Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Kao has the lonest period of consecutive earnings growth in the Nikkei's new "Consecutive Dividend Growth Stock Index"</li>
<li>With a 2.8% yield and a long history of raising its dividend, Kao should definitely be on the income investor's radar screen</li>
<li>Despite the recent underperformance of the stock (-4% ytd), Kao does not represent compelling valuations</li>
</ul>


Kao has the lonest period of consecutive earnings growth in the Nikkei's new "Consecutive Dividend Growth Stock Index"
With a 2.8% yield and a long history of raising its dividend, Kao should definitely be on the income investor's radar screen
Despite the recent underperformance of the stock (-4% ytd), Kao does not represent compelling valuations


Kao (4452) | Is It Time to Buy This Dividend Aristocrat?

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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.

<ul>
<li>Despite expected increased demand from returning Asian tourists, Japanese cosmetics companies have been hesitant to revise their 2H 2023 inbound demand projections.</li>
<li>We are long <a href="https://www.smartkarma.com/entities/kose-corp" target="_blank" data-smartkarma-citation="entities:18009:1" rel="noopener">Kose Corp (4922 JP)</a>, <a href="https://www.smartkarma.com/entities/shiseido-co-ltd" target="_blank" data-smartkarma-citation="entities:5718:1" rel="noopener">Shiseido Company (4911 JP)</a>, and <a href="https://www.smartkarma.com/entities/pola-orbis-holdings-inc" target="_blank" data-smartkarma-citation="entities:2287:1" rel="noopener">Pola Orbis Holdings (4927 JP)</a>, as consensus estimates look extra cautious and reasonable and appealing FY+2 valuation multiples.</li>
<li>We view the risk of Chinese consumers boycotting Japanese cosmetics due to Fukushima wastewater release as relatively low.</li>
</ul>


Despite expected increased demand from returning Asian tourists, Japanese cosmetics companies have been hesitant to revise their 2H 2023 inbound demand projections.
We are long Kose Corp (4922 JP), Shiseido Company (4911 JP), and Pola Orbis Holdings (4927 JP), as consensus estimates look extra cautious and reasonable and appealing FY+2 valuation multiples.
We view the risk of Chinese consumers boycotting Japanese cosmetics due to Fukushima wastewater release as relatively low.


Japanese Cosmetics Ready to Blossom with Asian Visitors

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS.  Ongoing Focus on Rising Yields As Equities fall(again); US10Yr hits 4.19% as US Gov ramps up borrowing; China continues to shore up Economy; Resilient Apple, Amazon Earnings. </li>
<li>JAPAN. Nikkei Futures -0.5% vs Cash; USDJPY 142.5; BOJ Emergency Bond Buying to slow rapid yield rise; Nikkei sheds 1200 points in 2 days in risk off - still+23%YTD. </li>
<li>NUGGET.  Another sign that Japanese investors are not standing still as domestic inflation takes hold - Record purchases of high-yielding (+high risk!) currencies in the first half of the year.  </li>
</ul>


OVERSEAS.  Ongoing Focus on Rising Yields As Equities fall(again); US10Yr hits 4.19% as US Gov ramps up borrowing; China continues to shore up Economy; Resilient Apple, Amazon Earnings. 
JAPAN. Nikkei Futures -0.5% vs Cash; USDJPY 142.5; BOJ Emergency Bond Buying to slow rapid yield rise; Nikkei sheds 1200 points in 2 days in risk off - still+23%YTD. 
NUGGET.  Another sign that Japanese investors are not standing still as domestic inflation takes hold - Record purchases of high-yielding (+high risk!) currencies in the first half of the year.  


Ohayo Japan| Reality Check from Higher Yields; NUGGET: Yield Game - Japanese Investors on the Hunt

Equity Long-Short Analyst

Pyari Menon

<ul>
<li>The three companies we write about this week are <a href="https://www.smartkarma.com/entities/raytheon-technologies-corp" target="_blank" data-smartkarma-citation="entities:6453:1" rel="noopener">Raytheon Technologies (RTX US)</a><a href="https://www.smartkarma.com/entities/beiersdorf-ag" target="_blank" data-smartkarma-citation="entities:21588:1" rel="noopener">Beiersdorf AG (BEI GR)</a> and <a href="https://www.smartkarma.com/entities/king-slide-works-co-ltd" target="_blank" data-smartkarma-citation="entities:7130:1" rel="noopener">King Slide Works (2059 TT)</a> 
</li>
<li>For the twenty-six weeks since inception ended 19 May the combined innovation portfolio was +2.5%, versus DJIA-0.9%, S&amp;P500+5.7%, Nasdaq+13.6%, Russell2000 -4.1%, MSCI-ACWI-ETF+6.9%, S&amp;P midcap 400 -2.2%, all in US$ terms</li>
<li>Small-Cap (+4.1%) versus Russell2000 (-4.1%) and midcap (+1.9%) versus S&amp;P400 (-2.2%) continues to outperform benchmarks, but the omission of mega-tech names has hurt large-cap portfolio (+2.6%) versus S&amp;P500 (+5.7%) . </li>
</ul>


The three companies we write about this week are Raytheon Technologies (RTX US)Beiersdorf AG (BEI GR) and King Slide Works (2059 TT) 

For the twenty-six weeks since inception ended 19 May the combined innovation portfolio was +2.5%, versus DJIA-0.9%, S&amp;P500+5.7%, Nasdaq+13.6%, Russell2000 -4.1%, MSCI-ACWI-ETF+6.9%, S&amp;P midcap 400 -2.2%, all in US$ terms
Small-Cap (+4.1%) versus Russell2000 (-4.1%) and midcap (+1.9%) versus S&amp;P400 (-2.2%) continues to outperform benchmarks, but the omission of mega-tech names has hurt large-cap portfolio (+2.6%) versus S&amp;P500 (+5.7%) . 


