'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)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/115/715/original/2020-01-31_05-07-06.png?1580414848" class="editor-image img-responsive" data-smartkarma-image-id="115715"></figure><div class="content-caption">Source • Japan Analytics</div>30TH JANUARY ROUNDUP - Thre were 194 results and 64 forecasts or revisions announcements yesterday. Of the 85 larger-cap companies reporting results, 18 saw year-on-year declines in their quarterly OP of greater than 25%, while 10 saw improvements of more than 25%. Our Results Sore tumbled 22bps to 0.77, the second-lowest Score in three years while the Forecast/Revision Score lost almost all of yesterday's gain and is 9bps away from a three-year low.

Source • Japan Analytics30TH JANUARY ROUNDUP - Thre were 194 results and 64 forecasts or revisions announcements yesterday. Of the 85 larger-cap companies reporting results, 18 saw year-on-year declines in their quarterly OP of greater than 25%, while 10 saw improvements of more than 25%. Our Results Sore tumbled 22bps to 0.77, the second-lowest Score in three years while the Forecast/Revision Score lost almost all of yesterday's gain and is 9bps away from a three-year low.

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 30th January ▲ 8316•6702•8604 ▼ 6770•9064•4661

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. 

A <a href="https://www.smartkarma.com/entities/familymart-co-ltd" target="_blank" data-smartkarma-citation="entities:320:1" rel="noopener">Familymart (8028 JP)</a> store installed the first set of Amazon Hub Locker delivery lockers in September. <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a> will roll out its new lockers to other Familymarts, supermarkets and some railway stations in Tokyo in the coming months.The growing level of competition between Amazon and Seven Eleven and, to some extent, <a href="https://www.smartkarma.com/entities/yamato-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2:1" rel="noopener">Yamato Holdings (9064 JP)</a>, should lead to a rapid roll out of lockers from multiple providers.

A Familymart (8028 JP) store installed the first set of Amazon Hub Locker delivery lockers in September. Amazon.com Inc (AMZN US) will roll out its new lockers to other Familymarts, supermarkets and some railway stations in Tokyo in the coming months.The growing level of competition between Amazon and Seven Eleven and, to some extent, Yamato Holdings (9064 JP), should lead to a rapid roll out of lockers from multiple providers.

Familymart Installs First Amazon Delivery Lockers

TATTERED - After rising 1.6% in four days at the start of the week before last, our Market Composite then fell by 3%, ended the period down 1.3% and only 1% above the one-year 'low' of March 23rd 2018. Japanese equities are currently trading on a trailing-twelve-month (TTM) earnings multiple of just 13.9x - a three-year low. Of the factors driving prices lower, we highlight 'Trust' and 'Trade' and focus on <a href="https://www.smartkarma.com/entities/23714" target="_blank" data-smartkarma-citation="entities:23714:1">Tateru (1435)</a> and <a href="https://www.smartkarma.com/entities/6267" target="_blank" data-smartkarma-citation="entities:6267:1">Suruga Bank (8358)</a> concerning the former.OUTLOOK - The rally we envisaged based on recent volume patterns lasted only for a week. The market is now overdue a bounce, at least in terms of the five-day relative strength index. Further, seasonality trends - <a href="https://www.smartkarma.com/insights/japan-seasonality-sell-in-july-and-say-goodbye-please-come-back-on-culture-day" target="_blank" data-smartkarma-citation="insights:23682">Japan: Seasonality - "Sell in July and Say Goodbye...Please Come Back on Culture Day"</a> - favour a rising equity market and weaker Yen into the end of the month, absent any adverse developments on the trade front.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/063/229/original/2018-09-08_21-25-10.png?1536481486" class="editor-image img-responsive" data-smartkarma-image-id="63229"></figure><div class="content-caption">Source: Japan Analytics</div>SECTOR RECOMMENDATIONS - Our sector recommendations have an implicit 3 'unit' market short by being overweight five sectors and underweight eight and have 'outperformed' by 2.3% over two weeks and by 12.3% over the last three months. COMPANIES - Our results and revision and stock performance reviews contain short comments on <a href="https://www.smartkarma.com/entities/3294" target="_blank" data-smartkarma-citation="entities:3294:1">Pigeon Corp (7956)</a> <a href="https://www.smartkarma.com/entities/4508" target="_blank" data-smartkarma-citation="entities:4508:1">Sekisui House (1928)</a> <a href="https://www.smartkarma.com/entities/11074" target="_blank" data-smartkarma-citation="entities:11074:1">Takara (2531)</a> <a href="https://www.smartkarma.com/entities/391" target="_blank" data-smartkarma-citation="entities:391:1">Sharp (6753)</a> <a href="https://www.smartkarma.com/entities/8467" target="_blank" data-smartkarma-citation="entities:8467:1">Workman (7564)</a> <a href="https://www.smartkarma.com/entities/9145" target="_blank" data-smartkarma-citation="entities:9145:1">Tokai Carbon (5301)</a> <a href="https://www.smartkarma.com/entities/237" target="_blank" data-smartkarma-citation="entities:237:1">Daiwa House (1925)</a> <a href="https://www.smartkarma.com/entities/4481" target="_blank" data-smartkarma-citation="entities:4481:1">Shin Etsu Chemical (4063)</a> <a href="https://www.smartkarma.com/entities/379" target="_blank" data-smartkarma-citation="entities:379:1">Sumco (3436)</a> <a href="https://www.smartkarma.com/entities/280" target="_blank" data-smartkarma-citation="entities:280:1">Tokyo Electron (8035)</a> <a href="https://www.smartkarma.com/entities/2" target="_blank" data-smartkarma-citation="entities:2:1">Yamato Holdings (9064)</a> and <a href="https://www.smartkarma.com/entities/22772" target="_blank" data-smartkarma-citation="entities:22772:1">LINE (3938)</a>.

