'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 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

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/594/original/2020-07-07_06-10-50.png?1594069912" class="editor-image img-responsive" data-smartkarma-image-id="144594"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/595/original/2020-07-07_06-24-06.png?1594070670" class="editor-image img-responsive" data-smartkarma-image-id="144595"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong><a href="https://www.smartkarma.com/entities/mani-inc" target="_blank" data-smartkarma-citation="entities:6534:1" rel="noopener">Mani (7730 JP)</a> -</strong> Medical instrument maker Mani had warned at the time of their interim results of a poor second half, and their third-quarter results are duly sombre. Mani is one of Japan's more global companies, having less than a quarter of sales in the domestic market and is suffering accordingly - an operating profit of just ¥0.1 billion is implied for the fourth quarter. The company has done well to improve margins despite a 19% decline in revenues over the last six quarters, primarily through lowering the costs of goods sold. The shares have remained stubbornly Overbought. The current valuation suggests limited upside, a<span>bsent a sharp top-line rebound, while</span><span> 'shorts' will have to contend with the 'quality-at-any-price' brigade.</span></p><p style="text-align: center;"><strong>DAILY STATS</strong></p><hr><div><p style="text-align: center;"><strong>15 Quarterly Results</strong></p></div><div><ul>
<li>
<strong>Results Score:</strong> 7 Positive / 2 Neutral / 6 Negative</li>
<li>
<strong>Average Results Score Change:</strong>-2.6</li>
<li>
<strong>Average % Change in Revenue:</strong> -3.8% Quarter YoY* / -1.0% Rolling TTM YoY</li>
<li>
<strong>Average Operating Profit Margin Change:</strong> -1.7ppt</li>
</ul></div><hr><div><p style="text-align: center;"><br><strong>5 Annual • 3 Interim Forecasts/Revisions</strong></p></div><div><ul>
<li>
<strong>Annual Forecast/Revision Score:</strong> 3 Positive / 0 Neutral / 1 Negative</li>
<li>
<strong>Interim Forecast/Revision Score Change:</strong> 2 Positive / 1 Neutral / 0 Negative</li>
<li>
<strong>Average Forecast/Revision Score Change:</strong> -2.6</li>
</ul></div>

Source • Japan AnalyticsMani (7730 JP) - Medical instrument maker Mani had warned at the time of their interim results of a poor second half, and their third-quarter results are duly sombre. Mani is one of Japan's more global companies, having less than a quarter of sales in the domestic market and is suffering accordingly - an operating profit of just ¥0.1 billion is implied for the fourth quarter. The company has done well to improve margins despite a 19% decline in revenues over the last six quarters, primarily through lowering the costs of goods sold. The shares have remained stubbornly Overbought. The current valuation suggests limited upside, absent a sharp top-line rebound, while 'shorts' will have to contend with the 'quality-at-any-price' brigade.DAILY STATS15 Quarterly Results

Results Score: 7 Positive / 2 Neutral / 6 Negative

Average Results Score Change:-2.6

Average % Change in Revenue: -3.8% Quarter YoY* / -1.0% Rolling TTM YoY

Average Operating Profit Margin Change: -1.7ppt
 5 Annual • 3 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 3 Positive / 0 Neutral / 1 Negative

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

Average Forecast/Revision Score Change: -2.6


🇯🇵 JAPAN • Results & Revisions 6th July - Man(I) Overboard!

