'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Thematic (Sector/Industry)

<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/083/132/original/2019-03-25_18-58-11.png?1553507902" class="editor-image img-responsive" data-smartkarma-image-id="83132"></figure>Source: Japan Analytics
</div>There are currently 241 listed Japanese companies that can be categorised as Internet businesses. Our classification overlaps with the TOPIX-33 Information &amp; Communication sub-Sector but is broader in that it encompasses all companies listed on all sections and exchanges but is also narrower in that we have excluded Telecommunications (including <a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">S</a><a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">oftbank Group (9984 JP)</a>) and Information Technology companies. We have adopted a 'quantamental' approach which covers the long-term and current trends for Japan's Internet Sector as a whole, as well as eight sub-Sectors or Peer Groups and the Sectors' leading companies by market capitalisation.  Our focus is exclusively on the locally-listed universe and is based on disclosed financial and market data. We do not provide any forecasts, other than the companies' own forecasts and we do not attempt to make any business model or strategic judgments. Our focus is purely on financial and market performance. We do not cover unlisted and defunct companies such as Livedoor and, therefore, there is implicit survivor bias in the data. The broad themes that are developed in DETAIL below are grouped into six topics as follows: - • SUMMARY •  • FUNDAMENTAL OVERVIEW •  • SCORING - RESULTS &amp; REVISIONS / RELATIVE PRICE •  • RESULTS TRENDS •  • VALUATION • • RECOMMENDATIONS •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/083/206/original/2019-03-25_17-46-58.png?1553565764" class="editor-image img-responsive" data-smartkarma-image-id="83206"></figure><div class="content-caption">Source: Japan Analytics</div>OVERVIEW - As will be covered in greater DETAIL below, Japan has failed to evolve a substantial Internet Sector and, in many business models, has been passed by global competitors including in the home market. Although Internet Sector revenues have grown steadily and now account for close to 1% of the total for all listed companies, operating margins have declined by half in the last seven years and are now only four percentage points higher than the market average. Accordingly, as measured by our Results &amp; Revision Score, the Sector is close to a twelve-year low. The market's response is an unchanged Sector weight in the market composite despite the addition of 111 new companies in the last six years, and a Relative Price Score that has moved in a narrow range over that period. The Sector averages disguise the weak business and market performance of a handful of Sector leaders as well as the overvaluation of the Sector's more successful business models, which is partly a result of a lack of alternatives. Despite the world's most significant Internet investor - <a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">Softbank Group (9984 JP)</a>'s Vision Fund - being based in Japan, this fund and other global investors in Internet business have been right to give Japan a 'pass'.


Source: Japan Analytics
There are currently 241 listed Japanese companies that can be categorised as Internet businesses. Our classification overlaps with the TOPIX-33 Information &amp; Communication sub-Sector but is broader in that it encompasses all companies listed on all sections and exchanges but is also narrower in that we have excluded Telecommunications (including Softbank Group (9984 JP)) and Information Technology companies. We have adopted a 'quantamental' approach which covers the long-term and current trends for Japan's Internet Sector as a whole, as well as eight sub-Sectors or Peer Groups and the Sectors' leading companies by market capitalisation.  Our focus is exclusively on the locally-listed universe and is based on disclosed financial and market data. We do not provide any forecasts, other than the companies' own forecasts and we do not attempt to make any business model or strategic judgments. Our focus is purely on financial and market performance. We do not cover unlisted and defunct companies such as Livedoor and, therefore, there is implicit survivor bias in the data. The broad themes that are developed in DETAIL below are grouped into six topics as follows: - • SUMMARY •  • FUNDAMENTAL OVERVIEW •  • SCORING - RESULTS &amp; REVISIONS / RELATIVE PRICE •  • RESULTS TRENDS •  • VALUATION • • RECOMMENDATIONS •Source: Japan AnalyticsOVERVIEW - As will be covered in greater DETAIL below, Japan has failed to evolve a substantial Internet Sector and, in many business models, has been passed by global competitors including in the home market. Although Internet Sector revenues have grown steadily and now account for close to 1% of the total for all listed companies, operating margins have declined by half in the last seven years and are now only four percentage points higher than the market average. Accordingly, as measured by our Results &amp; Revision Score, the Sector is close to a twelve-year low. The market's response is an unchanged Sector weight in the market composite despite the addition of 111 new companies in the last six years, and a Relative Price Score that has moved in a narrow range over that period. The Sector averages disguise the weak business and market performance of a handful of Sector leaders as well as the overvaluation of the Sector's more successful business models, which is partly a result of a lack of alternatives. Despite the world's most significant Internet investor - Softbank Group (9984 JP)'s Vision Fund - being based in Japan, this fund and other global investors in Internet business have been right to give Japan a 'pass'. 

