'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/163/118/original/2020-10-03_15-34-01.png?1601706874" class="editor-image img-responsive" data-smartkarma-image-id="163118"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div>
<p><strong>WARMING UP</strong> - Earnings momentum is finally on the 'up'. Our Interim Forecast/Revision Score data series which runs from March to September finished 2020 on a two-month high, while both the Annual series are above their September low points. The divergence between domestic non-manufacturing and globally-orientated manufacturing companies continues to widen exemplified by <a href="https://www.smartkarma.com/entities/honda-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:154:1" rel="noopener">Honda Motor (7267 JP)</a>'s announcement of their decision to pull out of Formula 1 from the end of the 2021 season. Although trailing earnings have also stabilised, operating and net income forecasts and their 'gap to trailing' continue to increase. The forward multiple is 32.5 times. </p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/163/261/original/2020-10-04_07-12-52.png?1601763187" class="editor-image img-responsive" data-smartkarma-image-id="163261"></figure><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p>
</div><div><p>Our best and worst pair is home centre <a href="https://www.smartkarma.com/entities/shimachu-co-ltd" target="_blank" data-smartkarma-citation="entities:5235:1" rel="noopener">Shimachu (8184 JP)</a> for whom a rumoured bid from peer DCM has emerged and diaper machinery maker and small-cap value investor favourite and Unicharm proxy<a href="https://www.smartkarma.com/entities/zuiko-corp" target="_blank" data-smartkarma-citation="entities:5568:1" rel="noopener"> Zuiko (6279 JP)</a>. </p></div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/163/135/original/2020-10-03_17-07-27.png?1601712488" class="editor-image img-responsive" data-smartkarma-image-id="163135"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/163/136/original/2020-10-03_17-08-41.png?1601712545" class="editor-image img-responsive" data-smartkarma-image-id="163136"></figure><hr><div><p style="text-align: center;"><strong>DAILY STATS</strong></p></div><hr><div><p style="text-align: center;"><strong>18 Quarterly Results</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Results Score:</strong> 56% Positive / 11% Neutral / 33% Negative</p></li>
<li><p><strong>Average Results Score Change:</strong> 0.0 points</p></li>
<li><p><strong>Average % Change in Revenue:</strong> -9.6% Quarter YoY / -5.2% Rolling TTM YoY </p></li>
<li><p><strong>Average Operating Profit Margin Change:</strong> -2.6ppt</p></li>
<li><p><strong>Percentage Making Quarterly Losses:</strong> 33%</p></li>
</ul></div><hr><div><p style="text-align: center;"><strong>9 Annual • 6 Interim Forecasts/Revisions</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Annual Forecast/Revision Score:</strong> 33% Positive /22% Neutral / 44% Negative</p></li>
<li><p><strong>Interim Forecast/Revision Score Change:</strong> 50% Positive / 17% Neutral / 33% Negative</p></li>
<li><p><strong>Average Forecast/Revision Score Change:</strong> -2.1 points</p></li>
</ul></div>


Source for all charts &amp; tables: Japan Analytics
WARMING UP - Earnings momentum is finally on the 'up'. Our Interim Forecast/Revision Score data series which runs from March to September finished 2020 on a two-month high, while both the Annual series are above their September low points. The divergence between domestic non-manufacturing and globally-orientated manufacturing companies continues to widen exemplified by Honda Motor (7267 JP)'s announcement of their decision to pull out of Formula 1 from the end of the 2021 season. Although trailing earnings have also stabilised, operating and net income forecasts and their 'gap to trailing' continue to increase. The forward multiple is 32.5 times. 
• BEST &amp; WORST •
Our best and worst pair is home centre Shimachu (8184 JP) for whom a rumoured bid from peer DCM has emerged and diaper machinery maker and small-cap value investor favourite and Unicharm proxy Zuiko (6279 JP). DAILY STATS18 Quarterly Results
Results Score: 56% Positive / 11% Neutral / 33% Negative
Average Results Score Change: 0.0 points
Average % Change in Revenue: -9.6% Quarter YoY / -5.2% Rolling TTM YoY 
Average Operating Profit Margin Change: -2.6ppt
Percentage Making Quarterly Losses: 33%
9 Annual • 6 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 33% Positive /22% Neutral / 44% Negative
Interim Forecast/Revision Score Change: 50% Positive / 17% Neutral / 33% Negative
Average Forecast/Revision Score Change: -2.1 points


🇯🇵 JAPAN • Results & Revisions 10/​​​​​02 DCM (Under)Bids for Shimachu, Zuiko>Unicharm, Ktk>Canon

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


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

Results Score: 7 Positive / 0 Neutral / 24 Negative

Average Results Score Change: -4.9

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

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

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

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

Average Forecast/Revision Score Change: -4.5


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

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

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

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

<ul>
<li>Growth in the Japanese home interiors and furniture markets is set to continue long-term. </li>
<li>At present, just a handful of brands have any major presence led by <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a> which continues to expand market share.</li>
<li>With multiple formats, Nitori looks set to continue to dominate but faces competition from unlikely quarters, especially <a href="https://www.smartkarma.com/entities/yamada-denki-co-ltd" target="_blank" data-smartkarma-citation="entities:641:1" rel="noopener">Yamada Denki (9831 JP).</a>
</li>
</ul>


Growth in the Japanese home interiors and furniture markets is set to continue long-term. 
At present, just a handful of brands have any major presence led by Nitori Holdings (9843 JP) which continues to expand market share.
With multiple formats, Nitori looks set to continue to dominate but faces competition from unlikely quarters, especially Yamada Denki (9831 JP).



