'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)

<p style="text-align: center;"><strong>• BEST &amp; WORST • </strong></p><p>Our best and worst mega-cap pair from Thursday's 135 results and 64 forecasts/revisions announcements is <a href="https://www.smartkarma.com/entities/japan-exchange-group-inc" target="_blank" data-smartkarma-citation="entities:11266:1" rel="noopener">Japan Exchange (8697 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a>. Amongst large caps, our picks are <a href="https://www.smartkarma.com/entities/paltac-corporation" target="_blank" data-smartkarma-citation="entities:20014:1" rel="noopener">Paltac (8283 JP)</a> and <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl (4921 JP)</a>. 69% of companies had improved Results Scores, and 68% of annual revisions scored positively.  Only 10% of companies posted quarterly losses.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/303/original/2021-01-29_05-38-04.png?1611866299" class="editor-image img-responsive" data-smartkarma-image-id="185303"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/304/original/2021-01-29_05-38-53.png?1611866346" class="editor-image img-responsive" data-smartkarma-image-id="185304"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/305/original/2021-01-29_05-39-46.png?1611866397" class="editor-image img-responsive" data-smartkarma-image-id="185305"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/306/original/2021-01-29_05-42-15.png?1611866547" class="editor-image img-responsive" data-smartkarma-image-id="185306"></figure></section><div class="content-caption">   Source for all charts &amp; tables: Japan Analytics</div>

• BEST &amp; WORST • Our best and worst mega-cap pair from Thursday's 135 results and 64 forecasts/revisions announcements is Japan Exchange (8697 JP) and Tokyo Electron (8035 JP). Amongst large caps, our picks are Paltac (8283 JP) and Fancl (4921 JP). 69% of companies had improved Results Scores, and 68% of annual revisions scored positively.  Only 10% of companies posted quarterly losses.   Source for all charts &amp; tables: Japan Analytics

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​​​​​​​​​28 JPX, TEL, Fancl...

<div class="content-highlight"><p style="text-align: center;"><strong><em>"Beware of geeks bearing formulas." - Warren Buffett </em></strong></p></div><p>Enterprise Value multiples have become common parlance in the investment world, both <strong>Enterprise Value/Operating Profit</strong> (EV/OP or EV/EBIT) and it's flawed 'bastard' cousin EV/EBITDA which we will leave well alone for this Insight. With markets supported on a cloud of central bank's liquidity and corporate trailing earnings distorted by COVID-19, many valuation ratios appear meaningless. To inject a dose of reality into the analysis of Japanese corporate valuations, we have created a new metric -<strong> Enterprise Value/Peak Operating Profit (EV/POP).</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/155/071/original/2020-08-26_10-36-07.png?1598405812" class="editor-image img-responsive" data-smartkarma-image-id="155071"></figure><div class="content-caption">Source: Japan Analytics (applies to all charts below)</div><p><strong>EV &amp; OP TIMELINE</strong> - Using currently-listed non-financial companies (with the four exceptions noted in the legend above), the correlation between Enterprise Value (here divided by 10) and Operating Income has increased since 2013. However, the current positive EV&lt;&gt;OP 'spread' is now larger than at any time since 2002. While non-financial Operating Profits have declined by 22% since peaking in the first quarter of FY2019, Enterprise Value is just ¥2.9 trillion, or 5% below its <a href="mailto:FY18-@Q" target="_blank" rel="noopener">FY18-</a>2Q peak level. Where the lines converge, the EV/OP multiple is 10 times, which is close to the sixteen-year average and the arbitrary line we shall use to distinguish the overvalued from the undervalued. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/155/075/original/2020-08-26_10-56-07.png?1598406979" class="editor-image img-responsive" data-smartkarma-image-id="155075"></figure><p><strong>EV/OP &amp; EV/POP</strong> - Aggregate EV/OP is now 11.6 times, breaking out of a narrow range to reach a  new a ten-year high. EV/POP reached a five-year low in March of 7.9 times but is now 20 basis points above the seven-year average of 8.8 times. By neither measure could the market be considered cheap; however, in EV/POP terms, aggregate valuations are only just above average.  For several favoured companies for which the market is prepared to pay any price for their perceived quality EV/POP multiple are far from average as in the examples below. At the other end of the valuation spectrum, EV/POP reveals some clear bargain-hunting opportunities.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/155/100/original/2020-08-26_13-12-11.png?1598415140" class="editor-image img-responsive" data-smartkarma-image-id="155100"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/155/102/original/2020-08-26_13-12-39.png?1598415169" class="editor-image img-responsive" data-smartkarma-image-id="155102"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/155/104/original/2020-08-26_13-15-58.png?1598415375" class="editor-image img-responsive" data-smartkarma-image-id="155104"></figure><p>In the <strong>DETAIL</strong> section, we look at the non-financial companies at more examples from both extremes of this metric, in an attempt to pick potential winners and losers as the world slowly normalises and liquidity begins to ebb.  We have purposely excluded companies with negative Enterprise Values, which we shall cover in a upcoming Insight. We have also excluded companies that have listed only in the last four years.</p>

