'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)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/139/255/original/2020-06-11_08-36-54.png?1591832240" class="editor-image img-responsive" data-smartkarma-image-id="139255"></figure><div class="content-caption">Source: Japan Analytics</div>STRESS TESTS - This Insight is the first in a series that will use a variety of standard and less-frequently used 'stress-tests' to look through the current euphoria and assess where business risk is concentrated among larger Japanese companies. According to Tokyo Shoko Research, 171 listed Japanese firms have raised nearly ¥10 trillion in new funds to weather COVID-19.ALTMAN Z-SCORES - The first Insight will update our earlier Who's<a href="https://www.smartkarma.com/insights/japan-who-s-swimming-naked-part-2-altman-z-score" target="_blank" data-smartkarma-citation="insights:37316" rel="noopener"> Swimming Naked?</a> Insight and focus on the Altman Z-Score as updated for the most recent quarterly results for both manufacturing and non-manufacturing companies.  In each category, ee will look at both the companies that are below Altman's 'distress' levels and those companies that have the most significant negative deviation from their seven-year average score. Only six of the bottom-thirty manufacturing and five of the bottom-thirty manufacturing companies have outperformed over one year. Many are already Oversold and offer potential value opportunities -as with <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan Motor (7201 JP)</a> which is now as distressed as when Carlos Ghosn first arrived.  QUASI-FINANCIAL FIRMS - The Z-Score methodology does not work for financial firms. Accordingly, five non-financial companies which have significant financial subsidiaries -  <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a>, <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a>, <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post (6178 JP)</a>, <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony (6758 JP)</a>- have been excluded from this analysis.

Source: Japan AnalyticsSTRESS TESTS - This Insight is the first in a series that will use a variety of standard and less-frequently used 'stress-tests' to look through the current euphoria and assess where business risk is concentrated among larger Japanese companies. According to Tokyo Shoko Research, 171 listed Japanese firms have raised nearly ¥10 trillion in new funds to weather COVID-19.ALTMAN Z-SCORES - The first Insight will update our earlier Who's Swimming Naked? Insight and focus on the Altman Z-Score as updated for the most recent quarterly results for both manufacturing and non-manufacturing companies.  In each category, ee will look at both the companies that are below Altman's 'distress' levels and those companies that have the most significant negative deviation from their seven-year average score. Only six of the bottom-thirty manufacturing and five of the bottom-thirty manufacturing companies have outperformed over one year. Many are already Oversold and offer potential value opportunities -as with Nissan Motor (7201 JP) which is now as distressed as when Carlos Ghosn first arrived.  QUASI-FINANCIAL FIRMS - The Z-Score methodology does not work for financial firms. Accordingly, five non-financial companies which have significant financial subsidiaries -  Rakuten (4755 JP), Z Holdings (4689 JP), Japan Post (6178 JP), Softbank Group (9984 JP) and Sony (6758 JP)- have been excluded from this analysis. 

🇯🇵 JAPAN - Stress Tests Part 1 - Altman Z-Scores

Telco/Internet specialist

Kirk Boodry

Redex Research

KDDI's discount brand UQ Mobile has increased the amount of data in its mid-range smartphone plans from 9GB to 10GB, whilst it will also increase speeds for data use out of the bundle. With Rakuten's mobile launch in April, we expected that tactical price changes would increase and this is indicative of that trend.  KDDI was the only incumbent mobile operator with service revenue growth in Q4 (+4% v erosion for DoCoMo and Softbank)  so it has room to maneuver, especially at the UQ Mobile subsidiary (+43% YoY growth). For newcomer Rakuten, competition from the discount brands makes its off-network offer look relatively expensive in a market that it hoped to impress on price.

KDDI's discount brand UQ Mobile has increased the amount of data in its mid-range smartphone plans from 9GB to 10GB, whilst it will also increase speeds for data use out of the bundle. With Rakuten's mobile launch in April, we expected that tactical price changes would increase and this is indicative of that trend.  KDDI was the only incumbent mobile operator with service revenue growth in Q4 (+4% v erosion for DoCoMo and Softbank)  so it has room to maneuver, especially at the UQ Mobile subsidiary (+43% YoY growth). For newcomer Rakuten, competition from the discount brands makes its off-network offer look relatively expensive in a market that it hoped to impress on price.

Japan Mobile: KDDI's Modest Data Bundle Boost Highlights Challenges to Rakuten

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

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

The Asia Short Interest weekly that looks at moves in market wide short interest and highlights moves in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:26:1">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" rel="noopener" data-smartkarma-citation="entities:28434:1">Alibaba Group (9988 HK)</a> and <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" rel="noopener" data-smartkarma-citation="entities:516:1">HSBC Holdings (5 HK)</a> while there was big short covering on <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:12880:1">Ping An Insurance (H) (2318 HK)</a> and <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:24409:1">Xiaomi Corp (1810 HK)</a>. Shorts rose substantially on Consumer Discretionary Names.Japan too saw a big increase in shorts on Consumer Discretionary names led by <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:13517:1">Oriental Land (4661 JP)</a>, <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:751:1">Fast Retailing (9983 JP)</a> and <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" rel="noopener" data-smartkarma-citation="entities:31:1">Rakuten Inc (4755 JP)</a>.Shorts in Korea dropped (the short sell ban helps!) led by Pharma and Technology Hardware stocks.Shorts rose in Taiwan led by Semiconductors, Materials, Consumer Durables and Banks.