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/525/original/File%202020-04-12%203%2030%2058.jpeg?1586636737" class="editor-image img-responsive" data-smartkarma-image-id="127525"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/559/original/File%202020-04-12%208%2003%2009.jpeg?1586646443" class="editor-image img-responsive" data-smartkarma-image-id="127559"></figure><div class="content-caption">Source • ourworldindata.org</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/550/original/File%202020-04-12%207%2012%2036.jpeg?1586643194" class="editor-image img-responsive" data-smartkarma-image-id="127550"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/551/original/File%202020-04-12%207%2014%2052.jpeg?1586643688" class="editor-image img-responsive" data-smartkarma-image-id="127551"></figure><div class="content-caption">Source • Financial Times</div><p style="text-align: left;"><strong>CONTAINMENT NOT CONTAGION (SO FAR)</strong> - In the last week, the number of daily new confirmed cases of COVID-19 has increased from 300-400 to 500-600 of which Tokyo represents about one third. The case count is rising in many hitherto unaffected prefectures, partly as a result of migrations out of the seven prefectures which are under the 'state of emergency' declared on 7th April and also due to the return of asymptomatic Japanese nationals based overseas. The number of active cases (currently 6,279), those in critical care (122) and deaths (114) have yet to peak, although on a per capita basis Japan is in line with its East Asian neighbours. For the Japanese social distancing 'experiment' to be deemed successful, the 7-day rolling peak number of new cases needs to be below 1,000.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/573/original/IMG_1249.jpg?1586663212" class="editor-image img-responsive" data-smartkarma-image-id="127573"></figure><div class="content-caption">Source • NHK</div><p style="text-align: left;"><strong>NO-LOCKDOWN 'LOCKDOWN'</strong> - Japan's evolving compromise between social distancing and preserving the economy has revealed tensions between the central and local governments over the implementation of the powers that the former has ceded to the latter. Governor Koike had pressed for a broader range of business closures but relented over beauty salons and barbershops. DIY stores, convenience stores and restaurants can also remain open provided social distancing measures are implemented. Prefectures that were not included in the initial seven have now proposed measures of their own, including compensation for businesses forced to close which the national government has, so far, ruled out. Although no curfews have been instituted a ban on selling alcohol after seven o'clock is a reasonable 'carrot-like' alternative. From the helicopter that NHK paid to survey the scene, Tokyo was all-but-deserted on Saturday night. On Sunday. The 'recommendation' to refrain from going to bars and nightclubs has been extended to cover the whole of Japan. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/575/original/lots-of-hanko.jpg?1586663417" class="editor-image img-responsive" data-smartkarma-image-id="127575"></figure><div class="content-caption">Source • Wikimedia Commons</div><p><strong>WFH</strong> - PM Abe has very forcibly called for companies to institute 'WFH' for up to 70% of clerical staff - a factor which supports our continued bullish view for the <strong>Information Technology</strong> Sector. A Tokyo Chamber Of Commerce survey suggests that less 54% of SMEs do not intend to comply. The problem of the use of personal seals or '<em>hanko</em>' for the certification of documents remains, requiring many employees to trek into the office to affix them. Perhaps this is a business opportunity for <a href="https://www.smartkarma.com/entities/sansan-inc" target="_blank" data-smartkarma-citation="entities:28112:1" rel="noopener">Sansan (4443 JP)</a>?</p><p><strong>SIDELINED</strong> - In recent weeks, Japan's COVID-19 policy response has been led more by the Cabinet Office and Economic and Fiscal Policy Minister Yasutoshi Nishimura rather than the Kato-san of the Ministry of Health, Labour and Welfare. Kato-san and his bureaucrats have fallen out of favour for their handling of the Diamond Princess, inflexibility over testing and the rules requiring all positive cases to be hospitalised and the approval process of <a href="https://www.smartkarma.com/entities/fujifilm-holdings-corp" target="_blank" data-smartkarma-citation="entities:16353:1" rel="noopener">Fujifilm (4901 JP)</a>'s drug Avigan for use in COVID-19 cases. For better or worse, Japan's response to COVID-19 is being driven by broader considerations than the longevity of its elderly citizens.