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.

Thematic (Sector/Industry)

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<p>This insight is a sequel to our monthly auto tracker insights. It covers the performance of the auto sector in India for the month of August, 2020. We look at four main aspects - the four wheeler vehicle segment, the two wheeler vehicle segment, vehicle registration data and alternative data search trends. We also now report OEM volumes covering <a href="https://www.smartkarma.com/entities/maruti-suzuki-india-ltd" target="_blank" data-smartkarma-citation="entities:733:1" rel="noopener">Maruti Suzuki India (MSIL IN)</a> , <a href="https://www.smartkarma.com/entities/tvs-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:16123:1" rel="noopener">TVS Motor (TVSL IN)</a> ,<a href="https://www.smartkarma.com/entities/eicher-motors-ltd" target="_blank" data-smartkarma-citation="entities:18316:1" rel="noopener">Eicher Motors (EIM IN)</a> and <a href="https://www.smartkarma.com/entities/hero-motocorp-ltd" target="_blank" data-smartkarma-citation="entities:2391:1" rel="noopener">Hero Motocorp (HMCL IN)</a> . </p>
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<p>August data shows the slight turn in consumers' behaviour towards the segment. With government initiatives now focussed on rejuvenating public transport, consumers are now backing away from private vehicle purchases. There has been an incredible growth in the two-wheeler segment and we also see an optimistic return to normalcy in rural India.</p>
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<p>This is a Joint insight with <a href="https://www.smartkarma.com/profiles/nitin-mangal" target="_blank" data-smartkarma-citation="accounts:1988" rel="noopener">Nitin Mangal</a> </p>
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This insight is a sequel to our monthly auto tracker insights. It covers the performance of the auto sector in India for the month of August, 2020. We look at four main aspects - the four wheeler vehicle segment, the two wheeler vehicle segment, vehicle registration data and alternative data search trends. We also now report OEM volumes covering Maruti Suzuki India (MSIL IN) , TVS Motor (TVSL IN) ,Eicher Motors (EIM IN) and Hero Motocorp (HMCL IN) . 


August data shows the slight turn in consumers' behaviour towards the segment. With government initiatives now focussed on rejuvenating public transport, consumers are now backing away from private vehicle purchases. There has been an incredible growth in the two-wheeler segment and we also see an optimistic return to normalcy in rural India.

This is a Joint insight with Nitin Mangal 



India Autos | Auto Tracker for August - YoY Volume Recovery

'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.

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/136/651/original/2020-05-29_06-37-52.png?1590701909" class="editor-image img-responsive" data-smartkarma-image-id="136651"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>LIMPING HOME</strong> - 42 companies reported results on Thursday of which 32 were for the full-year. Of these, 38% made FY2021 forecasts of which only three scored positively. Seventy more companies will announce today, including <a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" data-smartkarma-citation="entities:7797:1" rel="noopener">Hitachi Ltd (6501 JP)</a>, <a href="https://www.smartkarma.com/entities/olympus-corp" target="_blank" data-smartkarma-citation="entities:356:1" rel="noopener">Olympus Corp (7733 JP)</a>, and <a href="https://www.smartkarma.com/entities/yamaha-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:7411:1" rel="noopener">Yamaha Motor (7272 JP)</a>, leaving only <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba (6502 JP)</a> from the 'trillion yen club' for next week. </p>

Source • Japan AnalyticsLIMPING HOME - 42 companies reported results on Thursday of which 32 were for the full-year. Of these, 38% made FY2021 forecasts of which only three scored positively. Seventy more companies will announce today, including Hitachi Ltd (6501 JP), Olympus Corp (7733 JP), and Yamaha Motor (7272 JP), leaving only Toshiba (6502 JP) from the 'trillion yen club' for next week. 

🇯🇵 JAPAN • Results & Revisions 28th May - Nissan, Nikon & Toray

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. 

