'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/000/136/350/original/2020-05-28_06-43-04.png?1590615802" class="editor-image img-responsive" data-smartkarma-image-id="136350"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>ALL GOOD</strong> - Japan has had a 'good' COVID-19 relative to many countries. With a little help from the Bank of Japan, Japanese equities are only 11% below the December peak, despite a ten-year low in corporate earnings and the prospect of much worse in that regard in the coming months. Companies have retained staff, and consumer confidence has fallen less than in other developed economies. Production lines were not shut down, resulting in a GFC-like spike in the inventory ratio. The stable Yen will make it harder for exporters to the developing world to clear the stockpiles. Accordingly, the alphabetic 'shape' of Japan's post-COVID recovery will between "V" and "L" and will be more prolonged.</p><p><strong>SLIM TAILS</strong> - We are now in the slim tail of the earnings 'season' with only seven larger caps reporting yesterday of which just two made forecasts for the current year.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/136/353/original/2020-05-28_07-10-35.png?1590617452" class="editor-image img-responsive" data-smartkarma-image-id="136353"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>INTERNAL DEFICIENCIES -</strong> Another 42 companies will announce results today. The largest of these by market cap will be <a href="https://www.smartkarma.com/entities/otsuka-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:12292:1" rel="noopener">Otsuka (4578 JP)</a>, <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan (7201 JP)</a> (finally), and <a href="https://www.smartkarma.com/entities/toray-industries-inc" target="_blank" data-smartkarma-citation="entities:625:1" rel="noopener">Toray (3402 JP)</a>.  Of the companies with a market capitalisation of over ¥1 trillion, only <a href="https://www.smartkarma.com/entities/olympus-corp" target="_blank" data-smartkarma-citation="entities:356:1" rel="noopener">Olympus (7733 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba (6502 JP)</a>, and <a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" data-smartkarma-citation="entities:7797:1" rel="noopener">Hitachi (6501 JP)</a> remain after which this series of Insights will be brought to close. That these three companies required an extra month to prepare their accounts suggests severe deficiencies in the internal reporting structures of these companies.</p>

Source • Japan AnalyticsALL GOOD - Japan has had a 'good' COVID-19 relative to many countries. With a little help from the Bank of Japan, Japanese equities are only 11% below the December peak, despite a ten-year low in corporate earnings and the prospect of much worse in that regard in the coming months. Companies have retained staff, and consumer confidence has fallen less than in other developed economies. Production lines were not shut down, resulting in a GFC-like spike in the inventory ratio. The stable Yen will make it harder for exporters to the developing world to clear the stockpiles. Accordingly, the alphabetic 'shape' of Japan's post-COVID recovery will between "V" and "L" and will be more prolonged.SLIM TAILS - We are now in the slim tail of the earnings 'season' with only seven larger caps reporting yesterday of which just two made forecasts for the current year.Source • Japan AnalyticsINTERNAL DEFICIENCIES - Another 42 companies will announce results today. The largest of these by market cap will be Otsuka (4578 JP), Nissan (7201 JP) (finally), and Toray (3402 JP).  Of the companies with a market capitalisation of over ¥1 trillion, only Olympus (7733 JP), Toshiba (6502 JP), and Hitachi (6501 JP) remain after which this series of Insights will be brought to close. That these three companies required an extra month to prepare their accounts suggests severe deficiencies in the internal reporting structures of these companies.