"Beware of geeks bearing formulas." - Warren Buffett Enterprise Value multiples have become common parlance in the investment world, both Enterprise Value/Operating Profit (EV/OP or EV/EBIT) and it's flawed 'bastard' cousin EV/EBITDA which we will leave well alone for this Insight. With markets supported on a cloud of central bank's liquidity and corporate trailing earnings distorted by COVID-19, many valuation ratios appear meaningless. To inject a dose of reality into the analysis of Japanese corporate valuations, we have created a new metric - Enterprise Value/Peak Operating Profit (EV/POP).Source: Japan Analytics (applies to all charts below)EV &amp; OP TIMELINE - Using currently-listed non-financial companies (with the four exceptions noted in the legend above), the correlation between Enterprise Value (here divided by 10) and Operating Income has increased since 2013. However, the current positive EV&lt;&gt;OP 'spread' is now larger than at any time since 2002. While non-financial Operating Profits have declined by 22% since peaking in the first quarter of FY2019, Enterprise Value is just ¥2.9 trillion, or 5% below its FY18-2Q peak level. Where the lines converge, the EV/OP multiple is 10 times, which is close to the sixteen-year average and the arbitrary line we shall use to distinguish the overvalued from the undervalued. EV/OP &amp; EV/POP - Aggregate EV/OP is now 11.6 times, breaking out of a narrow range to reach a  new a ten-year high. EV/POP reached a five-year low in March of 7.9 times but is now 20 basis points above the seven-year average of 8.8 times. By neither measure could the market be considered cheap; however, in EV/POP terms, aggregate valuations are only just above average.  For several favoured companies for which the market is prepared to pay any price for their perceived quality EV/POP multiple are far from average as in the examples below. At the other end of the valuation spectrum, EV/POP reveals some clear bargain-hunting opportunities.In the DETAIL section, we look at the non-financial companies at more examples from both extremes of this metric, in an attempt to pick potential winners and losers as the world slowly normalises and liquidity begins to ebb.  We have purposely excluded companies with negative Enterprise Values, which we shall cover in a upcoming Insight. We have also excluded companies that have listed only in the last four years.