The Asia Short Interest weekly that looks at moves in market wide short interest and highlights moves in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Tencent Holdings (700 HK), Alibaba Group (9988 HK) and HSBC Holdings (5 HK) while there was big short covering on Ping An Insurance (H) (2318 HK) and Xiaomi Corp (1810 HK). Shorts rose substantially on Consumer Discretionary Names.Japan too saw a big increase in shorts on Consumer Discretionary names led by Oriental Land (4661 JP), Fast Retailing (9983 JP) and Rakuten Inc (4755 JP).Shorts in Korea dropped (the short sell ban helps!) led by Pharma and Technology Hardware stocks.Shorts rose in Taiwan led by Semiconductors, Materials, Consumer Durables and Banks.

Asia Short Interest Weekly - Consumer Discretionary Shorts Increase in HK & Japan

Alpha-Centric ESG Research

Kyle Rudden

Pre-IPO, sort of.The U.S.-listed ADRs (American Depositary Receipts) have traded, as <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com (JD US)</a>, for six years. However, in light of the upcoming initial Hong Kong listing of JD.com and the potential IPO of JD Logistics later this year, I figured that it is about time for a comprehensive ESG assessment.I struggled with this one. Having followed JD.com for a long time, I knew that it is a complex story, but I also felt that I knew the company's major strengths and weaknesses, its highly-sensitive ESG sticking points, and even what the ultimate outcome of this ESG analysis would be.Not even close.There were surprises around every corner, some good some bad, that kept me in suspense until the end. Ultimately, it all came together into a coherent ESG thesis which – despite serious blemishes and major early missteps – is positive and, perhaps more importantly, is constantly improving.Although that improving ESG profile might at first seem like a story of redemption, I do not see it that way. JD.com's ESG story is quite complex. Its trend isn't about recent ESG positives making up for past negatives. It's a strange roller coaster ride of paradoxical ESG ups and downs, trending up.JD.com has always been socially conscious; its corporate social responsibility (CSR) initiatives date back as far as the company itself. Yet somehow, amidst many good achievements, JD.com managed to screw something up now and again. In the past, it was two steps forward and one step back.More recently JD.com has been on a decidedly upward ESG trajectory both in terms of performance as well as investor-oriented ESG transparency and disclosure. It is clear JD.com takes sustainability seriously, and the company is showing a genuine dedication to ESG and overall CSR.Note: JD.com's coronavirus pandemic response was (and continues to be) among the best. I address that in more depth in <a href="https://www.smartkarma.com/insights/covid-19-sectors-and-stocks-through-the-esg-lens-internet-retail-jd-com" target="_blank" data-smartkarma-citation="insights:38993" rel="noopener">COVID-19: Sectors and Stocks Through the ESG Lens – Internet Retail (JD.com)</a>.

 Pre-IPO, sort of.The U.S.-listed ADRs (American Depositary Receipts) have traded, as JD.com (JD US), for six years. However, in light of the upcoming initial Hong Kong listing of JD.com and the potential IPO of JD Logistics later this year, I figured that it is about time for a comprehensive ESG assessment.I struggled with this one. Having followed JD.com for a long time, I knew that it is a complex story, but I also felt that I knew the company's major strengths and weaknesses, its highly-sensitive ESG sticking points, and even what the ultimate outcome of this ESG analysis would be.Not even close.There were surprises around every corner, some good some bad, that kept me in suspense until the end. Ultimately, it all came together into a coherent ESG thesis which – despite serious blemishes and major early missteps – is positive and, perhaps more importantly, is constantly improving.Although that improving ESG profile might at first seem like a story of redemption, I do not see it that way. JD.com's ESG story is quite complex. Its trend isn't about recent ESG positives making up for past negatives. It's a strange roller coaster ride of paradoxical ESG ups and downs, trending up.JD.com has always been socially conscious; its corporate social responsibility (CSR) initiatives date back as far as the company itself. Yet somehow, amidst many good achievements, JD.com managed to screw something up now and again. In the past, it was two steps forward and one step back.More recently JD.com has been on a decidedly upward ESG trajectory both in terms of performance as well as investor-oriented ESG transparency and disclosure. It is clear JD.com takes sustainability seriously, and the company is showing a genuine dedication to ESG and overall CSR.Note: JD.com's coronavirus pandemic response was (and continues to be) among the best. I address that in more depth in COVID-19: Sectors and Stocks Through the ESG Lens – Internet Retail (JD.com).

Pre-IPO ESG Analysis: JD.com's Developing ESG Story Is Strong Despite Early Missteps

Japan

Rakuten Group, Inc. provides Internet services. The Company offers Internet finance services which including "Rakuten Card" and "Rakuten Bank". Rakuten Group also provides digital content services including electronic book services.

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

Rakuten (4755 JP)

🇯🇵 JAPAN - Stress Tests Part 1 - Altman Z-Scores

STRESS TESTS - This Insight is the first in a series that will use a variety of standard and less-frequently used 'stress-tests' to look through...

Campbell Gunn

Japan Mobile: KDDI's Modest Data Bundle Boost Highlights Challenges to Rakuten

KDDI's discount brand UQ Mobile has increased the amount of data in its mid-range smartphone plans from 9GB to 10GB, whilst it will also increase...

Kirk Boodry

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

Asia Short Interest Weekly - Consumer Discretionary Shorts Increase in HK & Japan

The Asia Short Interest weekly that looks at moves in market wide short interest and highlights moves in stock specific short interest across Hong...

Brian Freitas

Pre-IPO ESG Analysis: JD.com's Developing ESG Story Is Strong Despite Early Missteps

Pre-IPO, sort of.The U.S.-listed ADRs (American Depositary Receipts) have traded, as JD.com (JD US), for six years. However, in light of the...

Kyle Rudden

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)