'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

<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/068/507/original/2018-11-02_10-20-29.png?1541121653" class="editor-image img-responsive" data-smartkarma-image-id="68507"></figure>Source: Japan Analytics
NB: companies are colour-coded by sector
</div>28 YEARS OF NON-FINANCIAL MARKET LEADERSHIP - To offer some light relief from the current market, we have compiled a graphic illustrating the evolution in the ranking of the leading non-financial Japanese companies by market capitalisation measured at the end of each of the last 28 years.METHODOLOGY - Our comments follow in the detail below, but first a few notes:-<ul>
<li>In the interests of clarity (/sanity?), financials have been omitted. Twelve of the Top 20-ranked companies in 1990 were financials. However, only <a href="https://www.smartkarma.com/entities/742" target="_blank" data-smartkarma-citation="entities:742:1">Nomura (8604 JP)</a>, <a href="https://www.smartkarma.com/entities/6483" target="_blank" data-smartkarma-citation="entities:6483:1">Aozora (8304 JP)</a> and <a href="https://www.smartkarma.com/entities/16897" target="_blank" data-smartkarma-citation="entities:16897:1">Shinsei (8303 JP)</a> have survived in their original corporate structure and have the same ticker code. Our chart would have otherwise have included the now-merged IBJ, Fuji Bank, Dai-Ichi Kangyo Bank, Mitsubishi Bank, Sakura Bank, Sumitomo Bank, Tokai Bank, Sanwa Bank and Mitsubishi Trust Bank.  Excluded from the present-day Top 20 are <a href="https://www.smartkarma.com/entities/218" target="_blank" data-smartkarma-citation="entities:218:1">Mitsubishi UFJ (8306 JP)</a>, <a href="https://www.smartkarma.com/entities/217" target="_blank" data-smartkarma-citation="entities:217:1">Sumitomo Mitsui Financial (8316 JP)</a>, <a href="https://www.smartkarma.com/entities/838" target="_blank" data-smartkarma-citation="entities:838:1">Japan Post Bank (7182 JP)</a>, <a href="https://www.smartkarma.com/entities/359" target="_blank" data-smartkarma-citation="entities:359:1">Japan Post Holdings (6178 JP)</a> and <a href="https://www.smartkarma.com/entities/219" target="_blank" data-smartkarma-citation="entities:219:1">Mizuho Financial (8411 JP)</a> from the present day.</li>
<li>Only companies that were in the Top 20 in 1990 or 2018, as well as those companies that have been in the Top 10 for at least three of the last 28 years, have been included. </li>
<li>Two companies from 1990's Top 20 - Seibu Railway and Japan Airlines - have since been delisted. Although they have relisted as <a href="https://www.smartkarma.com/entities/458" target="_blank" data-smartkarma-citation="entities:458:1">Seibu Holdings (9024 JP)</a> and <a href="https://www.smartkarma.com/entities/1184" target="_blank" data-smartkarma-citation="entities:1184:1">Japan Airlines (9201 JP)</a>, they are no longer highly-ranked.</li>
<li>Seven current Top 20 companies - (<a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">Softbank (9984 JP)</a>, <a href="https://www.smartkarma.com/entities/1089" target="_blank" data-smartkarma-citation="entities:1089:1">NTT Docomo (9437 JP)</a>, <a href="https://www.smartkarma.com/entities/639" target="_blank" data-smartkarma-citation="entities:639:1">KDDI (9433 JP)</a>, <a href="https://www.smartkarma.com/entities/13498" target="_blank" data-smartkarma-citation="entities:13498:1">Japan Tobacco (2914 JP)</a>, <a href="https://www.smartkarma.com/entities/13520" target="_blank" data-smartkarma-citation="entities:13520:1">Central Japan Railway (9022 JP)</a>, <a href="https://www.smartkarma.com/entities/751" target="_blank" data-smartkarma-citation="entities:751:1">Fast Retailing (9983 JP)</a> and <a href="https://www.smartkarma.com/entities/15070" target="_blank" data-smartkarma-citation="entities:15070:1">Recruit (6098 JP)</a>)  - have listed during the last 28 years. </li>
</ul>THE 2050 RANKING?- Which of the current market leaders will still be in the Top 20 in 2050 in their current guise? For those still around to read this in 32 year's time, we would wager on just three - <a href="https://www.smartkarma.com/entities/3077" target="_blank" data-smartkarma-citation="entities:3077:1">Keyence (6861 JP)</a>, <a href="https://www.smartkarma.com/entities/73" target="_blank" data-smartkarma-citation="entities:73:1">Toyota Motor (7203 JP)</a> and <a href="https://www.smartkarma.com/entities/563" target="_blank" data-smartkarma-citation="entities:563:1">Sony (6758 JP)</a>.