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/571/original/2020-04-12_12-13-13.png?1586661205" class="editor-image img-responsive" data-smartkarma-image-id="127571"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/572/original/2020-04-12_12-12-59.png?1586661219" class="editor-image img-responsive" data-smartkarma-image-id="127572"></figure><div class="content-caption">Source • EpiCentro/Istituto Superiore di Sanità </div><p><strong>HARD CHOICES</strong> - It is highly unlikely that Japan's first 'wave' of COVID-19 infections will peak conveniently to coincide with the Golden Week holiday period. However, as is becoming evident in New York City, the impact of 'total lockdowns' has been overestimated relative to social distancing Temporary overflow hospitals are empty, and in some US states have been closed or handed back to the military. <a href="https://www.epicentro.iss.it/en/coronavirus/bollettino/Report-COVID-2019_2_april_2020.pdf" target="_blank" rel="noopener">Evidence</a> from Italy's EpiCentro/Istituto Superiore di Sanità shows that the vast majority of fatalities are found in those over 60 years of age who have one or more comorbidity. These findings are also valid for Japan and other developed countries. As the economic cost of the moral imperative behind lockdowns becomes clear, the pressure to restart will increase, and the protocols for reaching herd immunity will be debated. The likelihood of second and third 'waves' before the widespread availability of mass-testing or vaccinees may require semi-permanent social-distancing for the most vulnerable and prolonged shutdowns of the crowded, noisy indoor venues that attract the most foolhardy. By anticipating the post-COVID protocols, The approach adopted by Taiwan, South Korea, Singapore and Japan offers a better glide-path to economic recovery. All are, however, dependent on the major Western economies, currently pickled in aspic, finding their exit strategies before summer.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/661/original/File%202020-04-13%205%2057%2023.jpeg?1586725178" class="editor-image img-responsive" data-smartkarma-image-id="127661"></figure><div class="content-caption">Source • gotazual@nyit.edu</div><p><strong>PRO-VAX</strong> - Another factor in Japan's favour is the country's early adoption, in 1947, of a universal childhood BCG vaccination programme. A recent <a href="https://www.medrxiv.org/content/10.1101/2020.03.24.20042937v1" target="_blank" rel="noopener">study</a> has found that "<em>countries without universal policies of BCG vaccination (Italy, Netherlands, Belgium United States) have been more severely affected compared to countries with universal and long-standing BCG policies. Countries that have a late start of universal BCG policy (Iran, 1984) had high mortality, consistent with the idea that BCG protects the vaccinated elderly population. We also found that BCG vaccination also reduced the number of reported COVID-19 cases in a country. The combination of reduced morbidity and mortality makes BCG vaccination a potential new tool in the fight against COVID-19.</em>" Ironically for President Bolsonaro, Brazil's programme started in 1920 and currently has an even lower mortality rate than Japan.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/583/original/File%202020-04-12%2014%2045%2024.jpeg?1586670339" class="editor-image img-responsive" data-smartkarma-image-id="127583"></figure><div class="content-caption">Source • oec.world</div><p><strong>CHINA PASSING -</strong> Of longer-term significance, Japan's COVID-19 stimulus package includes U¥220 billion to support Japanese companies moving production facilities out of China. Imports from China have fallen by more than 50% year-on-year and many Japanese manufacturers have been starved of critical components. While high-value-added parts will be shifted home, others could be sourced from SouthEast Asian countries.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/586/original/File%202020-04-12%2015%2002%2044.jpeg?1586671392" class="editor-image img-responsive" data-smartkarma-image-id="127586"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/587/original/File%202020-04-12%2015%2006%2029.jpeg?1586671741" class="editor-image img-responsive" data-smartkarma-image-id="127587"></figure><div class="content-caption">Source • McKinsey</div><p><strong>FOOD SECURITY</strong> - Meanwhile, several countries, including India, Russia, Kazakhstan, Ukraine, Vietnam, and Romania, are restricting exports of foodstuffs. Fortunately for Japan, much of the nations food imports come from the United States, Australia and Canada. Nevertheless, we expect a repeat of the 2008 food price inflation before the summer and suggest 'treading carefully; in the currently buoyant <strong>Food Beverage &amp; Tobacco</strong> Sector.</p><div>
<p><strong>SELECTIVELY BULLISH</strong> - While Japan's globally-orientated companies will struggle with almost no demand from the lockdown economies, specific domestic Sectors and Peer Groups, such as <strong>Information Technology </strong>and<strong> Internet Content &amp; Services</strong> are thriving in the COVID economy. Overall, by resisting a total lockdown, Japan remains relatively well-placed for 'the other side'. </p>
<p>In the <strong>DETAIL</strong> section below, we shall provide an update on the market overall, look at Sector and Peer Group performance and review the results and revision announcements made on Friday.</p>
<blockquote><p style="text-align: center;"><strong>It is not given to human beings - happily for them, for otherwise life would be intolerable - to foresee or to predict to any large extent the unfolding course of events." - Winston Churchill</strong></p></blockquote>
</div>

