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. 

Thematic (Sector/Industry)

<ul>
<li>2020-21 was the second year in a row to see a net fall in the number of SCs in Japan. Sales levels also fell to an unprecedented degree.</li>
<li>The good news is that 2021 has been better, with even city centre malls reducing sales falls by 20 points. But the crisis has exacerbated underlying pressures. </li>
<li>A significant clear out of the SC sector is now occurring as more uneconomic properties close.</li>
</ul>


2020-21 was the second year in a row to see a net fall in the number of SCs in Japan. Sales levels also fell to an unprecedented degree.
The good news is that 2021 has been better, with even city centre malls reducing sales falls by 20 points. But the crisis has exacerbated underlying pressures. 
A significant clear out of the SC sector is now occurring as more uneconomic properties close.


Japan Shopping Centres 2020-21 Review: A Shocking Year

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections. Additionally, 10-year yields in the US and Germany are breaking down below key support. These deteriorating market dynamics raise concerns of a deeper pullback, however other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market. Actionable themes highlighted in today's report include Health Care and Real Estate.</p>

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections. Additionally, 10-year yields in the US and Germany are breaking down below key support. These deteriorating market dynamics raise concerns of a deeper pullback, however other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market. Actionable themes highlighted in today's report include Health Care and Real Estate.

Global Equity Strategy: Mixed Market Environment Continues As Yields Break Down

'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.

<div style="text-align: center;"><strong>• NET GAIN • </strong></div><div><div class="content-caption">
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/590/original/2021-02-19_07-20-52.png?1613686864" class="editor-image img-responsive" data-smartkarma-image-id="189590"></figure><p></p></section> Source for all charts &amp; tables: Japan Analytics</div></div><div>
<p><strong>NET GAIN</strong> - Forecast Aggregate Net Income for the universe of  Japanese listed companies ended the quarter 23.8%  higher than three months ago - an increase of  ¥5.2 trillion. As a result, the market's forward earnings multiple has declined to 28 times following a 10% increase in total market value (ex REITs). The increase in forecast operating income is a more modest 10.2% reflecting the degree of previously-projected COVID-related extraordinary losses.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/591/original/2021-02-19_07-29-59.png?1613687413" class="editor-image img-responsive" data-smartkarma-image-id="189591"></figure></section><p><strong>TRAILING TWELVE MONTHS (TTM)</strong> - Trailing revenues and operating profits are still falling by 9.9% and 26.3%, respectively; however, operating income rose by 4.1% quarter-on-quarter as margins improved by 30 basis points. Despite a reasonable effort at cost-cutting, aggregate operating margins are still  228 bps below their mid-2018 peak, and it will take at least another eight quarters for that gap to be closed.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/595/original/2021-02-19_07-38-34.png?1613687927" class="editor-image img-responsive" data-smartkarma-image-id="189595"></figure></section><p><strong>FORECASTS</strong> - The majority of companies are forecasting for the year ending next month. Despite no change in the aggregate revenue forecast, the outlook for operating income increased by ¥3.7 trillion during the quarter resulting in a 50 bps operating margin uplift. </p>
</div><section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/596/original/2021-02-19_07-40-09.png?1613688021" class="editor-image img-responsive" data-smartkarma-image-id="189596"></figure><hr></section><p><strong>POSITIVE MOMENTUM</strong> - Both our forward-looking Results Score and Results &amp; Revision Score have returned to the positive after less than one year. Whether this merits a new thirty-year high in TOPIX is, however, a moot point. We would note that the Cabinet Office Leading Indicator of Business Conditions for December turned down for the first time since April 2020.   </p></section><div></div><div>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/597/original/2021-02-19_08-02-24.png?1613689355" class="editor-image img-responsive" data-smartkarma-image-id="189597"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/694/original/2021-02-19_16-02-06.png?1613718138" class="editor-image img-responsive" data-smartkarma-image-id="189694"></figure><hr></section><p><strong>SECTOR BREAKDOWN</strong> - The leading sectors in terms of one-month change in Results &amp; Revision Score are <strong>Other Commercial Products</strong>, <strong>Autos</strong>,<strong> Other Consumer Products</strong>, <strong>Metals</strong>, and <strong>Building Materials.</strong> The RRS 'losers' are <strong>Utilities</strong>, <strong>Internet Content &amp; Services</strong>, <strong>Food, Beverages &amp; Tobacco,</strong><strong>Retail</strong>, and <strong>Healthcare</strong>.  </p>
</div><div>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/700/original/2021-02-19_16-05-32.png?1613718344" class="editor-image img-responsive" data-smartkarma-image-id="189700"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/701/original/2021-02-19_16-06-12.png?1613718383" class="editor-image img-responsive" data-smartkarma-image-id="189701"></figure></section><hr>
</div><section></section><div><div>
<p>In the <strong>DETAIL</strong> section below, we shall review the actual results and initial and revised forecasts by Sector and highlight the best and worst-performing companies by one-quarter revenue and margin changes.</p>
<hr>
<p></p>
</div></div>

