all charts &amp; tables: Japan Analytics</div>

• BEST &amp; WORST • Our best and worst mega-cap pair from Thursday's 135 results and 64 forecasts/revisions announcements is Japan Exchange (8697 JP) and Tokyo Electron (8035 JP). Amongst large caps, our picks are Paltac (8283 JP) and Fancl (4921 JP). 69% of companies had improved Results Scores, and 68% of annual revisions scored positively.  Only 10% of companies posted quarterly losses.   Source for all charts &amp; tables: Japan Analytics

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​​​​​​​​​28 JPX, TEL, Fancl...

<div><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p></div><p>Yesterday's best and worst pairing is <a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank Corp (9434 JP)</a> and <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl (4921 JP)</a>.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/169/371/original/2020-11-05_06-10-58.png?1604524271" class="editor-image img-responsive" data-smartkarma-image-id="169371"></figure></section><section class="figure"></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/169/367/original/2020-11-05_05-21-58.png?1604521331" class="editor-image img-responsive" data-smartkarma-image-id="169367"></figure></section><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 style="text-align: center;"><strong>108 Quarterly Results</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Results Score:</strong> 41% Positive / 1% Neutral / 58% Negative</p></li>
<li><p><strong>Average Results Score Change:</strong> -2.0 points</p></li>
<li><p><strong>Average % Change in Revenue:</strong> -9.6% Quarter YoY / -5.7% Rolling TTM YoY </p></li>
<li><p><strong>Average Operating Profit Margin Change:</strong> -1.7ppt</p></li>
<li><p><strong>Percentage Making Quarterly Losses:</strong> 21%</p></li>
</ul></div><hr><div><p style="text-align: center;"><strong>60 Annual • 18 Interim Forecasts/Revisions</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Annual Forecast/Revision Score:</strong> 35% Positive / 10% Neutral / 55% Negative</p></li>
<li><p style="text-align: left;"><strong>Interim Forecast/Revision Score Change:</strong> 67% Positive / 5% Neutral / 28% Negative</p></li>
<li><p><strong>Average Forecast/Revision Score Change:</strong> -1.6 points</p></li>
</ul></div>

• BEST &amp; WORST •Yesterday's best and worst pairing is Softbank Corp (9434 JP) and Fancl (4921 JP).Source for all charts &amp; tables: Japan AnalyticsDAILY STATS108 Quarterly Results
Results Score: 41% Positive / 1% Neutral / 58% Negative
Average Results Score Change: -2.0 points
Average % Change in Revenue: -9.6% Quarter YoY / -5.7% Rolling TTM YoY 
Average Operating Profit Margin Change: -1.7ppt
Percentage Making Quarterly Losses: 21%
60 Annual • 18 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 35% Positive / 10% Neutral / 55% Negative
Interim Forecast/Revision Score Change: 67% Positive / 5% Neutral / 28% Negative
Average Forecast/Revision Score Change: -1.6 points


🇯🇵 JAPAN • Results & Revisions 11/​​​​​​​​​​​​​​​​​​​​​​04 Softbank Corp., Ricoh, Fancl, Nichirei