Source • ourworldindata.orgSource • Financial TimesCONTAINMENT NOT CONTAGION (SO FAR) - In the last week, the number of daily new confirmed cases of COVID-19 has increased from 300-400 to 500-600 of which Tokyo represents about one third. The case count is rising in many hitherto unaffected prefectures, partly as a result of migrations out of the seven prefectures which are under the 'state of emergency' declared on 7th April and also due to the return of asymptomatic Japanese nationals based overseas. The number of active cases (currently 6,279), those in critical care (122) and deaths (114) have yet to peak, although on a per capita basis Japan is in line with its East Asian neighbours. For the Japanese social distancing 'experiment' to be deemed successful, the 7-day rolling peak number of new cases needs to be below 1,000.Source • NHKNO-LOCKDOWN 'LOCKDOWN' - Japan's evolving compromise between social distancing and preserving the economy has revealed tensions between the central and local governments over the implementation of the powers that the former has ceded to the latter. Governor Koike had pressed for a broader range of business closures but relented over beauty salons and barbershops. DIY stores, convenience stores and restaurants can also remain open provided social distancing measures are implemented. Prefectures that were not included in the initial seven have now proposed measures of their own, including compensation for businesses forced to close which the national government has, so far, ruled out. Although no curfews have been instituted a ban on selling alcohol after seven o'clock is a reasonable 'carrot-like' alternative. From the helicopter that NHK paid to survey the scene, Tokyo was all-but-deserted on Saturday night. On Sunday. The 'recommendation' to refrain from going to bars and nightclubs has been extended to cover the whole of Japan. Source • Wikimedia CommonsWFH - PM Abe has very forcibly called for companies to institute 'WFH' for up to 70% of clerical staff - a factor which supports our continued bullish view for the Information Technology Sector. A Tokyo Chamber Of Commerce survey suggests that less 54% of SMEs do not intend to comply. The problem of the use of personal seals or 'hanko' for the certification of documents remains, requiring many employees to trek into the office to affix them. Perhaps this is a business opportunity for Sansan (4443 JP)?SIDELINED - In recent weeks, Japan's COVID-19 policy response has been led more by the Cabinet Office and Economic and Fiscal Policy Minister Yasutoshi Nishimura rather than the Kato-san of the Ministry of Health, Labour and Welfare. Kato-san and his bureaucrats have fallen out of favour for their handling of the Diamond Princess, inflexibility over testing and the rules requiring all positive cases to be hospitalised and the approval process of Fujifilm (4901 JP)'s drug Avigan for use in COVID-19 cases. For better or worse, Japan's response to COVID-19 is being driven by broader considerations than the longevity of its elderly citizens.Source • EpiCentro/Istituto Superiore di Sanità HARD CHOICES - It is highly unlikely that Japan's first 'wave' of COVID-19 infections will peak conveniently to coincide with the Golden Week holiday period. However, as is becoming evident in New York City, the impact of 'total lockdowns' has been overestimated relative to social distancing Temporary overflow hospitals are empty, and in some US states have been closed or handed back to the military. Evidence from Italy's EpiCentro/Istituto Superiore di Sanità shows that the vast majority of fatalities are found in those over 60 years of age who have one or more comorbidity. These findings are also valid for Japan and other developed countries. As the economic cost of the moral imperative behind lockdowns becomes clear, the pressure to restart will increase, and the protocols for reaching herd immunity will be debated. The likelihood of second and third 'waves' before the widespread availability of mass-testing or vaccinees may require semi-permanent social-distancing for the most vulnerable and prolonged shutdowns of the crowded, noisy indoor venues that attract the most foolhardy. By anticipating the post-COVID protocols, The approach adopted by Taiwan, South Korea, Singapore and Japan offers a better glide-path to economic recovery. All are, however, dependent on the major Western economies, currently pickled in aspic, finding their exit strategies before summer.Source • gotazual@nyit.eduPRO-VAX - Another factor in Japan's favour is the country's early adoption, in 1947, of a universal childhood BCG vaccination programme. A recent study has found that "countries without universal policies of BCG vaccination (Italy, Netherlands, Belgium United States) have been more severely affected compared to countries with universal and long-standing BCG policies. Countries that have a late start of universal BCG policy (Iran, 1984) had high mortality, consistent with the idea that BCG protects the vaccinated elderly population. We also found that BCG vaccination also reduced the number of reported COVID-19 cases in a country. The combination of reduced morbidity and mortality makes BCG vaccination a potential new tool in the fight against COVID-19." Ironically for President Bolsonaro, Brazil's programme started in 1920 and currently has an even lower mortality rate than Japan.Source • oec.worldCHINA PASSING - Of longer-term significance, Japan's COVID-19 stimulus package includes U¥220 billion to support Japanese companies moving production facilities out of China. Imports from China have fallen by more than 50% year-on-year and many Japanese manufacturers have been starved of critical components. While high-value-added parts will be shifted home, others could be sourced from SouthEast Asian countries.Source • McKinseyFOOD SECURITY - Meanwhile, several countries, including India, Russia, Kazakhstan, Ukraine, Vietnam, and Romania, are restricting exports of foodstuffs. Fortunately for Japan, much of the nations food imports come from the United States, Australia and Canada. Nevertheless, we expect a repeat of the 2008 food price inflation before the summer and suggest 'treading carefully; in the currently buoyant Food Beverage &amp; Tobacco Sector.
SELECTIVELY BULLISH - While Japan's globally-orientated companies will struggle with almost no demand from the lockdown economies, specific domestic Sectors and Peer Groups, such as Information Technology and Internet Content &amp; Services are thriving in the COVID economy. Overall, by resisting a total lockdown, Japan remains relatively well-placed for 'the other side'. 
In the DETAIL section below, we shall provide an update on the market overall, look at Sector and Peer Group performance and review the results and revision announcements made on Friday.
It is not given to human beings - happily for them, for otherwise life would be intolerable - to foresee or to predict to any large extent the unfolding course of events." - Winston Churchill