• NET GAIN • 
 Source for all charts &amp; tables: Japan Analytics
NET GAIN - Forecast Aggregate Net Income for the universe of  Japanese listed companies ended the quarter 23.8%  higher than three months ago - an increase of  ¥5.2 trillion. As a result, the market's forward earnings multiple has declined to 28 times following a 10% increase in total market value (ex REITs). The increase in forecast operating income is a more modest 10.2% reflecting the degree of previously-projected COVID-related extraordinary losses.
TRAILING TWELVE MONTHS (TTM) - Trailing revenues and operating profits are still falling by 9.9% and 26.3%, respectively; however, operating income rose by 4.1% quarter-on-quarter as margins improved by 30 basis points. Despite a reasonable effort at cost-cutting, aggregate operating margins are still  228 bps below their mid-2018 peak, and it will take at least another eight quarters for that gap to be closed.
FORECASTS - The majority of companies are forecasting for the year ending next month. Despite no change in the aggregate revenue forecast, the outlook for operating income increased by ¥3.7 trillion during the quarter resulting in a 50 bps operating margin uplift. 
POSITIVE MOMENTUM - Both our forward-looking Results Score and Results &amp; Revision Score have returned to the positive after less than one year. Whether this merits a new thirty-year high in TOPIX is, however, a moot point. We would note that the Cabinet Office Leading Indicator of Business Conditions for December turned down for the first time since April 2020.   
SECTOR BREAKDOWN - The leading sectors in terms of one-month change in Results &amp; Revision Score are Other Commercial Products, Autos, Other Consumer Products, Metals, and Building Materials. The RRS 'losers' are Utilities, Internet Content &amp; Services, Food, Beverages &amp; Tobacco,Retail, and Healthcare.  



In the DETAIL section below, we shall review the actual results and initial and revised forecasts by Sector and highlight the best and worst-performing companies by one-quarter revenue and margin changes.