🇯🇵 JAPAN • Stock Picking with 'Peak' EV/OP Multiples - Introducing EV/POP

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/834/original/2020-08-02_06-39-22.png?1596317982" class="editor-image img-responsive" data-smartkarma-image-id="149834"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>CORRECTION</strong> - The last day of July saw the TOPIX index fall by 2.8% to reach a new two-month low, 8.2% below the closing high of June 8th. A combination of a strong yen, peak COVID-19 cases, the continuing unedifying stream of results &amp; revisions, and month-end portfolio 'adjustments' proved toxic. Our Results Score lost a further 57 basis points, while bullish initial full-year forecasts from <a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a> and <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso (6902 JP)</a> helped the Forecast/Revision Score recover by 51 basis points. Nevertheless, the market's correlation with earnings and revisions momentum remains distorted by central bank liquidity. As noted in<a href="https://www.smartkarma.com/insights/japan-market-update-tired" target="_blank" data-smartkarma-citation="insights:41562" rel="noopener"> Tired</a>, we expect both our Scores to bottom nearer the 2009 lows, in which case the Bank of Japan's cumulative purchases could reach over 10% of market value.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/839/original/2020-08-02_07-35-10.png?1596321328" class="editor-image img-responsive" data-smartkarma-image-id="149839"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>DOWNFALL</strong> - After one-third of quarterly earnings announcements, at the current pace forward aggregate operating and net income could reach ¥35 trillion and ¥20 trillion, respectively by the end of the month, taking the market multiple to 30x, absent any further correction in share prices. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/840/original/2020-08-02_07-52-16.png?1596322358" class="editor-image img-responsive" data-smartkarma-image-id="149840"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>SECTOR SCORES</strong> - As in past cycles, the <strong>Information Technology</strong>,<strong> Internet</strong>, and<strong> Healthcare</strong> Sectors have proved to be the most resilient. On the downside, the breadth of the lowest-scoring Sectors is abnormal, with <strong>Consumer Services</strong> and <strong>Transport &amp; Logistics</strong> joining <strong>Metals</strong>, <strong>Autos</strong>, <strong>Eletcial Equipment</strong> and<strong> Machinery</strong>. The trailing-twelve-month (TTM) results in the table below confirm the chart above but suggests some caution over <strong>Internet</strong> Sector margins.   </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/842/original/2020-08-02_07-59-45.png?1596322803" class="editor-image img-responsive" data-smartkarma-image-id="149842"></figure><div class="content-caption">Source • Japan Analytics</div><hr><p style="text-align: center;"><strong>•BEST &amp; WORST 31st JULY •</strong></p><p style="text-align: left;"><strong>BEST &amp; WORST</strong> - Combining the day's results, revisions and forecasts, we select the 'best' and the 'worst' announcements according to our scoring. On the podium were <a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a> and <a href="https://www.smartkarma.com/entities/infocom-corp" target="_blank" data-smartkarma-citation="entities:8412:1" rel="noopener">Infocom (4348 JP)</a>. In the pits were <a href="https://www.smartkarma.com/entities/casio-computer-co-ltd" target="_blank" data-smartkarma-citation="entities:18338:1" rel="noopener">Casio Computer (6952 JP)</a> and three railway lines - <a href="https://www.smartkarma.com/entities/odakyu-electric-railway-co" target="_blank" data-smartkarma-citation="entities:5405:1" rel="noopener">Odakyu (9007 JP)</a>, <a href="https://www.smartkarma.com/entities/west-japan-railway-co" target="_blank" data-smartkarma-citation="entities:12077:1" rel="noopener">West Japan (9021 JP)</a> and <a href="https://www.smartkarma.com/entities/central-japan-railway-co" target="_blank" data-smartkarma-citation="entities:13520:1" rel="noopener">Central Japan (9022 JP)</a> for which we will show the Peer Group's record-low long-term Scores.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/913/original/2020-08-02_08-30-42.png?1596324654" class="editor-image img-responsive" data-smartkarma-image-id="149913"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/914/original/2020-08-02_08-31-29.png?1596324699" class="editor-image img-responsive" data-smartkarma-image-id="149914"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/915/original/2020-08-02_08-33-28.png?1596324818" class="editor-image img-responsive" data-smartkarma-image-id="149915"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/149/916/original/2020-08-02_08-40-22.png?1596325251" class="editor-image img-responsive" data-smartkarma-image-id="149916"></figure><div class="content-caption">Source • Japan Analytics</div><div>
<hr>
<p style="text-align: center;"><strong>DAILY STATS</strong></p>
<p style="text-align: left;"><strong>PERCENTAGES</strong> - <strong>66%</strong> of quarterly results,  <strong>71%</strong> of annual forecasts/revisions and <strong>75%</strong> of interim forecasts have negative Scores and <strong>26%</strong> of companies reporting lost money for the quarter.</p>
</div><hr><div><p style="text-align: center;"><strong>429 Quarterly Results</strong></p></div><div><ul>
<li>
<strong>Results Score:</strong> 28% Positive / 6% Neutral / 66% Negative</li>
<li>
<strong>Average Results Score Change:</strong> -3.1 points</li>
<li>
<strong>Average % Change in Revenue:</strong> -9.3% Quarter YoY / -2.0% Rolling TTM YoY </li>
<li>
<strong>Average Operating Profit Margin Change:</strong> -1.0 ppt</li>
<li>
<strong>Percentage Making Quarterly Losses:</strong> 26%</li>
</ul></div><hr><div><p style="text-align: center;"><br><strong>153 Annual • 115 Interim Forecasts/Revisions</strong></p></div><div><ul>
<li>
<strong>Annual Forecast/Revision Score:</strong> 26% Positive / 3% Neutral / 71% Negative</li>
<li>
<strong>Interim Forecast/Revision Score Change</strong>: 24% Positive / 1% Neutral / 75% Negative</li>
<li>
<strong>Average Forecast/Revision Score Change:</strong> -8.4 points</li>
</ul></div>