🇯🇵 JAPAN MARKET (& COVID-19) UPDATE - 12th April • To Each Their Own

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

<p>Below is the list of Japan/Korea-related posts put on the Smartkarma platform during the week of 03<sup>rd</sup> June 2019.</p>
<table class="table table-striped">
<tbody>
<tr>
<td>
<h2>Insight</h2>
</td>
<td>
<h2>Insight Provider</h2>
</td>
<td>
<h2>Published</h2>
</td>
</tr>
<tr>
<td>
<h2>Japan</h2>
</td>
<td> </td>
<td> </td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/jpy-macro-support-break-will-add-to-global-risk-pressures" target="_blank">JPY Macro Support Break Will Add to Global Risk Pressures</a></td>
<td><a href="https://www.smartkarma.com/profiles/thomas-schroeder" target="_blank">Thomas Schroeder</a></td>
<td>03/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/nexon-sale-main-bidding-round-summary" target="_blank">Nexon Sale: Main Bidding Round Summary</a></td>
<td><a href="https://www.smartkarma.com/profiles/sanghyun-park" target="_blank">Sanghyun Park</a></td>
<td>03/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/cocokara-fine-cocokara" target="_blank">Cocokara Fine は Cocokara いいね*</a></td>
<td><a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank">Travis Lundy</a></td>
<td>04/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/japan-5g-government-will-promote-use-of-public-infrastructure-to-speed-deployment" target="_blank">Japan 5G: Government Will Promote Use of Public Infrastructure to Speed Deployment</a></td>
<td><a href="https://www.smartkarma.com/profiles/kirk-boodry" target="_blank">Kirk Boodry</a></td>
<td>04/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/seven-i-holdings-better-late-than-never" target="_blank">Seven &amp; I Holdings: Better Late than Never</a></td>
<td><a href="https://www.smartkarma.com/profiles/oshadhi-kumarasiri" target="_blank">Oshadhi Kumarasiri</a></td>
<td>05/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/int-l-human-resources-employment-services-stocks-are-bottoming-add-exposure" target="_blank">Int’l Human Resources &amp; Employment Services Stocks Are Bottoming -- Add Exposure</a></td>
<td><a href="https://www.smartkarma.com/profiles/joe-jasper" target="_blank">Joe Jasper</a></td>
<td>05/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/softbank-group-upcoming-us-doj-ruling-on-sprint-merger-is-a-13bn-question-for-shareholders" target="_blank">Softbank Group: Upcoming US DoJ Ruling on Sprint Merger Is a $13bn Question for Shareholders</a></td>
<td><a href="https://www.smartkarma.com/profiles/kirk-boodry" target="_blank">Kirk Boodry</a></td>
<td>05/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/sony-plans-salary-hikes-in-order-to-attract-tech-talent-for-ai" target="_blank">Sony Plans Salary Hikes in Order to Attract Tech Talent for AI</a></td>
<td><a href="https://www.smartkarma.com/profiles/farha-sabri" target="_blank">Farha Sabri</a></td>
<td>05/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/chiyoda-mozambique-order-win-follows-first-lng-shipment-at-cameron" target="_blank">Chiyoda: Mozambique Order Win Follows First LNG Shipment at Cameron</a></td>
<td><a href="https://www.smartkarma.com/profiles/mio-kato-cfa" target="_blank">Mio Kato, CFA</a></td>
<td>05/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/tokyo-base-on-track-again" target="_blank">Tokyo Base on Track Again?</a></td>
<td><a href="https://www.smartkarma.com/profiles/michael-causton" target="_blank">Michael Causton</a></td>
<td>06/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/sansan-ipo-business-cards-to-build-connections-we-see-good-potential" target="_blank">Sansan IPO: Business Cards to Build Connections; We See Good Potential</a></td>