Source: Japan Analytics
NB: companies are colour-coded by sector
28 YEARS OF NON-FINANCIAL MARKET LEADERSHIP - To offer some light relief from the current market, we have compiled a graphic illustrating the evolution in the ranking of the leading non-financial Japanese companies by market capitalisation measured at the end of each of the last 28 years.METHODOLOGY - Our comments follow in the detail below, but first a few notes:-
In the interests of clarity (/sanity?), financials have been omitted. Twelve of the Top 20-ranked companies in 1990 were financials. However, only Nomura (8604 JP), Aozora (8304 JP) and Shinsei (8303 JP) have survived in their original corporate structure and have the same ticker code. Our chart would have otherwise have included the now-merged IBJ, Fuji Bank, Dai-Ichi Kangyo Bank, Mitsubishi Bank, Sakura Bank, Sumitomo Bank, Tokai Bank, Sanwa Bank and Mitsubishi Trust Bank.  Excluded from the present-day Top 20 are Mitsubishi UFJ (8306 JP), Sumitomo Mitsui Financial (8316 JP), Japan Post Bank (7182 JP), Japan Post Holdings (6178 JP) and Mizuho Financial (8411 JP) from the present day.
Only companies that were in the Top 20 in 1990 or 2018, as well as those companies that have been in the Top 10 for at least three of the last 28 years, have been included. 
Two companies from 1990's Top 20 - Seibu Railway and Japan Airlines - have since been delisted. Although they have relisted as Seibu Holdings (9024 JP) and Japan Airlines (9201 JP), they are no longer highly-ranked.
Seven current Top 20 companies - (Softbank (9984 JP), NTT Docomo (9437 JP), KDDI (9433 JP), Japan Tobacco (2914 JP), Central Japan Railway (9022 JP), Fast Retailing (9983 JP) and Recruit (6098 JP))  - have listed during the last 28 years. 
THE 2050 RANKING?- Which of the current market leaders will still be in the Top 20 in 2050 in their current guise? For those still around to read this in 32 year's time, we would wager on just three - Keyence (6861 JP), Toyota Motor (7203 JP) and Sony (6758 JP). 

Japan: The Evolution Of (Non-Financial) Market Leadership

Differentiated global TMT & Internet Research

New Street Research Insights

New Street Research

Research is provided by our team of experienced analysts. Our work is idea driven, based on independence of thought, sector expertise, and firmly focused on fundamentals and valuation of telecoms and internet names globally. New Street is headquartered in London with offices in New York, Singapore and Australia. 

New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:

Pan European Telecom Services and Cable
US Telecoms, Cable, Satellite and Towers
Global Emerging Market Telecoms
Japan Telecoms
Asian Internet
Pan European Healthcare
US Healthcare
Japanese Healthcare

We also provide debt research on:
Pan European Telecom Services and Cable

Equity Bottom-Up

Japan has been one of the few "good" telecom markets globally in the past couple of years, with a relatively light regulatory touch and an oligopoly that delivered very high quality service and, in return, has been allowed to report modestly rising shareholder returns. It is also perhaps the most 5G ready market globally in terms of network densification. Previous attempts by the government to jawbone down cellular prices came to naught and it was thought the same would happen this time with comments from the government seeking lower prices.  So it came as quite a shock to hear <a href="https://www.smartkarma.com/entities/1089" target="_blank" data-smartkarma-citation="entities:1089:1">NTT Docomo (9437 JP)</a> discuss slashing prices by 20-40% next financial year and to crush profitability for several years. Stock prices reacted savagely to the news with an increased share buyback at DoCoMo doing nothing to assuage investors.