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/693/original/2020-09-14_09-50-37.png?1600044664" class="editor-image img-responsive" data-smartkarma-image-id="158693"></figure><div class="content-caption">Source for all charts &amp; tables except as stated: Japan Analytics</div><p><strong>EQUITY-DRIVEN</strong> - Japan's aggregate Shareholders' Equity has appreciated by 45% since 2014 - an annual rate of 5.5% and has been one of the key achievements of the 'Abe era'. For the five years before 2012, Shareholders Equity was unchanged, buffeted by the 2008/9 financial crisis and the 3/11.  Although the equity market has responded well to the change in reserves, Japan's PBR has remained within a range of 1.05 to 1.38 over the last decade and is unchanged compared to 2010. In prior post-bubble 'lost' decades, the average PBR was 1.8 times. In other markets, the rise of intangible assets has called the use of Book/Price as a metric and the S&amp;P 500 PBR is now almost three times that of the Japan aggregate having bottomed at 1.78 in March 2009.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/694/original/File%202020-09-14%2010%2007%2037.jpeg?1600045681" class="editor-image img-responsive" data-smartkarma-image-id="158694"></figure><div class="content-caption">Source: multpl.com</div><p><strong>BOOK VALUE PER SHARE </strong>- In this Insight, we shall look at Japan's larger-cap companies (current market value &gt;¥100 billion) through the 'lens' of book value per share. Our focus will be less on the 'winners' and 'losers' than on those companies that have seen the least change in 'BVPS' over the last seven years. Our share count excludes treasury shares which is to the benefit of companies such as <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (9432 JP)</a> which has seen a 20% reduction in Net Shares Outstanding, but only a 9% increase in Shareholders' Equity. A BVPS growth metric does, however, flatter serial issuers of equity with declining share prices, such as <a href="https://www.smartkarma.com/entities/sosei-group-corp" target="_blank" data-smartkarma-citation="entities:770:1" rel="noopener">Sosei (4565 JP)</a>.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/696/original/2020-09-14_10-26-48.png?1600046818" class="editor-image img-responsive" data-smartkarma-image-id="158696"></figure><p><strong>WINNERS</strong> - As many may ask and for the record, our 'winning' thirty companies contains many of Japan's best-performing businesses and 'priciest 'stocks, such as <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" data-smartkarma-citation="entities:15441:1" rel="noopener">Monotaro (3064 JP)</a>, <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 (2413 JP)</a>, <a href="https://www.smartkarma.com/entities/gmo-payment-gateway-inc" target="_blank" data-smartkarma-citation="entities:1492:1" rel="noopener">GMO Payment Gateway (3769 JP)</a>, and <a href="https://www.smartkarma.com/entities/kobe-bussan-co-ltd" target="_blank" data-smartkarma-citation="entities:4701:1" rel="noopener">Kobe Bussan (3038 JP)</a>. Some of the more surprising entries are <a href="https://www.smartkarma.com/entities/mixi-inc" target="_blank" data-smartkarma-citation="entities:602:1" rel="noopener">mixi (2121 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyo-electric-power-co-inc" target="_blank" data-smartkarma-citation="entities:15457:1" rel="noopener">Tokyo Electric Power (9501 JP)</a>.  As an equally-weighted portfolio, this group has outperformed by 30% over one year and by 11% over the last three months.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/697/original/2020-09-14_10-33-13.png?1600047204" class="editor-image img-responsive" data-smartkarma-image-id="158697"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/698/original/2020-09-14_10-33-41.png?1600047231" class="editor-image img-responsive" data-smartkarma-image-id="158698"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/701/original/2020-09-14_10-47-56.png?1600048087" class="editor-image img-responsive" data-smartkarma-image-id="158701"></figure><p><strong>LOSERS</strong> - Our list of losers, who have collectively underperformed by 9% over one year, have many of Japan's weaker business models (shipping, oil &amp; gas, paper, copiers, gaming machines. The list also features some of the less-astute management 'teams' (<a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan (7201 JP)</a>, <a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin (2503 JP)</a>, <a href="https://www.smartkarma.com/entities/lixil-group-corp" target="_blank" data-smartkarma-citation="entities:454:1" rel="noopener">Lixil (5938 JP)</a>, and <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon (8267 JP)</a>).  Also among the latter are two medical-related business - the now remained <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) and recent Bain PE target <a href="https://www.smartkarma.com/entities/nichii-gakkan-co" target="_blank" data-smartkarma-citation="entities:6790:1" rel="noopener">Nichii Gakkan (9792 JP)</a>.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/706/original/2020-09-14_10-57-45.png?1600048692" class="editor-image img-responsive" data-smartkarma-image-id="158706"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/707/original/2020-09-14_10-59-22.png?1600048774" class="editor-image img-responsive" data-smartkarma-image-id="158707"></figure><p>In the <strong>DETAIL</strong> section below, we all review the large companies that have seen the least change in BVPS over the last seven years and those with the lowest BVPS volatility over the same period. Our lists contain quite a few surprises.</p>