🇯🇵 JAPAN • Results & Revisions 27th May - Recruit, DNP & Dentsu

<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/135/544/original/2020-05-25_05-06-24.png?1590350813" class="editor-image img-responsive" data-smartkarma-image-id="135544"></figure><div class="content-caption">Source • Japan Analytics</div>
</div><p><strong>CLOSURE</strong> - As the fashion amongst Japanese companies is not to make any full-year forecasts, there has been little change in our forecast-based metrics over the last week. Trailing-twelve-month (TTM) profits declined by ¥3 trillion and ¥2.5 trillion at the operating and net levels, respectively, over the week - closing the 'gap' to forecast considerably. There is still some upside to the market multiple from the numerator. For the time being, however, liquidity rules.</p><div><p>In the <strong>DETAIL </strong>section below, we shall review Friday's announcements:-</p></div><div><ul>
<li>The balance between positive/neutral/negative of the 106 results announcements was 52:4:50. The average change in Results Score was -1.2.</li>
<li>For the 49 revisions/initial forecasts, the split was 10:1:38, and the average Forecast/Revision Score was -10.0. Again, only one-third of companies reporting full-year results chose to make current year forecasts. </li>
<li>As this highly-unusual disclosure period slowly winds down (7% of market cap has yet to report almost two months after books closed), 57 companies will announce results on Monday. The largest of these by market cap will be <a href="https://www.smartkarma.com/entities/ajinomoto-co-inc" target="_blank" data-smartkarma-citation="entities:8911:1" rel="noopener">Ajinomoto (2802 JP)</a>, <a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" data-smartkarma-citation="entities:7797:1" rel="noopener">Hitachi (6501 JP)</a>, and <a href="https://www.smartkarma.com/entities/shimizu-corp" target="_blank" data-smartkarma-citation="entities:8530:1" rel="noopener">Shimizu (1803 JP)</a>. <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> and <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba (6502 JP)</a> will, hopefully, follow later in the week but may well be the 'sting in the trail'. </li>
</ul></div>


Source • Japan Analytics
CLOSURE - As the fashion amongst Japanese companies is not to make any full-year forecasts, there has been little change in our forecast-based metrics over the last week. Trailing-twelve-month (TTM) profits declined by ¥3 trillion and ¥2.5 trillion at the operating and net levels, respectively, over the week - closing the 'gap' to forecast considerably. There is still some upside to the market multiple from the numerator. For the time being, however, liquidity rules.In the DETAIL section below, we shall review Friday's announcements:-
The balance between positive/neutral/negative of the 106 results announcements was 52:4:50. The average change in Results Score was -1.2.
For the 49 revisions/initial forecasts, the split was 10:1:38, and the average Forecast/Revision Score was -10.0. Again, only one-third of companies reporting full-year results chose to make current year forecasts. 
As this highly-unusual disclosure period slowly winds down (7% of market cap has yet to report almost two months after books closed), 57 companies will announce results on Monday. The largest of these by market cap will be Ajinomoto (2802 JP), Hitachi (6501 JP), and Shimizu (1803 JP). Nissan Motor (7201 JP) and Toshiba (6502 JP) will, hopefully, follow later in the week but may well be the 'sting in the trail'. 


🇯🇵 JAPAN • Results & Revisions 22nd May - FUJIFILM, ASICS, Benesse

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/134/507/original/2020-05-20_06-42-32.png?1589924596" class="editor-image img-responsive" data-smartkarma-image-id="134507"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>STRAGGLERS</strong> - As we wind down this series of Insights, the 'gap' between our proxies for earnings and Total Market Cap is now the largest in fifteen years, courtesy of central bank liquidity injections. Our lagging Results Score has yet to breach the 2016 'low', a creditable outcome but will do so by August. We still await annual results for 'stragglers' <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit (6098 JP)</a>, <a href="https://www.smartkarma.com/entities/tokio-marine-holdings-inc" target="_blank" data-smartkarma-citation="entities:7591:1" rel="noopener">Tokio Marine (8766 JP)</a>, <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>, <a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" data-smartkarma-citation="entities:7797:1" rel="noopener">Hitachi (6501 JP)</a>, <a href="https://www.smartkarma.com/entities/fujifilm-holdings-corp" target="_blank" data-smartkarma-citation="entities:16353:1" rel="noopener">Fujifilm (4901 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba (6502 JP)</a>, and <a href="https://www.smartkarma.com/entities/hikari-tsushin-inc" target="_blank" data-smartkarma-citation="entities:4909:1" rel="noopener">Hikari Tsushin (9435 JP)</a>. </p><div><p>in the <strong>DETAIL</strong> below, we shall review Monday's updates:-</p></div><div><ul>
<li>The balance between positive/neutral/negative of the 51 results announcements was 21:3:27. The average change in Results Score was -1.1.</li>
<li>For the 24 revisions/initial forecasts, the split was 8:1:15, and the average Forecast/Revision Score was -5.4. Again less than 50% of companies reporting full-year results chose to make current year forecasts.</li>
</ul></div>