Japan has been one of the few "good" telecom markets globally in the past couple of years, with a relatively light regulatory touch and an oligopoly that delivered very high quality service and, in return, has been allowed to report modestly rising shareholder returns. It is also perhaps the most 5G ready market globally in terms of network densification. Previous attempts by the government to jawbone down cellular prices came to naught and it was thought the same would happen this time with comments from the government seeking lower prices.  So it came as quite a shock to hear NTT Docomo (9437 JP) discuss slashing prices by 20-40% next financial year and to crush profitability for several years. Stock prices reacted savagely to the news with an increased share buyback at DoCoMo doing nothing to assuage investors.  

NTT DoCoMo Shocks with Price Cuts. The Last 'good" Telecom Market Succumbs to Government Pressure

Specialist in Japanese equities, Kheiron Group

Nathan Ramler, CFA

Specialist in Japanese equities

Kheiron Group

Tokyo-based with experience in global equity markets and M&A. Striving to add value and insight. 

Specialists in Japan

Thematic (Sector/Industry)

5G sounds great, right? – faster speeds, more capacity, improved efficiency – but what does that really mean? The reality is that 5G isn’t needed for consumer services. In Japan, 4G and its improvements can be more than sufficient to deliver network speeds and capacity that give consumers a good experience. That doesn’t mean that 5G won’t improve consumers’ service experience, but we expect the main use cases for 5G to be industrial, not consumer. We do anticipate 5G in Japan will open up opportunities for new services and revenue streams.Japanese telco capex has been trending lower. <a href="https://www.smartkarma.com/entities/623" target="_blank" data-smartkarma-citation="entities:623:1">NTT (9432 JP)</a>, <a href="https://www.smartkarma.com/entities/1089" target="_blank" data-smartkarma-citation="entities:1089:1">NTT Docomo (9437 JP)</a>, <a href="https://www.smartkarma.com/entities/639" target="_blank" data-smartkarma-citation="entities:639:1">KDDI (9433 JP)</a>, <a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">Softbank (9984 JP)</a>, and even <a href="https://www.smartkarma.com/entities/31" target="_blank" data-smartkarma-citation="entities:31:1">Rakuten (4755 JP)</a> are all investing in 5G, but telco cash flows are not waiting to be crushed by 5G spending because 5G can piggyback on existing infrastructure. The technology comes as a more gradual shift and is complementary to 4G technologies, so we do not expect 5G to result in material changes or pressures on absolute capex spending. Yes, there are some new technological elements needed in the networks and previous generational shifts of technology have not always been smooth, but we see no call to panic about 5G.In this insight we look at:<ol>
<li>The timeline for 5G and an explanation of what 5G is</li>
<li>Use cases for the technology and competitive threats to the network operators</li>
<li>A deep dive into the technology itself – if you want to know your MIMO from your NOMA, come join us as we let our inner geek run rampant</li>
</ol>

5G sounds great, right? – faster speeds, more capacity, improved efficiency – but what does that really mean? The reality is that 5G isn’t needed for consumer services. In Japan, 4G and its improvements can be more than sufficient to deliver network speeds and capacity that give consumers a good experience. That doesn’t mean that 5G won’t improve consumers’ service experience, but we expect the main use cases for 5G to be industrial, not consumer. We do anticipate 5G in Japan will open up opportunities for new services and revenue streams.Japanese telco capex has been trending lower. NTT (9432 JP), NTT Docomo (9437 JP), KDDI (9433 JP), Softbank (9984 JP), and even Rakuten (4755 JP) are all investing in 5G, but telco cash flows are not waiting to be crushed by 5G spending because 5G can piggyback on existing infrastructure. The technology comes as a more gradual shift and is complementary to 4G technologies, so we do not expect 5G to result in material changes or pressures on absolute capex spending. Yes, there are some new technological elements needed in the networks and previous generational shifts of technology have not always been smooth, but we see no call to panic about 5G.In this insight we look at:
The timeline for 5G and an explanation of what 5G is
Use cases for the technology and competitive threats to the network operators
A deep dive into the technology itself – if you want to know your MIMO from your NOMA, come join us as we let our inner geek run rampant