Source • Japan AnalyticsCORRECTION - The last day of July saw the TOPIX index fall by 2.8% to reach a new two-month low, 8.2% below the closing high of June 8th. A combination of a strong yen, peak COVID-19 cases, the continuing unedifying stream of results &amp; revisions, and month-end portfolio 'adjustments' proved toxic. Our Results Score lost a further 57 basis points, while bullish initial full-year forecasts from Takeda Pharmaceutical (4502 JP) and Denso (6902 JP) helped the Forecast/Revision Score recover by 51 basis points. Nevertheless, the market's correlation with earnings and revisions momentum remains distorted by central bank liquidity. As noted in Tired, we expect both our Scores to bottom nearer the 2009 lows, in which case the Bank of Japan's cumulative purchases could reach over 10% of market value.Source • Japan AnalyticsDOWNFALL - After one-third of quarterly earnings announcements, at the current pace forward aggregate operating and net income could reach ¥35 trillion and ¥20 trillion, respectively by the end of the month, taking the market multiple to 30x, absent any further correction in share prices. Source • Japan AnalyticsSECTOR SCORES - As in past cycles, the Information Technology, Internet, and Healthcare Sectors have proved to be the most resilient. On the downside, the breadth of the lowest-scoring Sectors is abnormal, with Consumer Services and Transport &amp; Logistics joining Metals, Autos, Eletcial Equipment and Machinery. The trailing-twelve-month (TTM) results in the table below confirm the chart above but suggests some caution over Internet Sector margins.   Source • Japan Analytics•BEST &amp; WORST 31st JULY •BEST &amp; WORST - Combining the day's results, revisions and forecasts, we select the 'best' and the 'worst' announcements according to our scoring. On the podium were Takeda Pharmaceutical (4502 JP) and Infocom (4348 JP). In the pits were Casio Computer (6952 JP) and three railway lines - Odakyu (9007 JP), West Japan (9021 JP) and Central Japan (9022 JP) for which we will show the Peer Group's record-low long-term Scores.Source • Japan Analytics

DAILY STATS
PERCENTAGES - 66% of quarterly results,  71% of annual forecasts/revisions and 75% of interim forecasts have negative Scores and 26% of companies reporting lost money for the quarter.
429 Quarterly Results

Results Score: 28% Positive / 6% Neutral / 66% Negative

Average Results Score Change: -3.1 points

Average % Change in Revenue: -9.3% Quarter YoY / -2.0% Rolling TTM YoY 

Average Operating Profit Margin Change: -1.0 ppt

Percentage Making Quarterly Losses: 26%
 153 Annual • 115 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 26% Positive / 3% Neutral / 71% Negative

Interim Forecast/Revision Score Change: 24% Positive / 1% Neutral / 75% Negative

Average Forecast/Revision Score Change: -8.4 points


🇯🇵 JAPAN • Results & Revisions 31st July - Takeda, Yamato/SG, Seria, FP, Keyence, Dai-Ichi Sankyo

Japan Specialist

Mark Chadwick

<ul>
<li>The Corona virus was an effective muzzle on activist demands this year. It also gave companies a convenient excuse to curtail investor participation. </li>
<li>Virtually all shareholder proposals were rejected. It could be written off as "when disaster strikes people come together". </li>
<li>This should not detract from the significant improvements in corporate governance to date nor the less visible wins that take place behind closed doors. </li>
<li>Japanese cash-rich companies look even more attractive relative to global peers. Activism is not going away. Perhaps, the approach may change. </li>
</ul>


The Corona virus was an effective muzzle on activist demands this year. It also gave companies a convenient excuse to curtail investor participation. 
Virtually all shareholder proposals were rejected. It could be written off as "when disaster strikes people come together". 
This should not detract from the significant improvements in corporate governance to date nor the less visible wins that take place behind closed doors. 
Japanese cash-rich companies look even more attractive relative to global peers. Activism is not going away. Perhaps, the approach may change. 