<td><a href="https://www.smartkarma.com/profiles/shifara-samsudeen-acma-cgma" target="_blank">Shifara Samsudeen, ACMA, CGMA</a></td>
<td>06/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/nissan-fca-pulls-out-as-nissan-demurs-and-renault-vacillates" target="_blank">Nissan: FCA Pulls Out as Nissan Demurs and Renault Vacillates</a></td>
<td><a href="https://www.smartkarma.com/profiles/mio-kato-cfa" target="_blank">Mio Kato, CFA</a></td>
<td>06/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/subaru-joint-bev-development-with-toyota-matters-toyota-s-case-strategy-becoming-clearer" target="_blank">Subaru: Joint BEV Development with Toyota Matters; Toyota's CASE Strategy Becoming Clearer</a></td>
<td><a href="https://www.smartkarma.com/profiles/mio-kato-cfa" target="_blank">Mio Kato, CFA</a></td>
<td>06/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/hitachi-s-hidden-gem-out-of-the-bag" target="_blank">Hitachi’s Hidden Gem Out Of The Bag</a></td>
<td><a href="https://www.smartkarma.com/profiles/david-rubenstein" target="_blank">David Rubenstein</a></td>
<td>06/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/japan-consumption-trends-lots-of-savings-for-good-brands-and-retailers-to-tap-into" target="_blank">Japan Consumption Trends: Lots of Savings for Good Brands and Retailers to Tap Into</a></td>
<td><a href="https://www.smartkarma.com/profiles/michael-causton" target="_blank">Michael Causton</a></td>
<td>06/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/horiba-6856-jp-downward-revision-ahead" target="_blank">Horiba (6856 JP): Downward Revision Ahead</a></td>
<td><a href="https://www.smartkarma.com/profiles/scott-foster" target="_blank">Scott Foster</a></td>
<td>07/06/19</td>
</tr>
<tr>
<td>
<h2>Korea</h2>
</td>
<td> </td>
<td> </td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/segyung-hitech-ipo-preview-explosive-growth-in-sales-profits" target="_blank">Segyung Hitech IPO Preview - Explosive Growth in Sales &amp; Profits</a></td>
<td><a href="https://www.smartkarma.com/profiles/douglas-kim" target="_blank">Douglas Kim</a></td>
<td>04/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/samsung-electronics-share-class-trade-1p-is-overbought-relative-to-c" target="_blank">Samsung Electronics Share Class Trade: 1P Is Overbought Relative to C</a></td>
<td><a href="https://www.smartkarma.com/profiles/sanghyun-park" target="_blank">Sanghyun Park</a></td>
<td>05/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/kb-asset-management-goes-activist-on-sm-entertainment" target="_blank">KB Asset Management Goes "Activist" On SM Entertainment</a></td>
<td><a href="https://www.smartkarma.com/profiles/douglas-kim" target="_blank">Douglas Kim</a></td>
<td>06/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/korean-won-asia-s-worst-performer-in-2019" target="_blank">Korean Won - Asia's Worst Performer In 2019</a></td>
<td><a href="https://www.smartkarma.com/profiles/sharmila-whelan" target="_blank">Sharmila Whelan</a></td>
<td>06/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/korean-telcos-5g-capex-ramp-will-put-more-pressure-on-already-sub-par-returns" target="_blank">Korean Telcos: 5G Capex Ramp Will Put More Pressure on Already Sub Par Returns</a></td>
<td><a href="https://www.smartkarma.com/profiles/new-street-research-insights" target="_blank">New Street Research Insights</a></td>
<td>06/06/19</td>
</tr>
<tr>
<td><a href="https://www.smartkarma.com/insights/samsung-electronics-partners-with-amd-to-reduce-its-reliance-on-qualcomm-for-gpus" target="_blank">Samsung Electronics Partners with AMD to Reduce Its Reliance on Qualcomm for GPUs</a></td>
<td><a href="https://www.smartkarma.com/profiles/shifara-samsudeen-acma-cgma" target="_blank">Shifara Samsudeen, ACMA, CGMA</a></td>
<td>08/06/19</td>
</tr>
</tbody>
</table>