🇯🇵 JAPAN • IT’S A WRAP - Winter 2020 Results & Revisions Review

<p style="text-align: center;"><strong>• THE POST-COVID ROTATION •</strong></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/193/original/2021-02-06_10-51-22.png?1612670102" class="editor-image img-responsive" data-smartkarma-image-id="187193"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/194/original/2021-02-06_10-51-43.png?1612670115" class="editor-image img-responsive" data-smartkarma-image-id="187194"></figure><div class="content-caption"> Source for all charts &amp; tables: Japan Analytics</div></section><p><strong>THE 2021 ROTATION BEGINS</strong> -  For most of the last year, the Japanese equity market has been led by overvalued and overbought high-quality growth companies in the <strong>Technology Hardware</strong>, <strong>Electrical Equipment</strong>, <strong>Internet</strong>, and <strong>Healthcare</strong> Sectors. These companies were deemed to be COVID-resistant and were consistently well-bid regardless of price. The stock leading this ''charge' were <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> +163%, <a href="https://www.smartkarma.com/entities/lasertec-corp" target="_blank" data-smartkarma-citation="entities:4126:1" rel="noopener">Lasertec (6920 JP)</a> +151%, <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" data-smartkarma-citation="entities:15441:1" rel="noopener">MonotaRO (3064 JP)</a> +108%, <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> +110%, and <a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec (6594 JP)</a> +97%. The only deep cyclical Sector that saw a significant recovery was <strong>Energy</strong>. Meanwhile, shares in domestically-orientated Sectors and companies heavily exposed to COVID-related delines in business activity languished despite valuations reaching ten or twenty-year lows.</p><p></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/199/original/2021-02-06_10-52-30.png?1612678419" class="editor-image img-responsive" data-smartkarma-image-id="187199"></figure></section><p><strong>THE VALUE RENAISSANCE</strong> - Over the last four weeks, however, a major shift in market sentiment has occurred as profit-taking in the former 'Quality-At-Any-Price' group has coincided with a significant rally in the latter 'Deep-Value' group. In terms of our Relative Price Score, the best-performing Sectors over the last month have been <strong>Media</strong>,<strong> Telecommunications</strong>, <strong>Restaurants</strong>, <strong>Building Material</strong>s, and <strong>Consumer Services</strong>. The best-performing larger caps have included <a href="https://www.smartkarma.com/entities/west-japan-railway-co" target="_blank" data-smartkarma-citation="entities:12077:1" rel="noopener">West Japan Railway (9021 JP)</a> +26%, <a href="https://www.smartkarma.com/entities/dentsu-inc" target="_blank" data-smartkarma-citation="entities:12434:1" rel="noopener">Dentsu (4324 JP)</a> +25%, <a href="https://www.smartkarma.com/entities/create-restaurants-holdings-inc" target="_blank" data-smartkarma-citation="entities:11513:1" rel="noopener">create restaurants (3387 JP)</a> +61%. With the second State of Emergency having capped Japan's third COVID wave and a vaccination programme likely to start next month, the market is discounting a post-COVID economic normalisation. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/216/original/2021-02-07_17-08-33.png?1612685331" class="editor-image img-responsive" data-smartkarma-image-id="187216"></figure></section><p><strong>RESULTS &amp; REVISION-DRIVEN</strong> - This change in market direction is also reflected in our earnings momentum scoring methodology - the Results &amp; Revision Score. Although only one-third of listed companies have reported mostly third-quarter results, the trends are broadly supportive of the current rotation. Cyclical and domestic Sectors such as <strong>Metals</strong>, <strong>Media</strong>, <strong>Consumer Services</strong>, <strong>Wholesale</strong>, <strong>Transport</strong>, and<strong> Real Estate</strong> are 'outperforming' the market's average earnings momentum, while the I<strong>nternet</strong>, <strong>Healthcare</strong>,<strong> Commerical Services</strong>, and <strong>Energy</strong> are lagging.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/306/original/2021-02-08_05-28-53.png?1612729747" class="editor-image img-responsive" data-smartkarma-image-id="187306"></figure><p><strong>TRAILING &amp; FORECAST EARNINGS BOTTOM</strong><strong>OUT</strong> -  While our scoring methodology is more forward-looking, the results and forecasts announced to date confirm that the economy bottomed out in the fourth calendar quarter of last year. With aggregate market capitalisation (ex REITs) close to a new long-term high, at least one year of earnings recovery has already been discounted.</p></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/227/original/2021-02-06_12-20-31.png?1612688721" class="editor-image img-responsive" data-smartkarma-image-id="187227"></figure></section><p></p><div>
<hr>
<p style="text-align: center;"><strong>• RESULTS &amp; REVISIONS SUMMARY - 5th FEBRUARY •</strong></p>
</div><div><p>Of Friday's 331 results announcements, 71% scored positively for earnings momentum despite trailing revenues falling by 3.8% on average. Operating margins rose by 90 basis points. 11% of companies were in the red for the quarter.  66% of the 134 annual forecasts/revision announcements scored positively, and the average Forecast/Revision score was +2.6 points.</p></div><div>
<p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p>
<p style="text-align: left;">Friday's 'best' pair of larger-cap companies is <a href="https://www.smartkarma.com/entities/agc-inc" target="_blank" data-smartkarma-citation="entities:2167:1" rel="noopener">AGC (5201 JP)</a> and <a href="https://www.smartkarma.com/entities/mitsui-fudosan-co-ltd" target="_blank" data-smartkarma-citation="entities:565:1" rel="noopener">Mitsui Fudosan (8801 JP)</a>, while the worst two announcements came from <a href="https://www.smartkarma.com/entities/fuji-heavy-industries-ltd" target="_blank" data-smartkarma-citation="entities:5439:1" rel="noopener">Subaru (7270 JP)</a> and the overvalued and overbought <a href="https://www.smartkarma.com/entities/daifuku-co-ltd" target="_blank" data-smartkarma-citation="entities:10408:1" rel="noopener">Daifuku (6383 JP)</a>.   For more, see the <strong>DETAIL</strong> section below.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/304/original/2021-02-08_05-26-25.png?1612729598" class="editor-image img-responsive" data-smartkarma-image-id="187304"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/305/original/2021-02-08_05-27-07.png?1612729640" class="editor-image img-responsive" data-smartkarma-image-id="187305"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/307/original/2021-02-08_05-31-32.png?1612729905" class="editor-image img-responsive" data-smartkarma-image-id="187307"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/308/original/2021-02-08_05-32-44.png?1612729980" class="editor-image img-responsive" data-smartkarma-image-id="187308"></figure></section><p></p>
</div>