🇯🇵 Japan • Internet Sector Review - 'Japan Passing'

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

ASA Capital Management

ASA Capital Management is a boutique Research and Investment Advisory firm focusing on primary research in India. ASA provides bespoke research services to Institutional Clients with a focus on due diligence backed with primary research, Field Trips & Channel Checks.

Given Indian's demographic dividend of a young working population with rising incomes, the consumer discretionary sector warrants attention. In this insight, based on our interactions with channels on the ground, we attempt to understand what is really driving demand for electronic consumer durables (ECD), a sub-sector under consumer discretionary. Have unorganised players disappeared post GST? What is leading to premiumisation? What drives value for urban and rural customers? What is driving replacement and upgrade cycles? Which brand leads in which category? and is Indian ECD space a earnings growth or a margin expansion story? Our checks visit to unorganised and organised retail include dealers of <a href="https://www.smartkarma.com/entities/9158" target="_blank" data-smartkarma-citation="entities:9158:1">Havells India (HAVL IN)</a> , <a href="https://www.smartkarma.com/entities/24046" target="_blank" data-smartkarma-citation="entities:24046:1">Crompton Greaves Consumer Electricals (CROMPTON IN)</a> , <a href="https://www.smartkarma.com/entities/3254" target="_blank" data-smartkarma-citation="entities:3254:1">V Guard Industries (VGRD IN)</a> &amp; <a href="https://www.smartkarma.com/entities/27791" target="_blank" data-smartkarma-citation="entities:27791:1">Orient Electric Ltd (ORIENTEL IN)</a>

Given Indian's demographic dividend of a young working population with rising incomes, the consumer discretionary sector warrants attention. In this insight, based on our interactions with channels on the ground, we attempt to understand what is really driving demand for electronic consumer durables (ECD), a sub-sector under consumer discretionary. Have unorganised players disappeared post GST? What is leading to premiumisation? What drives value for urban and rural customers? What is driving replacement and upgrade cycles? Which brand leads in which category? and is Indian ECD space a earnings growth or a margin expansion story? Our checks visit to unorganised and organised retail include dealers of Havells India (HAVL IN) , Crompton Greaves Consumer Electricals (CROMPTON IN) , V Guard Industries (VGRD IN) &amp; Orient Electric Ltd (ORIENTEL IN)

Beyond the Street | Demand Drivers for Electronic Consumer Durables Insights from the Ground

Diversified Industries

Avi Dalfen

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

Highlights of significant happenings this past week include:
<div>
<ol>
<li>
Feeding the Dragon -  <a href="https://www.smartkarma.com/entities/26044" target="_blank" data-smartkarma-citation="entities:26044:1">Weichai Power (000338 CH)</a> adds to its global stable of leading clean vehicle technologies; <a href="https://www.smartkarma.com/entities/2332" target="_blank" data-smartkarma-citation="entities:2332:1">Tokyo Gas (9531 JP)</a> and <a href="https://www.smartkarma.com/entities/12418" target="_blank" data-smartkarma-citation="entities:12418:1">Toho Gas Co Ltd (9533 JP)</a> are buying gas from <a href="https://www.smartkarma.com/entities/20668" target="_blank" data-smartkarma-citation="entities:20668:1">Mitsubishi Corp (8058 JP)</a>'s Canadian LNG project; and Korean fund managers are buying real estate accross the Pacific Ocean.</li>
<li>
Local News on Global Companies – <a href="https://www.smartkarma.com/entities/665" target="_blank" data-smartkarma-citation="entities:665:1">Facebook Inc A (FB US)</a> Dating making its debut; <a href="https://www.smartkarma.com/entities/20451" target="_blank" data-smartkarma-citation="entities:20451:1">Netflix Inc (NFLX US)</a>  is the latest technology company being accused of misusing private information; <a href="https://www.smartkarma.com/entities/20824" target="_blank" data-smartkarma-citation="entities:20824:1">Kroger Co (KR US)</a>, <a href="https://www.smartkarma.com/entities/11134" target="_blank" data-smartkarma-citation="entities:11134:1">Wal Mart Stores (WMT US)</a>, and Albertsons Cos. (ABS US), are each spending as much as is needed to stay "relevant"; <a href="https://www.smartkarma.com/entities/3593" target="_blank" data-smartkarma-citation="entities:3593:1">Prologis Inc (PLD US)</a> is starting to look for properties in Brazil; and <a href="https://www.smartkarma.com/entities/984" target="_blank" data-smartkarma-citation="entities:984:1">Yum! Brands Inc (YUM US)</a>'s Pizza Hut will bring a pizza oven to you.</li>
<li>
Trade Deals &amp; No Deals – <a href="https://www.smartkarma.com/entities/127" target="_blank" data-smartkarma-citation="entities:127:1">Geely Automobile Holdings (175 HK)</a>'s plans to export and import Swedish vehicles between the U.S. and China get knocked off the road; and America’s soybean farmers are taking a huge gamble.</li>
<li>
Outliers - What citizens of China, South Korea and Japan should not be photographed doing when they are in Canada.</li>
</ol>
</div>

Highlights of significant happenings this past week include:



Feeding the Dragon -  Weichai Power (000338 CH) adds to its global stable of leading clean vehicle technologies; Tokyo Gas (9531 JP) and Toho Gas Co Ltd (9533 JP) are buying gas from Mitsubishi Corp (8058 JP)'s Canadian LNG project; and Korean fund managers are buying real estate accross the Pacific Ocean.