Source for all charts &amp; tables except as stated: Japan AnalyticsEQUITY-DRIVEN - Japan's aggregate Shareholders' Equity has appreciated by 45% since 2014 - an annual rate of 5.5% and has been one of the key achievements of the 'Abe era'. For the five years before 2012, Shareholders Equity was unchanged, buffeted by the 2008/9 financial crisis and the 3/11.  Although the equity market has responded well to the change in reserves, Japan's PBR has remained within a range of 1.05 to 1.38 over the last decade and is unchanged compared to 2010. In prior post-bubble 'lost' decades, the average PBR was 1.8 times. In other markets, the rise of intangible assets has called the use of Book/Price as a metric and the S&amp;P 500 PBR is now almost three times that of the Japan aggregate having bottomed at 1.78 in March 2009.Source: multpl.comBOOK VALUE PER SHARE - In this Insight, we shall look at Japan's larger-cap companies (current market value &gt;¥100 billion) through the 'lens' of book value per share. Our focus will be less on the 'winners' and 'losers' than on those companies that have seen the least change in 'BVPS' over the last seven years. Our share count excludes treasury shares which is to the benefit of companies such as NTT (9432 JP) which has seen a 20% reduction in Net Shares Outstanding, but only a 9% increase in Shareholders' Equity. A BVPS growth metric does, however, flatter serial issuers of equity with declining share prices, such as Sosei (4565 JP).WINNERS - As many may ask and for the record, our 'winning' thirty companies contains many of Japan's best-performing businesses and 'priciest 'stocks, such as Monotaro (3064 JP), M3 (2413 JP), GMO Payment Gateway (3769 JP), and Kobe Bussan (3038 JP). Some of the more surprising entries are mixi (2121 JP) and Tokyo Electric Power (9501 JP).  As an equally-weighted portfolio, this group has outperformed by 30% over one year and by 11% over the last three months.LOSERS - Our list of losers, who have collectively underperformed by 9% over one year, have many of Japan's weaker business models (shipping, oil &amp; gas, paper, copiers, gaming machines. The list also features some of the less-astute management 'teams' (Toshiba (6502 JP), Nissan (7201 JP), Kirin (2503 JP), Lixil (5938 JP), and Aeon (8267 JP)).  Also among the latter are two medical-related business - the now remained H.U. Group (4544 JP) (formerly Miraca) and recent Bain PE target Nichii Gakkan (9792 JP).In the DETAIL section below, we all review the large companies that have seen the least change in BVPS over the last seven years and those with the lowest BVPS volatility over the same period. Our lists contain quite a few surprises.

🇯🇵 Japan • Every Shareholder Left Behind - The Book Value Per Share Metric

<div class="content-highlight"><p style="text-align: center;"><strong><em>"Beware of geeks bearing formulas." - Warren Buffett </em></strong></p></div><p>Enterprise Value multiples have become common parlance in the investment world, both <strong>Enterprise Value/Operating Profit</strong> (EV/OP or EV/EBIT) and it's flawed 'bastard' cousin EV/EBITDA which we will leave well alone for this Insight. With markets supported on a cloud of central bank's liquidity and corporate trailing earnings distorted by COVID-19, many valuation ratios appear meaningless. To inject a dose of reality into the analysis of Japanese corporate valuations, we have created a new metric -<strong> Enterprise Value/Peak Operating Profit (EV/POP).</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/155/071/original/2020-08-26_10-36-07.png?1598405812" class="editor-image img-responsive" data-smartkarma-image-id="155071"></figure><div class="content-caption">Source: Japan Analytics (applies to all charts below)</div><p><strong>EV &amp; OP TIMELINE</strong> - Using currently-listed non-financial companies (with the four exceptions noted in the legend above), the correlation between Enterprise Value (here divided by 10) and Operating Income has increased since 2013. However, the current positive EV&lt;&gt;OP 'spread' is now larger than at any time since 2002. While non-financial Operating Profits have declined by 22% since peaking in the first quarter of FY2019, Enterprise Value is just ¥2.9 trillion, or 5% below its <a href="mailto:FY18-@Q" target="_blank" rel="noopener">FY18-</a>2Q peak level. Where the lines converge, the EV/OP multiple is 10 times, which is close to the sixteen-year average and the arbitrary line we shall use to distinguish the overvalued from the undervalued. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/155/075/original/2020-08-26_10-56-07.png?1598406979" class="editor-image img-responsive" data-smartkarma-image-id="155075"></figure><p><strong>EV/OP &amp; EV/POP</strong> - Aggregate EV/OP is now 11.6 times, breaking out of a narrow range to reach a  new a ten-year high. EV/POP reached a five-year low in March of 7.9 times but is now 20 basis points above the seven-year average of 8.8 times. By neither measure could the market be considered cheap; however, in EV/POP terms, aggregate valuations are only just above average.  For several favoured companies for which the market is prepared to pay any price for their perceived quality EV/POP multiple are far from average as in the examples below. At the other end of the valuation spectrum, EV/POP reveals some clear bargain-hunting opportunities.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/155/100/original/2020-08-26_13-12-11.png?1598415140" class="editor-image img-responsive" data-smartkarma-image-id="155100"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/155/102/original/2020-08-26_13-12-39.png?1598415169" class="editor-image img-responsive" data-smartkarma-image-id="155102"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/155/104/original/2020-08-26_13-15-58.png?1598415375" class="editor-image img-responsive" data-smartkarma-image-id="155104"></figure><p>In the <strong>DETAIL</strong> section, we look at the non-financial companies at more examples from both extremes of this metric, in an attempt to pick potential winners and losers as the world slowly normalises and liquidity begins to ebb.  We have purposely excluded companies with negative Enterprise Values, which we shall cover in a upcoming Insight. We have also excluded companies that have listed only in the last four years.</p>