Japanese Activism: Playing Behind Closed Doors

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/130/679/original/2020-05-01_05-31-11.png?1588278692" class="editor-image img-responsive" data-smartkarma-image-id="130679"></figure><div class="content-caption">Source • Japan Analytics</div><div class="content-caption"></div><p><strong>COMFORT BLANKET</strong> - As the politically-motivated Central Banks smother equity markets with the comfort blanket of the 'mother of all QEs', the reality of what The Economist describes as the '90% Economy' unfolds in the daily earnings and forecasts revisions announced by Japanese companies. In some cases, such as <a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec (6594 JP)</a>, the picture is distorted by the strength in overseas demand in February as Chinese competition was put on hold and the rest of North Asia took up the resulting 'slack'. As we have noted before, the first and second-order impacts of COVID-19 will not be revealed until the August and November results, when we expect both of our Scores to be closer to their 2009 troughs. Meanwhile, the US Federal Reserves trillion-dollar rescue package will keep upward pressure on the yen as the Bank of Japan struggles to keep up.  </p><p><strong>COUNTERMEASURES</strong> - Japan's revised supplementary budget was approved yesterday, allowing for interest-free loans to businesses, tax deferrals and cash handouts to all households. The COVID crisis has also prompted Japan to engage in a bout of 'magical thinking' allowing for the rolling back or revision of many long-cherished traditions:-</p><ul>
<li>The start of the academic year will now probably be pushed back to September this year - discussions have started to make this shift permanent, finally bringing Japan into line with the rest of the world.</li>
<li>Hanko personal and corporate seals that are required to certify documents may now also be going the way of the dodo as the Keidanren business organisation has acknowledged that they 'do not meet the digital age'.</li>
</ul><hr><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/130/680/original/File%202020-05-01%203%2039%2027.jpeg?1588280828" class="editor-image img-responsive" data-smartkarma-image-id="130680"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/130/681/original/File%202020-05-01%203%2027%2003.jpeg?1588280873" class="editor-image img-responsive" data-smartkarma-image-id="130681"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/130/683/original/File%202020-05-01%203%2040%2007.jpeg?1588281553" class="editor-image img-responsive" data-smartkarma-image-id="130683"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/130/682/original/File%202020-05-01%203%2031%2028.jpeg?1588280903" class="editor-image img-responsive" data-smartkarma-image-id="130682"></figure><div class="content-caption">Source • ourworldindata.org</div><p><strong>MAYDAY</strong> - Although Japan's daily case count has fallen to around 200, the medical experts advising the Japanese government are suggesting that this level will require an extension to the states of emergency (SOEs) currently operating in all prefectures beyond May 6th. Hospitals are still working at above-normal capacity, and patients are still being turned away from many hospitals. Alarmingly Japan's current eight death-doubling-days count is amongst the worst in the world. Also, excess mortality data for Tokyo suggests that, in March, there were over 60 excess deaths a week not attributed to COVID-19. The expectation is that the SOEs will be extended to Sunday, May 31st and that schools will not reopen until September. In most European countries extensive testing is one of the requisites for easing lockdown restrictions, and the UK is now ramping up testing capacity in anticipation. Japan's woeful record on testing will become a factor by the end of May. Japan's case fatality rate of 3% suggests that the number of cases could be ten times the official number.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/130/684/original/2020-05-01_06-41-23.png?1588282906" class="editor-image img-responsive" data-smartkarma-image-id="130684"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>30TH APRIL -</strong> In the <strong>DETAIL</strong> below, we shall review Thursday's large-cap results, revisions and initial forecast announcements.  The positive/neutral/negative balance for the 132 results was 51:10:71; and for the 83 revisions or initial forecasts, the split was 30:7:43. Of the 98 companies announcing annual results, only 43 made forecasts for the current year. The ratio of dividend cuts to increases was 5:10 with <a href="https://www.smartkarma.com/entities/japan-exchange-group-inc" target="_blank" data-smartkarma-citation="entities:11266:1" rel="noopener">Japan Exchange Group (8697 JP)</a> being the most prominent in the former camp.</p>