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/117/590/original/2020-02-13_03-51-57.png?1581538303" class="editor-image img-responsive" data-smartkarma-image-id="117590"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>12TH FEBRUARY ROUNDUP</strong> - 272 results and 122 revisions announcements were made yesterday. Our Results Score declined by another 18 basis points to reach -0.65, while the Forecast /Revision  Score added 6bps thanks to upbeat initial FY2020 forecasts from <a href="https://www.smartkarma.com/entities/shimano-inc" target="_blank" data-smartkarma-citation="entities:3777:1" rel="noopener">Shimano (7309 JP)</a> and <a href="https://www.smartkarma.com/entities/yamaha-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:7411:1" rel="noopener">Yamaha Motor (7272 JP)</a>.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/117/591/original/2020-02-13_03-58-17.png?1581538602" class="editor-image img-responsive" data-smartkarma-image-id="117591"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>SECTOR TIMELINE</strong> - This quarter's Sector winners and losers are now becoming more apparent. in the former camp are <strong>Banks</strong>, <strong>Energy</strong>,  <strong>Tech Hardware</strong>, <strong>Food, Beverages &amp; Tobacco</strong>, and <strong>Non-Bank Finance,</strong> while the latter includes<strong> Other Commercial Products</strong>, <strong>Transportation &amp; Logistics</strong>, <strong>Chemicals</strong>, <strong>Building Materials</strong>, and <strong>Media</strong>. The largest one-day changes were in <strong>Energy</strong> (<a href="https://www.smartkarma.com/entities/inpex-corp" target="_blank" data-smartkarma-citation="entities:20665:1" rel="noopener">Inpex (1605 JP)</a>) and <strong>Telecommunications</strong> (<a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a>).  825 companies have yet to report, of which 385 are due today and a similar number on Friday.</p>

Source • Japan Analytics12TH FEBRUARY ROUNDUP - 272 results and 122 revisions announcements were made yesterday. Our Results Score declined by another 18 basis points to reach -0.65, while the Forecast /Revision  Score added 6bps thanks to upbeat initial FY2020 forecasts from Shimano (7309 JP) and Yamaha Motor (7272 JP).Source • Japan AnalyticsSECTOR TIMELINE - This quarter's Sector winners and losers are now becoming more apparent. in the former camp are Banks, Energy,  Tech Hardware, Food, Beverages &amp; Tobacco, and Non-Bank Finance, while the latter includes Other Commercial Products, Transportation &amp; Logistics, Chemicals, Building Materials, and Media. The largest one-day changes were in Energy (Inpex (1605 JP)) and Telecommunications (Softbank Group (9984 JP)).  825 companies have yet to report, of which 385 are due today and a similar number on Friday.

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 12th February ▲9449 6273 7309 ▼ 3769 6367 4324

Analyst - Japan Autos, Hirakata Office

Noriaki Hirakata, CFA

Analyst - Japan Autos

Hirakata Office

<p>Japanese automotive industry saw only a marginal, but still better than expected operating profit growth in 1QFY18.<br><br>Industrywide operating profit grew only by 5.5% YoY as among other negative factors, FX, rising raw material prices and severe competition in US markets took its toll.</p><div class="content-highlight"><p>Remarkably, there is a strong disparity in profit growth when looking at each companies respective market focus. A focus on Asian markets or what we call “Asia focused school” seemed to have paid off with significantly higher profit growth than a focus on major markets or what we call “Mega market school”. Asia focused names like Suzuki or MMC reported a 30% higher profit growth on the back of a strong volume rise and product mix improvements in Asia.</p></div><p>It was a moderately negative surprise to us that Asian focused Yamaha motor`s results overall disappointed as their operations in mega markets performed worse than expected.    <br><br>What major markets focused names are concerned, SUBARU, Nissan, and Mazda all disappointed the street with operating profit falling off the cliff, down 51.8%, 28.8% and 17.2% respectively. </p><div class="content-highlight">
<p>We have all reason to believe that the migration from passenger car segment to the crossover one will continue unabated for the foreseeable future and with the competition in crossover segment intensifying, we expect the trend of diverting operating profit growth to continue for the rest of FY18. </p>
<p>There is a risk that the top line growth of Asian businesses could slow down, but this would be rather a result of capacity constraints than lower underlying demand.</p>
</div><h2>1QFY18: Japanese automotive industry Operating Profit YoY Change</h2><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/062/252/original/1QFY18%20Growth.PNG?1535678645" class="editor-image img-responsive" data-smartkarma-image-id="62252"></figure><div class="content-caption">Source: Company data</div>