"Beware of geeks bearing formulas." - Warren Buffett Enterprise Value multiples have become common parlance in the investment world, both Enterprise Value/Operating Profit (EV/OP or EV/EBIT) and it's flawed 'bastard' cousin EV/EBITDA which we will leave well alone for this Insight. With markets supported on a cloud of central bank's liquidity and corporate trailing earnings distorted by COVID-19, many valuation ratios appear meaningless. To inject a dose of reality into the analysis of Japanese corporate valuations, we have created a new metric - Enterprise Value/Peak Operating Profit (EV/POP).Source: Japan Analytics (applies to all charts below)EV &amp; OP TIMELINE - Using currently-listed non-financial companies (with the four exceptions noted in the legend above), the correlation between Enterprise Value (here divided by 10) and Operating Income has increased since 2013. However, the current positive EV&lt;&gt;OP 'spread' is now larger than at any time since 2002. While non-financial Operating Profits have declined by 22% since peaking in the first quarter of FY2019, Enterprise Value is just ¥2.9 trillion, or 5% below its FY18-2Q peak level. Where the lines converge, the EV/OP multiple is 10 times, which is close to the sixteen-year average and the arbitrary line we shall use to distinguish the overvalued from the undervalued. EV/OP &amp; EV/POP - Aggregate EV/OP is now 11.6 times, breaking out of a narrow range to reach a  new a ten-year high. EV/POP reached a five-year low in March of 7.9 times but is now 20 basis points above the seven-year average of 8.8 times. By neither measure could the market be considered cheap; however, in EV/POP terms, aggregate valuations are only just above average.  For several favoured companies for which the market is prepared to pay any price for their perceived quality EV/POP multiple are far from average as in the examples below. At the other end of the valuation spectrum, EV/POP reveals some clear bargain-hunting opportunities.In the DETAIL section, we look at the non-financial companies at more examples from both extremes of this metric, in an attempt to pick potential winners and losers as the world slowly normalises and liquidity begins to ebb.  We have purposely excluded companies with negative Enterprise Values, which we shall cover in a upcoming Insight. We have also excluded companies that have listed only in the last four years.