• THE POST-COVID ROTATION • Source for all charts &amp; tables: Japan AnalyticsTHE 2021 ROTATION BEGINS -  For most of the last year, the Japanese equity market has been led by overvalued and overbought high-quality growth companies in the Technology Hardware, Electrical Equipment, Internet, and Healthcare Sectors. These companies were deemed to be COVID-resistant and were consistently well-bid regardless of price. The stock leading this ''charge' were M3 Inc (2413 JP) +163%, Lasertec (6920 JP) +151%, MonotaRO (3064 JP) +108%, GMO Payment Gateway (3769 JP) +110%, and Nidec (6594 JP) +97%. The only deep cyclical Sector that saw a significant recovery was Energy. Meanwhile, shares in domestically-orientated Sectors and companies heavily exposed to COVID-related delines in business activity languished despite valuations reaching ten or twenty-year lows.THE VALUE RENAISSANCE - Over the last four weeks, however, a major shift in market sentiment has occurred as profit-taking in the former 'Quality-At-Any-Price' group has coincided with a significant rally in the latter 'Deep-Value' group. In terms of our Relative Price Score, the best-performing Sectors over the last month have been Media, Telecommunications, Restaurants, Building Materials, and Consumer Services. The best-performing larger caps have included West Japan Railway (9021 JP) +26%, Dentsu (4324 JP) +25%, create restaurants (3387 JP) +61%. With the second State of Emergency having capped Japan's third COVID wave and a vaccination programme likely to start next month, the market is discounting a post-COVID economic normalisation. RESULTS &amp; REVISION-DRIVEN - This change in market direction is also reflected in our earnings momentum scoring methodology - the Results &amp; Revision Score. Although only one-third of listed companies have reported mostly third-quarter results, the trends are broadly supportive of the current rotation. Cyclical and domestic Sectors such as Metals, Media, Consumer Services, Wholesale, Transport, and Real Estate are 'outperforming' the market's average earnings momentum, while the Internet, Healthcare, Commerical Services, and Energy are lagging.TRAILING &amp; FORECAST EARNINGS BOTTOMOUT -  While our scoring methodology is more forward-looking, the results and forecasts announced to date confirm that the economy bottomed out in the fourth calendar quarter of last year. With aggregate market capitalisation (ex REITs) close to a new long-term high, at least one year of earnings recovery has already been discounted.

• RESULTS &amp; REVISIONS SUMMARY - 5th FEBRUARY •
Of Friday's 331 results announcements, 71% scored positively for earnings momentum despite trailing revenues falling by 3.8% on average. Operating margins rose by 90 basis points. 11% of companies were in the red for the quarter.  66% of the 134 annual forecasts/revision announcements scored positively, and the average Forecast/Revision score was +2.6 points.
• BEST &amp; WORST •
Friday's 'best' pair of larger-cap companies is AGC (5201 JP) and Mitsui Fudosan (8801 JP), while the worst two announcements came from Subaru (7270 JP) and the overvalued and overbought Daifuku (6383 JP).   For more, see the DETAIL section below.