Below is the list of Japan/Korea-related posts put on the Smartkarma platform during the week of 03rd June 2019.




Insight


Insight Provider


Published




Japan

 
 


JPY Macro Support Break Will Add to Global Risk Pressures
Thomas Schroeder
03/06/19


Nexon Sale: Main Bidding Round Summary
Sanghyun Park
03/06/19


Cocokara Fine は Cocokara いいね*
Travis Lundy
04/06/19


Japan 5G: Government Will Promote Use of Public Infrastructure to Speed Deployment
Kirk Boodry
04/06/19


Seven &amp; I Holdings: Better Late than Never
Oshadhi Kumarasiri
05/06/19


Int’l Human Resources &amp; Employment Services Stocks Are Bottoming -- Add Exposure
Joe Jasper
05/06/19


Softbank Group: Upcoming US DoJ Ruling on Sprint Merger Is a $13bn Question for Shareholders
Kirk Boodry
05/06/19


Sony Plans Salary Hikes in Order to Attract Tech Talent for AI
Farha Sabri
05/06/19


Chiyoda: Mozambique Order Win Follows First LNG Shipment at Cameron
Mio Kato, CFA
05/06/19


Tokyo Base on Track Again?
Michael Causton
06/06/19


Sansan IPO: Business Cards to Build Connections; We See Good Potential
Shifara Samsudeen, ACMA, CGMA
06/06/19


Nissan: FCA Pulls Out as Nissan Demurs and Renault Vacillates
Mio Kato, CFA
06/06/19


Subaru: Joint BEV Development with Toyota Matters; Toyota's CASE Strategy Becoming Clearer
Mio Kato, CFA
06/06/19


Hitachi’s Hidden Gem Out Of The Bag
David Rubenstein
06/06/19


Japan Consumption Trends: Lots of Savings for Good Brands and Retailers to Tap Into
Michael Causton
06/06/19


Horiba (6856 JP): Downward Revision Ahead
Scott Foster
07/06/19



Korea

 
 


Segyung Hitech IPO Preview - Explosive Growth in Sales &amp; Profits
Douglas Kim
04/06/19


Samsung Electronics Share Class Trade: 1P Is Overbought Relative to C
Sanghyun Park
05/06/19


KB Asset Management Goes "Activist" On SM Entertainment
Douglas Kim
06/06/19


Korean Won - Asia's Worst Performer In 2019
Sharmila Whelan
06/06/19


Korean Telcos: 5G Capex Ramp Will Put More Pressure on Already Sub Par Returns
New Street Research Insights
06/06/19