5G Is Coming – Don’t Panic. Sensible Plans from SoftBank (9984 JP), Docomo (9437 JP), KDDI (9433 JP)

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">Softbank Group (9984 JP)</a> is seeking a valuation of about $90 billion for its Japanese mobile telecoms business (SoftBank KK) in an IPO, according to press reports. SoftBank plans to complete the sale of $20-25 billion worth of shares in SoftBank KK by late December.<div class="content-highlight">We believe that SoftBank KK can command a premium multiple due to its ability to offer a high “guaranteed” dividend yield. On the basis of a premium multiple, the rumoured $90 billion valuation can be justified. However, our analysis suggests that SoftBank KK is fully priced at this valuation.</div>

Softbank Group (9984 JP) is seeking a valuation of about $90 billion for its Japanese mobile telecoms business (SoftBank KK) in an IPO, according to press reports. SoftBank plans to complete the sale of $20-25 billion worth of shares in SoftBank KK by late December.We believe that SoftBank KK can command a premium multiple due to its ability to offer a high “guaranteed” dividend yield. On the basis of a premium multiple, the rumoured $90 billion valuation can be justified. However, our analysis suggests that SoftBank KK is fully priced at this valuation.

SoftBank KK IPO Preview: Paying Dividends at a Full Price

APAC IPOs & Placements

Zhen Zhou, Toh

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">Softbank Group (9984 JP)</a> is looking IPO to its domestic telecommunications business and is said to be seeking a valuation of US$90bn. 
The valuation seems a little too ambitious based on our brief analysis of the industry landscape with Rakuten looking to enter by 2019 and make things more competitive. Based on past examples, new entrants into the telecommunication market have resorted to competing on price first in order to gain market share. If the same happens in Japan, we will likely see ARPU and market share erosion in the coming few years.
In this insight, we will take a look at the company's history, the industry dynamics of Japan's telecommunication industry, and value the company based on forward peer multiples.

Softbank Group (9984 JP) is looking IPO to its domestic telecommunications business and is said to be seeking a valuation of US$90bn. 
The valuation seems a little too ambitious based on our brief analysis of the industry landscape with Rakuten looking to enter by 2019 and make things more competitive. Based on past examples, new entrants into the telecommunication market have resorted to competing on price first in order to gain market share. If the same happens in Japan, we will likely see ARPU and market share erosion in the coming few years.
In this insight, we will take a look at the company's history, the industry dynamics of Japan's telecommunication industry, and value the company based on forward peer multiples.

Softbank Telecom Pre-IPO Review - Vision Is Needed to Arrive at US$90bn Valuation

Japan

KDDI CORPORATION provides mobile communication services and sells mobile devices.  The Company also is a broadband provider.

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KDDI Corp (9433 JP)

Japan: The Evolution Of (Non-Financial) Market Leadership

28 YEARS OF NON-FINANCIAL MARKET LEADERSHIP - To offer some light relief from the current market, we have compiled a graphic illustrating the...

Campbell Gunn

NTT DoCoMo Shocks with Price Cuts. The Last 'good" Telecom Market Succumbs to Government Pressure

Japan has been one of the few "good" telecom markets globally in the past couple of years, with a relatively light regulatory touch and an...

New Street Research

5G Is Coming – Don’t Panic. Sensible Plans from SoftBank (9984 JP), Docomo (9437 JP), KDDI (9433 JP)

5G sounds great, right? – faster speeds, more capacity, improved efficiency – but what does that really mean? The reality is that 5G isn’t needed...

Nathan Ramler, CFA

SoftBank KK IPO Preview: Paying Dividends at a Full Price

Softbank Group (9984 JP) is seeking a valuation of about $90 billion for its Japanese mobile telecoms business (SoftBank KK) in an IPO, according...

Arun George

Softbank Telecom Pre-IPO Review - Vision Is Needed to Arrive at US$90bn Valuation

Softbank Group (9984 JP) is looking IPO to its domestic telecommunications business and is said to be seeking a valuation of US$90bn. The...

Zhen Zhou, Toh

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