Local News on Global Companies – Facebook Inc A (FB US) Dating making its debut; Netflix Inc (NFLX US)  is the latest technology company being accused of misusing private information; Kroger Co (KR US), Wal Mart Stores (WMT US), and Albertsons Cos. (ABS US), are each spending as much as is needed to stay "relevant"; Prologis Inc (PLD US) is starting to look for properties in Brazil; and Yum! Brands Inc (YUM US)'s Pizza Hut will bring a pizza oven to you.

Trade Deals &amp; No Deals – Geely Automobile Holdings (175 HK)'s plans to export and import Swedish vehicles between the U.S. and China get knocked off the road; and America’s soybean farmers are taking a huge gamble.

Outliers - What citizens of China, South Korea and Japan should not be photographed doing when they are in Canada.



Business Happenings in the Americas that May Be “Below the Radar” - Week Ending November 13, 2018

Highlights of significant happenings this past week include:
<div>
<ol>
<li>
Feeding the Dragon - <a href="https://www.smartkarma.com/entities/10159" target="_blank" data-smartkarma-citation="entities:10159:1">Johnson Electric (179 HK)</a>, <a href="https://www.smartkarma.com/entities/8466" target="_blank" data-smartkarma-citation="entities:8466:1">Wuhan Iron &amp; Steel Co Ltd A (600005 CH)</a>, and <a href="https://www.smartkarma.com/entities/20833" target="_blank" data-smartkarma-citation="entities:20833:1">Saic Motor Corp Ltd A (600104 CH)</a> are among the Chinese companies acquiring auto parts makers in Canada; and Chinese companies are setting up shop in the U.S. to obtain the scrap paper and plastic their government placed import ban on.</li>
<li>
Local News on Global Companies – <a href="https://www.smartkarma.com/entities/26" target="_blank" data-smartkarma-citation="entities:26:1">Tencent Holdings (700 HK)</a> is searching for more North American acquisitions in just 2 sectors; <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon.com Inc (AMZN US)</a> and <a href="https://www.smartkarma.com/entities/20451" target="_blank" data-smartkarma-citation="entities:20451:1">Netflix Inc (NFLX US)</a> compete while supporting each other;  <a href="https://www.smartkarma.com/entities/19984" target="_blank" data-smartkarma-citation="entities:19984:1">United Parcel Service Cl B (UPS US)</a> is piloting cargo eBikes for last-mile deliveries; and <a href="https://www.smartkarma.com/entities/20359" target="_blank" data-smartkarma-citation="entities:20359:1">Target Corp (TGT US)</a> is offering better shipping options to compete with <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon.com Inc (AMZN US)</a> and <a href="https://www.smartkarma.com/entities/11134" target="_blank" data-smartkarma-citation="entities:11134:1">Wal Mart Stores (WMT US)</a>.</li>
<li>
Trade Deals &amp; No Deals – Latin American farmers are benefiting, but Canadian farmers are hurting from the U.S.-China Trade Conflict</li>
<li>
Outliers - A marijuana shortage hits Canada. </li>
</ol>
</div>

Highlights of significant happenings this past week include:



Feeding the Dragon - Johnson Electric (179 HK), Wuhan Iron &amp; Steel Co Ltd A (600005 CH), and Saic Motor Corp Ltd A (600104 CH) are among the Chinese companies acquiring auto parts makers in Canada; and Chinese companies are setting up shop in the U.S. to obtain the scrap paper and plastic their government placed import ban on.

Local News on Global Companies – Tencent Holdings (700 HK) is searching for more North American acquisitions in just 2 sectors; Amazon.com Inc (AMZN US) and Netflix Inc (NFLX US) compete while supporting each other;  United Parcel Service Cl B (UPS US) is piloting cargo eBikes for last-mile deliveries; and Target Corp (TGT US) is offering better shipping options to compete with Amazon.com Inc (AMZN US) and Wal Mart Stores (WMT US).

Trade Deals &amp; No Deals – Latin American farmers are benefiting, but Canadian farmers are hurting from the U.S.-China Trade Conflict

Outliers - A marijuana shortage hits Canada. 