Interiors Long-Term Growth in Japan a Plus for Nitori

<ul>
<li>Nitori dominates in home decor and furniture but now wants to become a top 10 fashion retailer through its N+ chain targeting older women. </li>
<li>It will raise the rate of new stores to 30 a year and then to up to 100 a year as it reaches scale. </li>
<li>Will it be the Uniqlo for the middle-aged? If so it could own a chunk of a segment worth an estimated ¥2.5 trillion.</li>
</ul>


Nitori dominates in home decor and furniture but now wants to become a top 10 fashion retailer through its N+ chain targeting older women. 
It will raise the rate of new stores to 30 a year and then to up to 100 a year as it reaches scale. 
Will it be the Uniqlo for the middle-aged? If so it could own a chunk of a segment worth an estimated ¥2.5 trillion.


Nitori to Ramp up N+ Clothing Chain – ¥500 Billion in New Sales?

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Yesterday after the close, 500+ store home centre operator <a href="https://www.smartkarma.com/entities/kohnan-shoji-co-ltd" target="_blank" data-smartkarma-citation="entities:5662:1" rel="noopener">Kohnan Shoji (7516 JP)</a> announced full-year earnings (revs -0.2%, OP -16.6%, NP -16.4%yoy) and a buyback. </li>
<li>The buyback is for up to 1.2mm shares and up to ¥4bn to spend from here to end Sep 2022.</li>
<li>The shareholder register is interesting, diverse, and makes one wonder whether the buyback is to soften the blow of lower income, defence against an activist, or something else.</li>
</ul>


Yesterday after the close, 500+ store home centre operator Kohnan Shoji (7516 JP) announced full-year earnings (revs -0.2%, OP -16.6%, NP -16.4%yoy) and a buyback. 
The buyback is for up to 1.2mm shares and up to ¥4bn to spend from here to end Sep 2022.
The shareholder register is interesting, diverse, and makes one wonder whether the buyback is to soften the blow of lower income, defence against an activist, or something else.


Kohnan Shoji (7516) Buyback - Shareholder Return? Activist Defense? Future MBO? All of the Above?

Japan

SHIMACHU CO., LTD. operates a furniture store chain and a home center chain based in Saitama Prefecture and the Tokyo metropolitan area.  The Company sells assembly required or Do-It-Yourself goods, household utensils, gardening tools, sporting goods, and leisure items.

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

Shimachu Co Ltd (8184 JP)

🇯🇵 JAPAN • Results & Revisions 10/02 DCM (Under)Bids for Shimachu, Zuiko>Unicharm, Ktk>Canon

• BEST & WORST • The release of earnings announcements, forecasts and revisions was unaffected, and our best and worst pair is medical wear...

Campbell Gunn

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

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

Campbell Gunn

Interiors Long-Term Growth in Japan a Plus for Nitori

Japan's interiors consumption has been one of the few categories to grow consistently and will continue to grow steadily as Japanese appetite for...

Michael Causton

Nitori to Ramp up N+ Clothing Chain – ¥500 Billion in New Sales?

Nitori has been underestimated before and now apparel retailers believe Nitori doesn't have the experience to take them on. They are wrong. It...

Michael Causton

Kohnan Shoji (7516) Buyback - Shareholder Return? Activist Defense? Future MBO? All of the Above?

A Kohnan Shoji (7516) buyback announcement allows for decent market impact, on top of relatively cheap look-through PE-style valuation and activist...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

🇯🇵 JAPAN • Results & Revisions 10/​​​​​02 DCM (Under)Bids for Shimachu, Zuiko>Unicharm, Ktk>Canon

• BEST & WORST • The release of earnings announcements, forecasts and revisions was unaffected, and our best and worst pair is medical wear...

Campbell Gunn

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

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

Campbell Gunn

Interiors Long-Term Growth in Japan a Plus for Nitori

Japan's interiors consumption has been one of the few categories to grow consistently and will continue to grow steadily as Japanese appetite for...

Michael Causton

Nitori to Ramp up N+ Clothing Chain – ¥500 Billion in New Sales?

Nitori has been underestimated before and now apparel retailers believe Nitori doesn't have the experience to take them on. They are wrong. It...

Michael Causton

Kohnan Shoji (7516) Buyback - Shareholder Return? Activist Defense? Future MBO? All of the Above?

A Kohnan Shoji (7516) buyback announcement allows for decent market impact, on top of relatively cheap look-through PE-style valuation and activist...

Travis Lundy

🇯🇵 JAPAN • Results & Revisions 10/02 DCM (Under)Bids for Shimachu, Zuiko>Unicharm, Ktk>Canon