🇯🇵 JAPAN • Stock Picking with 'Peak' EV/OP Multiples - Introducing EV/POP

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/132/350/original/2020-05-10_07-41-07.png?1589064097" class="editor-image img-responsive" data-smartkarma-image-id="132350"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>HERD IMMUNITY</strong> - The market 'herd' continues to be immune to the siren song of earnings announcements. In last week's two reporting days, aggregate trailing operating income declined by ¥400 billion, while the current year forecast was trimmed by ¥800 billion. The respective numbers for net income were ¥600 billion and ¥200 billion - the latter being flattering in its 'deception' as the figure includes three net-income 'heavy' sogo-shosha. We expect a PER 'breakout' to above 18x in the coming week.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/132/351/original/2020-05-10_08-08-43.png?1589065754" class="editor-image img-responsive" data-smartkarma-image-id="132351"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>INTERIM LEADING THE WAY</strong> - Our Results and Revisions scoring methodology tracks both Interim and Annual forecasts with the former signalling the direction of the latter. For some companies such as <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl (4921 JP)</a>, <a href="https://www.smartkarma.com/entities/jcu-corp" target="_blank" data-smartkarma-citation="entities:16229:1" rel="noopener">JCU (4975 JP)</a> and <a href="https://www.smartkarma.com/entities/zenkoku-hosho-co-ltd" target="_blank" data-smartkarma-citation="entities:5537:1" rel="noopener">Zenkoku Hosho (7164 JP)</a>, the Interim forecast is sufficiently pessimistic as to taint the reliability of the annual forecast. Our Interim Score will reach a new ten-year low this week; the Annual Score did so last month. We do not expect the COVID-19 earnings cycle to bottom until the January/February's mostly third-quarter results announcements.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/132/366/original/2020-05-10_09-01-50.png?1589068924" class="editor-image img-responsive" data-smartkarma-image-id="132366"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/132/367/original/2020-05-10_09-00-50.png?1589068939" class="editor-image img-responsive" data-smartkarma-image-id="132367"></figure><div class="content-caption">Source • Japan Analytics</div><div class="content-caption"></div><p>In the <strong>DETAIL</strong> below, we shall review the results, revisions and initial forecast announcements made by larger-cap (¥75b+) companies on Friday. The balance between positive/neutral/negative of the 211 results announcements was<strong> 90:27:107</strong>. The average change in Score was <strong>-1</strong>. For the 131 revisions/initial forecasts, the split was <strong>43:4:84</strong>  and the average Score was<strong> -5</strong>. Of the<strong> 155 </strong>companies declaring full-year results, <strong>49%</strong> made interim and annual forecasts for the current year. Two hundred thirty-three companies will announce on Monday, the largest of which by market capitalisation will be <a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank Corp (9434 JP)</a>, <a href="https://www.smartkarma.com/entities/mitsubishi-electric-corp" target="_blank" data-smartkarma-citation="entities:11171:1" rel="noopener">Mitsubishi Electric (6503 JP)</a>, and <a href="https://www.smartkarma.com/entities/bridgestone-corp" target="_blank" data-smartkarma-citation="entities:8914:1" rel="noopener">Bridgestone (5108 JP)</a>. Friday's 'best' and worst scoring results were from <a href="https://www.smartkarma.com/entities/chiyoda-corp" target="_blank" data-smartkarma-citation="entities:6232:1" rel="noopener">Chiyoda (6366 JP)</a> and <a href="https://www.smartkarma.com/entities/keihan-electric-railway-co" target="_blank" data-smartkarma-citation="entities:6120:1" rel="noopener">Keihan Electric Railway (9045 JP)</a>, although the former is below our cap cut-off for our tables below. For more, see <a href="https://www.smartkarma.com/profiles/mio-kato-cfa" target="_blank" data-smartkarma-citation="accounts:713" rel="noopener">Mio Kato</a>'s results update <a href="https://www.smartkarma.com/insights/chiyoda-gross-margin-disappoints-but-sg-a-control-continues" target="_blank" data-smartkarma-citation="insights:39166" rel="noopener">Chiyoda – Gross Margin Disappoints but SG&amp;A Control Continues</a>. </p>