Japanese automotive industry saw only a marginal, but still better than expected operating profit growth in 1QFY18.  Industrywide operating profit grew only by 5.5% YoY as among other negative factors, FX, rising raw material prices and severe competition in US markets took its toll.Remarkably, there is a strong disparity in profit growth when looking at each companies respective market focus. A focus on Asian markets or what we call “Asia focused school” seemed to have paid off with significantly higher profit growth than a focus on major markets or what we call “Mega market school”. Asia focused names like Suzuki or MMC reported a 30% higher profit growth on the back of a strong volume rise and product mix improvements in Asia.It was a moderately negative surprise to us that Asian focused Yamaha motor`s results overall disappointed as their operations in mega markets performed worse than expected.      What major markets focused names are concerned, SUBARU, Nissan, and Mazda all disappointed the street with operating profit falling off the cliff, down 51.8%, 28.8% and 17.2% respectively. 
We have all reason to believe that the migration from passenger car segment to the crossover one will continue unabated for the foreseeable future and with the competition in crossover segment intensifying, we expect the trend of diverting operating profit growth to continue for the rest of FY18. 
There is a risk that the top line growth of Asian businesses could slow down, but this would be rather a result of capacity constraints than lower underlying demand.
1QFY18: Japanese automotive industry Operating Profit YoY ChangeSource: Company data

What Did We Learn from 1QFY18 Reporting Season of the Japanese Automotive Sector?

<div class="content-highlight"><p>Some media outlets reported that the White House considers introducing a 25% tariff on vehicles imported to the US. The sudden appearance of a Damocles sword hanging over their heads hit the Japanese automotive names hard today.<br><br>We were worried about a “rearrangement” of the competitive landscape in what such a tariff would likely result when we published the insight <a href="https://www.smartkarma.com/insights/does-the-japanese-auto-industry-has-a-home-market-or-is-it-homeless" target="_blank">Does the Japanese Auto Industry Have a Home Market or Is It Homeless?</a></p></div><p>Albeit being a substantive threat to margins and profitability…</p>

Some media outlets reported that the White House considers introducing a 25% tariff on vehicles imported to the US. The sudden appearance of a Damocles sword hanging over their heads hit the Japanese automotive names hard today.  We were worried about a “rearrangement” of the competitive landscape in what such a tariff would likely result when we published the insight Does the Japanese Auto Industry Have a Home Market or Is It Homeless?Albeit being a substantive threat to margins and profitability…

Handicap Japan: The Cost of Being the Road Team

Japan

Yamaha Motor Co., Ltd. manufactures motorcycles.  The Company also produces motor vehicle engines for Toyota Motor Corp. and Ford Motor Co.  Yamaha Motor's specialty products include motor boats, snowmobiles, golf carts, and electric power generators.  Yamaha Motor sells products in Japan, North America, Europe, Asia, and South America.

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Yamaha Motor (7272 JP)

India Autos | Auto Tracker for August - YoY Volume Recovery

This insight is a sequel to our monthly auto tracker insights. It covers the performance of the auto sector in India for the month of August,...

Pranav Bhavsar

🇯🇵 JAPAN • Results & Revisions 28th May - Nissan, Nikon & Toray

LIMPING HOME - 42 companies reported results on Thursday of which 32 were for the full-year. Of these, 38% made FY2021 forecasts of which only...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 12th February ▲9449 6273 7309 ▼ 3769 6367 4324

12TH FEBRUARY ROUNDUP - 272 results and 122 revisions announcements were made yesterday. Our Results Score declined by another 18 basis points to...

Campbell Gunn

What Did We Learn from 1QFY18 Reporting Season of the Japanese Automotive Sector?

Japanese automotive industry saw only a marginal, but still better than expected operating profit growth in 1QFY18.Industrywide operating profit...

Noriaki Hirakata, CFA

Handicap Japan: The Cost of Being the Road Team

Some media outlets reported that the White House considers introducing a 25% tariff on vehicles imported to the US. The sudden appearance of a...

Noriaki Hirakata, CFA

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