The Innovations Portfolios - Week Twenty Six

<ul>
<li>The three companies we write about this week are <a href="https://www.smartkarma.com/entities/contemporary-amperex-techn-a" target="_blank" data-smartkarma-citation="entities:24404:1" rel="noopener">CATL (A) (300750 CH)</a> , <a href="https://www.smartkarma.com/entities/kimberly-clark-corp" target="_blank" data-smartkarma-citation="entities:2292:1" rel="noopener">Kimberly Clark (KMB US)</a> and <a href="https://www.smartkarma.com/entities/blackberry-ltd" target="_blank" data-smartkarma-citation="entities:25472:1" rel="noopener">BlackBerry Ltd (BB CN)</a> </li>
<li>For the twenty-one weeks since inception ended 14 April the combined innovation portfolio was +3.6%, versus DJIA +0.4%, S&amp;P500 +4.3%, Nasdaq +8.8%, Russell2000 -3.7%, MSCI-ACWI-ETF +6.2%, all in US$ terms</li>
<li>For the same period the small cap innovation portfolio was up +5.9%, the mid cap portfolio was up +4.4% and the large cap portfolio was up +3.4%</li>
</ul>


The three companies we write about this week are CATL (A) (300750 CH) , Kimberly Clark (KMB US) and BlackBerry Ltd (BB CN) 
For the twenty-one weeks since inception ended 14 April the combined innovation portfolio was +3.6%, versus DJIA +0.4%, S&amp;P500 +4.3%, Nasdaq +8.8%, Russell2000 -3.7%, MSCI-ACWI-ETF +6.2%, all in US$ terms
For the same period the small cap innovation portfolio was up +5.9%, the mid cap portfolio was up +4.4% and the large cap portfolio was up +3.4%


The Innovations Portfolios - Week Twenty One

Japan

Kao Corporation is a manufacturer of household and chemical products. The company produces cosmetics, laundry and cleaning products, hygiene products, fatty chemicals, edible oils, and specialty chemicals.

Kao Corp (4452 JP)

Kao (4452) | Is It Time to Buy This Dividend Aristocrat?

Kao has the lonest period of consecutive earnings growth in the Nikkei's new "Consecutive Dividend Growth Stock Index". With a dividend yield of...

Mark Chadwick

Japanese Cosmetics Ready to Blossom with Asian Visitors

Japanese cosmetics companies were hesitant to revise their inbound demand projections despite expected increased demand from returning Asian...

Oshadhi Kumarasiri

Ohayo Japan| Reality Check from Higher Yields; NUGGET: Yield Game - Japanese Investors on the Hunt

US Yields higher; SPX500 falls again; Apple, Amazon beat; Nikkei Futures -0.5% vs Cash; USDJPY 142.5; BOJ Emergency Bond Buying to slow rapid yield...

Mark Chadwick

The Innovations Portfolios - Week Twenty Six

The small-Cap (+4.1%) and midcap (+1.9%) portfolios continues to outperform respective benchmarks, but the willful omission of mega-tech names has...

Pyari Menon

The Innovations Portfolios - Week Twenty One

For the twenty-one weeks since inception ended 14 April the innovation small cap portfolio was up 5.9%, mid cap portfolio was up 4.4% and the large...

Pyari Menon

Kao (4452) | Is It Time to Buy This Dividend Aristocrat?

Kao has the lonest period of consecutive earnings growth in the Nikkei's new "Consecutive Dividend Growth Stock Index". With a dividend yield of...

Mark Chadwick

Japanese Cosmetics Ready to Blossom with Asian Visitors

​Japanese cosmetics companies were hesitant to revise their inbound demand projections despite expected increased demand from returning Asian...

Oshadhi Kumarasiri

Ohayo Japan| Reality Check from Higher Yields; NUGGET: Yield Game - Japanese Investors on the Hunt

US Yields higher; SPX500 falls again; Apple, Amazon beat; Nikkei Futures -0.5% vs Cash; USDJPY 142.5; BOJ Emergency Bond Buying to slow rapid yield...

Mark Chadwick

The Innovations Portfolios - Week Twenty Six

The small-Cap (+4.1%) and midcap (+1.9%) portfolios continues to outperform respective benchmarks, but the willful omission of mega-tech names has...

Pyari Menon

The Innovations Portfolios - Week Twenty One

For the twenty-one weeks since inception ended 14 April the innovation small cap portfolio was up 5.9%, mid cap portfolio was up 4.4% and the large...

Pyari Menon

Japanese cosmetics companies were hesitant to revise their inbound demand projections despite expected increased demand from returning Asian...