🇯🇵 JAPAN • The Post-COVID Rotation from Growth to Value Begins + 02/05 Results & Revisions Update

<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/172/203/original/2020-11-17_12-24-48.png?1605583510" class="editor-image img-responsive" data-smartkarma-image-id="172203"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div>
<p><strong>BRIGHTER, LATER</strong> - Forecast Aggregate Net Income for the universe of Japanese listed companies ended the quarter, higher than three months ago by ¥1.2 trillion. As a result, the market's forward multiple is unchanged at 31 times, despite a 7% rise in market capitalisation. Although this 'season' was the best in two years in terms of forecast profits, trailing earnings are still falling, by almost ¥3 trillion in the case of operating income. Much of the market optimism rests on a Japan experiencing a mild COVID winter and the impact of the incoming Biden administration's policy pronouncements on the US dollar. </p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/172/219/original/2020-11-17_13-33-54.png?1605587647" class="editor-image img-responsive" data-smartkarma-image-id="172219"></figure></section><p><strong>5.2% TTM OPERATING MARGINS</strong> - Aggregate Operating Income has declined by a third year-on-year on a 10% decline in revenues. The good news is that the pace of decline is slowing. Nevertheless, all of the Abe-era gains in earnings have now been unwound.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/172/230/original/2020-11-17_13-47-49.png?1605588488" class="editor-image img-responsive" data-smartkarma-image-id="172230"></figure><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/172/394/original/2020-11-18_07-24-55.png?1605651921" class="editor-image img-responsive" data-smartkarma-image-id="172394"></figure></section><p><strong>4.8% FORECAST OPERATING MARGINS</strong> - Operating margins are forecast to contract further over the next five months to 4.8%. Forecast revenues and operating income are both 3% lower than three months ago, the slowest rate of attrition in three quarters. The current market euphoria, which has taken total capitalisation to within 3% of the pre-COVID high is implying that the next 'print' of this data series, will be positive.    </p></section><section class="figure"></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/172/256/original/2020-11-17_14-22-29.png?1605590564" class="editor-image img-responsive" data-smartkarma-image-id="172256"></figure></section><p><strong>POSITIVE MOMENTUM</strong> - The sharp recovery in earnings momentum, which the market has been discounting is now materialising. Our Forecast/Revision Score has returned to March levels while the trailing Results Score has bottomed out well above the low of 2009. </p>
<section class="figure"><section class="figure"></section><div class="content-highlight"><p>In the <strong>DETAIL</strong> section below, we shall review the actual results and initial and revised forecasts by Sector and highlight the best and worst-performing companies by one-quarter revenue and margin changes. </p></div></section></section>

Source for all charts &amp; tables: Japan Analytics
BRIGHTER, LATER - Forecast Aggregate Net Income for the universe of Japanese listed companies ended the quarter, higher than three months ago by ¥1.2 trillion. As a result, the market's forward multiple is unchanged at 31 times, despite a 7% rise in market capitalisation. Although this 'season' was the best in two years in terms of forecast profits, trailing earnings are still falling, by almost ¥3 trillion in the case of operating income. Much of the market optimism rests on a Japan experiencing a mild COVID winter and the impact of the incoming Biden administration's policy pronouncements on the US dollar. 
5.2% TTM OPERATING MARGINS - Aggregate Operating Income has declined by a third year-on-year on a 10% decline in revenues. The good news is that the pace of decline is slowing. Nevertheless, all of the Abe-era gains in earnings have now been unwound.
4.8% FORECAST OPERATING MARGINS - Operating margins are forecast to contract further over the next five months to 4.8%. Forecast revenues and operating income are both 3% lower than three months ago, the slowest rate of attrition in three quarters. The current market euphoria, which has taken total capitalisation to within 3% of the pre-COVID high is implying that the next 'print' of this data series, will be positive.    POSITIVE MOMENTUM - The sharp recovery in earnings momentum, which the market has been discounting is now materialising. Our Forecast/Revision Score has returned to March levels while the trailing Results Score has bottomed out well above the low of 2009. 
In the DETAIL section below, we shall review the actual results and initial and revised forecasts by Sector and highlight the best and worst-performing companies by one-quarter revenue and margin changes. 

🇯🇵 JAPAN • IT’S A WRAP - Autumn 2020 Results & Revisions Review

Japan

Mitsui Fudosan Co., Ltd. provides overall real estate services such as leasing, subdivision, construction, sales, and maintenance of office buildings and residential houses.  The Company also manufactures building materials, operates commercial facilities including hotels and golf places, and provides financial services such as securitization of real estate properties.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Mitsui Fudosan (8801 JP)

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Campbell Gunn

🇯🇵 JAPAN • IT’S A WRAP - Autumn 2020 Results & Revisions Review

BRIGHTER, LATER - Forecast Aggregate Net Income for the universe of Japanese listed companies ended the quarter, higher than three months ago by...

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