'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)

<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/145/201/original/File%202020-07-10%204%2058%2031.jpeg?1594328270" class="editor-image img-responsive" data-smartkarma-image-id="145201"></figure><div class="content-caption">Source • Our World In Data</div>
COVID-19 RETURNS - The other 'result' reported yesterday was the record daily COVID-19 new case count for Tokyo of 224 and a three-month nationwide high of 354. Japan's 7-day rolling average is now close to that of Italy. Although hospital capacity is no longer an issue and only 216 people are in critical care, the pace of normalisation will have to be readjusted.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/145/202/original/2020-07-10_06-33-39.png?1594330447" class="editor-image img-responsive" data-smartkarma-image-id="145202"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/145/203/original/2020-07-10_06-37-00.png?1594330642" class="editor-image img-responsive" data-smartkarma-image-id="145203"></figure><div class="content-caption">Source • Japan Analytics</div>
NEW LOWS - With three large retailers reporting weak quarters, both our Results Score and Interim Forecast/Revision Score reached new ten-year lows. The Annual Forecast/Revision Score is flattered by a high degree of forecasting reticence at present. The Cabinet Office Leading Indicator of Business Conditions suggests that these Scores will close the 'gap' to the 2009 lows in the next month.
DAILY STATS
</div><hr><div>31 Quarterly Results</div><div><ul>
<li>
Results Score: 7 Positive / 0 Neutral / 24 Negative</li>
<li>
Average Results Score Change: -4.9</li>
<li>
Average % Change in Revenue: -9.6% Quarter YoY / +1.4% Rolling TTM YoY</li>
<li>
Average Operating Profit Margin Change: -0.9ppt</li>
</ul></div><hr><div> 12 Annual • 3 Interim Forecasts/Revisions</div><div><ul>
<li>
Annual Forecast/Revision Score: 5 Positive / 0 Neutral / 7 Negative</li>
<li>
Interim Forecast/Revision Score Change: 1 Positive / 0 Neutral / 2 Negative</li>
<li>
Average Forecast/Revision Score Change: -4.5</li>
</ul></div>


Source • Our World In Data
COVID-19 RETURNS - The other 'result' reported yesterday was the record daily COVID-19 new case count for Tokyo of 224 and a three-month nationwide high of 354. Japan's 7-day rolling average is now close to that of Italy. Although hospital capacity is no longer an issue and only 216 people are in critical care, the pace of normalisation will have to be readjusted.
Source • Japan Analytics
NEW LOWS - With three large retailers reporting weak quarters, both our Results Score and Interim Forecast/Revision Score reached new ten-year lows. The Annual Forecast/Revision Score is flattered by a high degree of forecasting reticence at present. The Cabinet Office Leading Indicator of Business Conditions suggests that these Scores will close the 'gap' to the 2009 lows in the next month.
DAILY STATS
31 Quarterly Results

Results Score: 7 Positive / 0 Neutral / 24 Negative

Average Results Score Change: -4.9

Average % Change in Revenue: -9.6% Quarter YoY / +1.4% Rolling TTM YoY

Average Operating Profit Margin Change: -0.9ppt
 12 Annual • 3 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 5 Positive / 0 Neutral / 7 Negative

Interim Forecast/Revision Score Change: 1 Positive / 0 Neutral / 2 Negative

Average Forecast/Revision Score Change: -4.5


🇯🇵 JAPAN • Results & Revisions 9th July - COVID-19 Returns & New Lows

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

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

JapanConsuming was founded by Michael Causton and Roy Larke. 

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are already predicting a completely new world in one way or another, but the reality is likely more prosaic.What is certain is that the Japanese consumer economy will recover and it is just a question of when.The most likely effect of the crisis is that it will catalyse a period of change already in process and which also happens to be one of the most dramatic and far-reaching seen so far in retail.But there is one trend that may well reverse as more businesses go under or contract, providing relief for many retailers: the labour shortage and rise in wages.The following offers an in-depth review of both the impact of the current crisis and implications as well as the long-term trends in Japanese retailing, providing insight into which sectors, formats and specific companies will win and lose in the next three years.For a short read, we provide the conclusions and winners and losers first.

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are already predicting a completely new world in one way or another, but the reality is likely more prosaic.What is certain is that the Japanese consumer economy will recover and it is just a question of when.The most likely effect of the crisis is that it will catalyse a period of change already in process and which also happens to be one of the most dramatic and far-reaching seen so far in retail.But there is one trend that may well reverse as more businesses go under or contract, providing relief for many retailers: the labour shortage and rise in wages.The following offers an in-depth review of both the impact of the current crisis and implications as well as the long-term trends in Japanese retailing, providing insight into which sectors, formats and specific companies will win and lose in the next three years.For a short read, we provide the conclusions and winners and losers first.