Source • Japan AnalyticsHERD IMMUNITY - The market 'herd' continues to be immune to the siren song of earnings announcements. In last week's two reporting days, aggregate trailing operating income declined by ¥400 billion, while the current year forecast was trimmed by ¥800 billion. The respective numbers for net income were ¥600 billion and ¥200 billion - the latter being flattering in its 'deception' as the figure includes three net-income 'heavy' sogo-shosha. We expect a PER 'breakout' to above 18x in the coming week.Source • Japan AnalyticsINTERIM LEADING THE WAY - Our Results and Revisions scoring methodology tracks both Interim and Annual forecasts with the former signalling the direction of the latter. For some companies such as Fancl (4921 JP), JCU (4975 JP) and Zenkoku Hosho (7164 JP), the Interim forecast is sufficiently pessimistic as to taint the reliability of the annual forecast. Our Interim Score will reach a new ten-year low this week; the Annual Score did so last month. We do not expect the COVID-19 earnings cycle to bottom until the January/February's mostly third-quarter results announcements.Source • Japan AnalyticsIn the DETAIL below, we shall review the results, revisions and initial forecast announcements made by larger-cap (¥75b+) companies on Friday. The balance between positive/neutral/negative of the 211 results announcements was 90:27:107. The average change in Score was -1. For the 131 revisions/initial forecasts, the split was 43:4:84  and the average Score was -5. Of the 155 companies declaring full-year results, 49% made interim and annual forecasts for the current year. Two hundred thirty-three companies will announce on Monday, the largest of which by market capitalisation will be Softbank Corp (9434 JP), Mitsubishi Electric (6503 JP), and Bridgestone (5108 JP). Friday's 'best' and worst scoring results were from Chiyoda (6366 JP) and Keihan Electric Railway (9045 JP), although the former is below our cap cut-off for our tables below. For more, see Mio Kato's results update Chiyoda – Gross Margin Disappoints but SG&amp;A Control Continues. 

🇯🇵 JAPAN • Results & Revisions Update 8th May - Lion, PPI, Hoya, Sogo Shosha, NEC

Japan

FANCL CORPORATION produces and sells additive-free skin care cosmetics for both women and men.  The Company's products include cleansing creams, hair care goods such as shampoos and conditioners, and facial make up products.  Fancl also makes and distributes dietary supplements including royal jelly and various tablets with extracted essence from mushrooms, garlic, ginseng, and soy beans.

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Fancl Corp (4921 JP)

🇯🇵 JAPAN • Results & Revisions 01/28 JPX, TEL, Fancl...

69% of companies had improved Results Scores, and 68% of annual revisions scored positively. Only 10% of companies posted quarterly losses.

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• BEST & WORST • Yesterday's best and worst pairing is Softbank Corp (9434 JP) and Fancl (4921 JP)._______________________________

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🇯🇵 JAPAN • Stock Picking with 'Peak' EV/OP Multiples - Introducing EV/POP

"Beware of geeks bearing formulas." - Warren Buffett Enterprise Value multiples have become common parlance in the investment world, both...

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🇯🇵 JAPAN • Results & Revisions Update 8th May - Lion, PPI, Hoya, Sogo Shosha, NEC

HERD IMMUNITY - The market 'herd' continues to be immune to the siren song of earnings announcements. In last week's two reporting days, aggregate...

Campbell Gunn

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🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​​​​​​​​​28 JPX, TEL, Fancl...

69% of companies had improved Results Scores, and 68% of annual revisions scored positively. Only 10% of companies posted quarterly losses.

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 11/​​​​​​​​​​​​​​​​​​​​​​04 Softbank Corp., Ricoh, Fancl, Nichirei

• BEST & WORST • Yesterday's best and worst pairing is Softbank Corp (9434 JP) and Fancl (4921 JP)._______________________________

Campbell Gunn

🇯🇵 Japan • Every Shareholder Left Behind - The Book Value Per Share Metric

EQUITY-DRIVEN - Japans

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🇯🇵 JAPAN • Stock Picking with 'Peak' EV/OP Multiples - Introducing EV/POP

"Beware of geeks bearing formulas." - Warren Buffett Enterprise Value multiples have become common parlance in the investment world, both...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions Update 8th May - Lion, PPI, Hoya, Sogo Shosha, NEC

HERD IMMUNITY - The market 'herd' continues to be immune to the siren song of earnings announcements. In last week's two reporting days, aggregate...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 01/28 JPX, TEL, Fancl...

🇯🇵 JAPAN • Results & Revisions 11/04 Softbank Corp., Ricoh, Fancl, Nichirei