Business Happenings in the Americas that May Be “Below the Radar” - Week Ending October 28, 2018

Investors using the Smartkarma (SMARTKARMA SP) platform may find useful the following information, along with our observations, on developments in North America and in South America.
Highlights of significant happenings this past week include:
<div>
<ol>
<li>
Feeding the Dragon -  <a href="https://www.smartkarma.com/entities/132" target="_blank" data-smartkarma-citation="entities:132:1">Ck Hutchison Holdings (1 HK)</a>-controlled company is hunting assets in the oil sands, and Mexico's new president is looking to Asia for Pacific port preferment partners.</li>
<li>
Local News on Global Companies –  <a href="https://www.smartkarma.com/entities/20962" target="_blank" data-smartkarma-citation="entities:20962:1">BYD Co Ltd (H) (1211 HK)</a> has success in selling battery operated tour buses, <a href="https://www.smartkarma.com/entities/1291" target="_blank" data-smartkarma-citation="entities:1291:1">Ebay Inc (EBAY US)</a> is suing <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon.com Inc (AMZN US)</a> for dirty tricks, <a href="https://www.smartkarma.com/entities/4904" target="_blank" data-smartkarma-citation="entities:4904:1">Ryder System (R US)</a> is upping its North American e-fulfillment capabilities, and retailers <a href="https://www.smartkarma.com/entities/11134" target="_blank" data-smartkarma-citation="entities:11134:1">Wal Mart Stores (WMT US)</a> and <a href="https://www.smartkarma.com/entities/20359" target="_blank" data-smartkarma-citation="entities:20359:1">Target Corp (TGT US)</a> are each buying more companies to offer new products and services as sector competition intensifies. </li>
<li>
Trade Deals &amp; No Deals – Argentina, Chile and Canada all taking advantage of new opportunities to ramp-up sales to China, while the U.S. State of Illinois is being harmed.  </li>
<li>
Outliers - Legalizing pot for recreational use means new highs for greenhouse prices in Canada, and U.S. highway congestion continuing to get worse, increasing costs for the trucking industry.</li>
</ol>
</div>

Investors using the Smartkarma (SMARTKARMA SP) platform may find useful the following information, along with our observations, on developments in North America and in South America.
Highlights of significant happenings this past week include:



Feeding the Dragon -  Ck Hutchison Holdings (1 HK)-controlled company is hunting assets in the oil sands, and Mexico's new president is looking to Asia for Pacific port preferment partners.

Local News on Global Companies –  BYD Co Ltd (H) (1211 HK) has success in selling battery operated tour buses, Ebay Inc (EBAY US) is suing Amazon.com Inc (AMZN US) for dirty tricks, Ryder System (R US) is upping its North American e-fulfillment capabilities, and retailers Wal Mart Stores (WMT US) and Target Corp (TGT US) are each buying more companies to offer new products and services as sector competition intensifies. 

Trade Deals &amp; No Deals – Argentina, Chile and Canada all taking advantage of new opportunities to ramp-up sales to China, while the U.S. State of Illinois is being harmed.  

Outliers - Legalizing pot for recreational use means new highs for greenhouse prices in Canada, and U.S. highway congestion continuing to get worse, increasing costs for the trucking industry.



Business Happenings in the Americas that May Be “Below the Radar” - Week Ending October 21, 2018

United States

Walmart Inc. operates discount stores, supercenters, and neighborhood markets. The Company offers merchandise such as apparel, house wares, small appliances, electronics, musical instruments, books, home improvement, shoes, jewelry, toddler, games, household essentials, pets, pharmaceutical products, party supplies, and automotive tools. Walmart serves customers worldwide.

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Walmart (WMT US)

🇯🇵 Japan • Internet Sector Review - 'Japan Passing'

There are currently 241 listed Japanese companies that can be categorised as Internet businesses. Our classification overlaps with the TOPIX-33...

Campbell Gunn

Beyond the Street | Demand Drivers for Electronic Consumer Durables Insights from the Ground

Given Indian's demographic dividend of a young working population with rising incomes, the consumer discretionary sector warrants attention. In...

Pranav Bhavsar

Business Happenings in the Americas that May Be “Below the Radar” - Week Ending November 13, 2018

Highlights of significant happenings this past week include: Feeding the Dragon - Weichai Power (000338 CH) adds to its global stable of...

Avi Dalfen

Business Happenings in the Americas that May Be “Below the Radar” - Week Ending October 28, 2018

Highlights of significant happenings this past week include: Feeding the Dragon - Johnson Electric (179 HK), Wuhan Iron & Steel Co Ltd A...

Avi Dalfen

Business Happenings in the Americas that May Be “Below the Radar” - Week Ending October 21, 2018

Investors using the Smartkarma (SMARTKARMA SP) platform may find useful the following information, along with our observations, on developments in...

Avi Dalfen

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