After Covid: The Future for Japanese Retail: Winners & Losers

Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Cross Asset Strategy

The overall expectation at the start of H1 2019, was that following a decade of seeing growth as the key focus (as ultra-accommodative global monetary policies provided cheap capital), the world would see a return to value. However, as we sit amid H1 2020 and Covid-19 expectation has not materialised.As part of the Covid-19 response, Interest rates are decreasing en-masse without a clear time frame on their reversal, investors in value orientated stocks are now being forced to adjust further to the new fiscal environment. However, as the Asia Pacific value / growth ratio nears a minus 2 standard deviation to the longer-term average, the probability of a reversal increases.We select 16 key names primed to continue our out performing screen, which delivered on average a 120bps of out performance since October 2019 <a href="https://www.smartkarma.com/insights/screening-the-silk-road-small-mid-cap-free-cash-flow" target="_blank" data-smartkarma-citation="insights:28877" rel="noopener">Screening the Silk Road: (Small-)Mid Cap Free Cash Flow</a> .

The overall expectation at the start of H1 2019, was that following a decade of seeing growth as the key focus (as ultra-accommodative global monetary policies provided cheap capital), the world would see a return to value. However, as we sit amid H1 2020 and Covid-19 expectation has not materialised.As part of the Covid-19 response, Interest rates are decreasing en-masse without a clear time frame on their reversal, investors in value orientated stocks are now being forced to adjust further to the new fiscal environment. However, as the Asia Pacific value / growth ratio nears a minus 2 standard deviation to the longer-term average, the probability of a reversal increases.We select 16 key names primed to continue our out performing screen, which delivered on average a 120bps of out performance since October 2019 Screening the Silk Road: (Small-)Mid Cap Free Cash Flow . 

Screening the Silk Road: (Small) Mid Cap Free Cash Flow

The Japanese government and larger retailers are still gung-ho about cashless payment systems. Cash, which still makes up 60-70% of all transactions in Japan, is a major cost for larger retailers but cashless systems also come with a cost in terms of technology and fees, and smaller vendors are far less impressed so far despite government incentives.

The Japanese government and larger retailers are still gung-ho about cashless payment systems. Cash, which still makes up 60-70% of all transactions in Japan, is a major cost for larger retailers but cashless systems also come with a cost in terms of technology and fees, and smaller vendors are far less impressed so far despite government incentives.

Some Resistance to Cashless Payments in Japan

The following is an in-depth review of the drugstore sector and the impact of the Cocokara Fine and Matsukiyo merger on other key drugstore stocks, highlighting the likely winners and losers in the next 3-5 years.
The drugstore sector is about to consolidate more rapidly than at any time in its history, with big implications for the cosmetics, medicines, food and toiletries industries and, among retailers, worries for supermarkets and convenience stores.
The imminent merger of <a href="https://www.smartkarma.com/entities/matsumotokiyoshi-holdings-co" target="_blank" data-smartkarma-citation="entities:2259:1" rel="noopener">Matsumotokiyoshi Holdings Co (3088 JP)</a> and <a href="https://www.smartkarma.com/entities/cocokara-fine-inc" target="_blank" data-smartkarma-citation="entities:15447:1" rel="noopener">Cocokara Fine (3098 JP)</a> will trigger a wave of other mergers among competitors big and small, creating a modernised sector with huge buying power across many product categories.
In food, in particular, this buying power is already causing headaches for retailers in regions like Kyushu where drugstore discounters are strong and this trend will play out across Japan over the next few years.  While the drugstore market may not grow, its leaders will.

The following is an in-depth review of the drugstore sector and the impact of the Cocokara Fine and Matsukiyo merger on other key drugstore stocks, highlighting the likely winners and losers in the next 3-5 years.
The drugstore sector is about to consolidate more rapidly than at any time in its history, with big implications for the cosmetics, medicines, food and toiletries industries and, among retailers, worries for supermarkets and convenience stores.
The imminent merger of Matsumotokiyoshi Holdings Co (3088 JP) and Cocokara Fine (3098 JP) will trigger a wave of other mergers among competitors big and small, creating a modernised sector with huge buying power across many product categories.
In food, in particular, this buying power is already causing headaches for retailers in regions like Kyushu where drugstore discounters are strong and this trend will play out across Japan over the next few years.  While the drugstore market may not grow, its leaders will.

Japanese Drugstores: With Maturity Comes Marriage

Japan

LAWSON, INC. operates a chain of convenience stores in Japan. The Company sells a variety of products including fast food, beverages, snacks, magazines, newspapers, and sundry goods.

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Lawson Inc (2651 JP)

🇯🇵 JAPAN • Results & Revisions 9th July - COVID-19 Returns & New Lows

COVID-19 RETURNS - The other 'result' reported yesterday was the record daily COVID-19 new case count for Tokyo of 224 and a three-month...

Campbell Gunn

After Covid: The Future for Japanese Retail: Winners & Losers

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are...

Michael Causton

Screening the Silk Road: (Small) Mid Cap Free Cash Flow

The overall expectation at the start of H1 2019, was that following a decade of seeing growth as the key focus (as ultra-accommodative global...

David Lepper

Some Resistance to Cashless Payments in Japan

The Japanese government and larger retailers are still gung-ho about cashless payment systems. Cash, which still makes up 60-70% of all...

Michael Causton

Japanese Drugstores: With Maturity Comes Marriage

The following is an in-depth review of the drugstore sector and the impact of the Cocokara Fine and Matsukiyo merger on other key drugstore stocks,...

Michael Causton

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