Source • Japan AnalyticsCOMFORT BLANKET - As the politically-motivated Central Banks smother equity markets with the comfort blanket of the 'mother of all QEs', the reality of what The Economist describes as the '90% Economy' unfolds in the daily earnings and forecasts revisions announced by Japanese companies. In some cases, such as Nidec (6594 JP), the picture is distorted by the strength in overseas demand in February as Chinese competition was put on hold and the rest of North Asia took up the resulting 'slack'. As we have noted before, the first and second-order impacts of COVID-19 will not be revealed until the August and November results, when we expect both of our Scores to be closer to their 2009 troughs. Meanwhile, the US Federal Reserves trillion-dollar rescue package will keep upward pressure on the yen as the Bank of Japan struggles to keep up.  COUNTERMEASURES - Japan's revised supplementary budget was approved yesterday, allowing for interest-free loans to businesses, tax deferrals and cash handouts to all households. The COVID crisis has also prompted Japan to engage in a bout of 'magical thinking' allowing for the rolling back or revision of many long-cherished traditions:-
The start of the academic year will now probably be pushed back to September this year - discussions have started to make this shift permanent, finally bringing Japan into line with the rest of the world.
Hanko personal and corporate seals that are required to certify documents may now also be going the way of the dodo as the Keidanren business organisation has acknowledged that they 'do not meet the digital age'.
Source • ourworldindata.orgMAYDAY - Although Japan's daily case count has fallen to around 200, the medical experts advising the Japanese government are suggesting that this level will require an extension to the states of emergency (SOEs) currently operating in all prefectures beyond May 6th. Hospitals are still working at above-normal capacity, and patients are still being turned away from many hospitals. Alarmingly Japan's current eight death-doubling-days count is amongst the worst in the world. Also, excess mortality data for Tokyo suggests that, in March, there were over 60 excess deaths a week not attributed to COVID-19. The expectation is that the SOEs will be extended to Sunday, May 31st and that schools will not reopen until September. In most European countries extensive testing is one of the requisites for easing lockdown restrictions, and the UK is now ramping up testing capacity in anticipation. Japan's woeful record on testing will become a factor by the end of May. Japan's case fatality rate of 3% suggests that the number of cases could be ten times the official number.Source • Japan Analytics30TH APRIL - In the DETAIL below, we shall review Thursday's large-cap results, revisions and initial forecast announcements.  The positive/neutral/negative balance for the 132 results was 51:10:71; and for the 83 revisions or initial forecasts, the split was 30:7:43. Of the 98 companies announcing annual results, only 43 made forecasts for the current year. The ratio of dividend cuts to increases was 5:10 with Japan Exchange Group (8697 JP) being the most prominent in the former camp.

🇯🇵 JAPAN • Results & Revisions Update 30th April - D1Life, Toto, JR-W, CTC, Murata, Nidec, Mercari

Japan

West Japan Railway Company provides rail transportation services including the shinkansen network (bullet train) in North Kyushu, Kinki, Chugoku, and Hokuriku including Kyoto and Osaka.  The Company also operates ferries in Miyajima, manages real estate, shopping centers, and hotels, and offers leisure-related services such as travel packaging products.

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West Japan Railway Co (9021 JP)

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🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​​​​​​​​​28 JPX, TEL, Fancl...

69% of companies had improved Results Scores, and 68% of annual revisions scored positively. Only 10% of companies posted quarterly losses.

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CORRECTION - The last day of July saw the TOPIX index fall by 2.8% to reach a new two-month low, 8.2% below the closing high of June 8th. A...

Campbell Gunn

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The Corona virus was an effective muzzle on activist demands this year. It also gave companies a convenient excuse to curtail investor...

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🇯🇵 JAPAN • Results & Revisions Update 30th April - D1Life, Toto, JR-W, CTC, Murata, Nidec, Mercari

COMFORT BLANKET - As the politically-motivated Central Banks smother equity markets with the comfort blanket of the 'mother of all QEs', the...

Campbell Gunn

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