Samsung Electronics Partners with AMD to Reduce Its Reliance on Qualcomm for GPUs
Shifara Samsudeen, ACMA, CGMA
08/06/19




Smartkarma’s Week that Was in JP/​​​​​​​​KR: Nexon, Subaru, Segyung Hitech and Samsung Electronics

Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li><span xml:lang="EN-US" data-contrast="none">San San should benefit from an end to Covid restrictions as employees start to network again, with revenue driven to some extent by the volume of business cards that are digitised</span></li>
<li><span xml:lang="EN-US" data-contrast="none">San San remains in the early stages of its growth cycle as corporate Japan embraces digital transformation</span></li>
<li><span xml:lang="EN-US" data-contrast="none">Q1 Sales growth +25% YoY, accelerated from 19% YoY the previous quarter</span></li>
<li>Bill One, a new invoicing platform, is starting to contribute</li>
<li>The stock has run up 52% YTD, one of the top performers among large cap SaaS companies in Japan </li>
<li>Trading at 18x TTM Revenue the stock is cheaper than peers</li>
</ul>


San San should benefit from an end to Covid restrictions as employees start to network again, with revenue driven to some extent by the volume of business cards that are digitised
San San remains in the early stages of its growth cycle as corporate Japan embraces digital transformation
Q1 Sales growth +25% YoY, accelerated from 19% YoY the previous quarter
Bill One, a new invoicing platform, is starting to contribute
The stock has run up 52% YTD, one of the top performers among large cap SaaS companies in Japan 
Trading at 18x TTM Revenue the stock is cheaper than peers


San San (4443) - Networking, Not Net Working

Japan

Sansan, Inc. provides mobile application software solutions. The Company offers business card management service by scanning the cards from scanner and smartphone. Sansan provides its services throughout Japan.

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

Sansan Inc (4443 JP)

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

NET GAIN - Forecast Aggregate Net Income for the universe of Japanese listed companies ended the quarter 23.8% higher than three months ago - an...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 6th July - Man(I) Overboard!

Mani (7730 JP) - Medical instrument maker Mani had warned at the time of their interim results of a poor second half, and their third-quarter...

Campbell Gunn

🇯🇵 JAPAN MARKET (& COVID-19) UPDATE - 12th April • To Each Their Own

CONTAINMENT NOT CONTAGION (SO FAR) - In the last week, the number of daily new confirmed cases of COVID-19 has increased from 300-400 to 500-600 of...

Campbell Gunn

Smartkarma’s Week that Was in JP/KR: Nexon, Subaru, Segyung Hitech and Samsung Electronics

Below is the list of Japan/Korea-related posts put on the Smartkarma platform during the week of 03rd June 2019.

Shifara Samsudeen, FCMA, CGMA

San San (4443) - Networking, Not Net Working

San San offers investors exposure to multiple growth megatrends, including Digital Transformation, SaaS market penetration, and work-style reform...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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

NET GAIN - Forecast Aggregate Net Income for the universe of Japanese listed companies ended the quarter 23.8% higher than three months ago - an...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 6th July - Man(I) Overboard!

Mani (7730 JP) - Medical instrument maker Mani had warned at the time of their interim results of a poor second half, and their third-quarter...

Campbell Gunn

🇯🇵 JAPAN MARKET (& COVID-19) UPDATE - 12th April • To Each Their Own

CONTAINMENT NOT CONTAGION (SO FAR) - In the last week, the number of daily new confirmed cases of COVID-19 has increased from 300-400 to 500-600 of...

Campbell Gunn

Smartkarma’s Week that Was in JP/​​​​​​​​KR: Nexon, Subaru, Segyung Hitech and Samsung Electronics

Below is the list of Japan/Korea-related posts put on the Smartkarma platform during the week of 03rd June 2019.

Shifara Samsudeen, FCMA, CGMA

San San (4443) - Networking, Not Net Working

San San offers investors exposure to multiple growth megatrends, including Digital Transformation, SaaS market penetration, and work-style reform...

Mark Chadwick

Smartkarma’s Week that Was in JP/KR: Nexon, Subaru, Segyung Hitech and Samsung Electronics