Source • Japan AnalyticsSTRAGGLERS - As we wind down this series of Insights, the 'gap' between our proxies for earnings and Total Market Cap is now the largest in fifteen years, courtesy of central bank liquidity injections. Our lagging Results Score has yet to breach the 2016 'low', a creditable outcome but will do so by August. We still await annual results for 'stragglers' Recruit (6098 JP), Tokio Marine (8766 JP), Nissan Motor (7201 JP), Hitachi (6501 JP), Fujifilm (4901 JP), Toshiba (6502 JP), and Hikari Tsushin (9435 JP). in the DETAIL below, we shall review Monday's updates:-
The balance between positive/neutral/negative of the 51 results announcements was 21:3:27. The average change in Results Score was -1.1.
For the 24 revisions/initial forecasts, the split was 8:1:15, and the average Forecast/Revision Score was -5.4. Again less than 50% of companies reporting full-year results chose to make current year forecasts.


🇯🇵 JAPAN • Results & Revisions 19th May - SEI, Kotobuki Spirits, Autobacs Seven

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Equity Bottom-Up

<p>Western Digital announced its earnings on April 30.  In brief the company's superb strategy has moved it ahead of its competition and other similar companies, and have made it likely to continue to succeed in the future.</p>

Western Digital announced its earnings on April 30.  In brief the company's superb strategy has moved it ahead of its competition and other similar companies, and have made it likely to continue to succeed in the future.

<p>In today's earnings call SK hynix posted respectable first-quarter results with numerous warnings that the uncertainties of the coronavirus could alter their business significantly.</p><p>This Smartkarma Insights provides some of the details of the call and compares SK hynix' first quarter performance against that of their competitors.</p>

In today's earnings call SK hynix posted respectable first-quarter results with numerous warnings that the uncertainties of the coronavirus could alter their business significantly.This Smartkarma Insights provides some of the details of the call and compares SK hynix' first quarter performance against that of their competitors.

SK Hynix Earnings Call: Respectable Q1, but Unsettling Outlook

Japan

Toshiba Corporation manufactures and markets electrical and electronic products. The Company's products include digital products such as PCs and televisions, NAND flash memories, and system LSIs (large-scale integrated), as well as social infrastructures such as power generators, medical equipment, and home appliances.

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Toshiba Corp (6502 JP)

🇯🇵 JAPAN • Results & Revisions 27th May - Recruit, DNP & Dentsu

ALL GOOD - Japan has had a 'good' COVID-19 relative to many countries. With a little help from the Bank of Japan, Japanese equities are only 11%...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 22nd May - FUJIFILM, ASICS, Benesse

CLOSURE - As the fashion amongst Japanese companies is not to make any full-year forecasts, there has been little change in our forecast-based...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 19th May - SEI, Kotobuki Spirits, Autobacs Seven

STRAGGLERS - As we wind down this series of Insights, the 'gap' between our proxies for earnings and Total Market Cap is now the largest in fifteen...

Campbell Gunn

Western Digital Shines Despite Pandemic

Western Digital announced its earnings on April 30. In brief the company's superb strategy has moved it ahead of its competition and other similar...

Jim Handy

SK Hynix Earnings Call: Respectable Q1, but Unsettling Outlook

In today's earnings call SK hynix posted respectable first-quarter results with numerous warnings that the uncertainties of the coronavirus could...

Jim Handy

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