TATTERED - After rising 1.6% in four days at the start of the week before last, our Market Composite then fell by 3%, ended the period down 1.3% and only 1% above the one-year 'low' of March 23rd 2018. Japanese equities are currently trading on a trailing-twelve-month (TTM) earnings multiple of just 13.9x - a three-year low. Of the factors driving prices lower, we highlight 'Trust' and 'Trade' and focus on Tateru (1435) and Suruga Bank (8358) concerning the former.OUTLOOK - The rally we envisaged based on recent volume patterns lasted only for a week. The market is now overdue a bounce, at least in terms of the five-day relative strength index. Further, seasonality trends - Japan: Seasonality - "Sell in July and Say Goodbye...Please Come Back on Culture Day" - favour a rising equity market and weaker Yen into the end of the month, absent any adverse developments on the trade front.Source: Japan AnalyticsSECTOR RECOMMENDATIONS - Our sector recommendations have an implicit 3 'unit' market short by being overweight five sectors and underweight eight and have 'outperformed' by 2.3% over two weeks and by 12.3% over the last three months. COMPANIES - Our results and revision and stock performance reviews contain short comments on Pigeon Corp (7956) Sekisui House (1928) Takara (2531) Sharp (6753) Workman (7564) Tokai Carbon (5301) Daiwa House (1925) Shin Etsu Chemical (4063) Sumco (3436) Tokyo Electron (8035) Yamato Holdings (9064) and LINE (3938).

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/061/034/original/2018-08-16_19-07-34.png?1534672507" class="editor-image img-responsive" data-smartkarma-image-id="61034"></figure><div class="content-caption">Source: Japan Analytics</div>A GOOD QUARTER - The Composite Results Score has now declined for seven months in a row and is implying a slowing of the upward momentum in earnings.  However, the score has only declined by 31 basis points since last quarter showing a degree of 'stability' seen only in 2011 in recent years.  The aggregate Forecast/Revision score has also continued to decline and is now lower for the fourth straight month. As would be expected, this score is a reliable leading indicator for the Results Score and suggests further weakening in the rate of earnings growth in the months ahead.  Neither score is, as yet, suggesting a decline in earnings before the end of the fiscal year.YEN CORRELATION WEAKENING - This quarter's earnings' stability was surprising given the relative strength of the Yen compared to a year ago. In the past and even as recently as 2016, a 5 per cent year-on-year decline has resulted in negative Results Scores. The year-on-year change in now positive so any negative impact will dissipate over the next two quarters.MARKET FOLLOWS MOMENTUM LOWER - The All Market Composite peaked on 23rd January and has since fallen by 11% despite a continuation of the Bank of Japan's ETF purchasing programme. Weakening earnings momentum and the overvaluation of many of the leading stocks, as in our '<a href="https://www.smartkarma.com/insights/japan-most-overbought-most-oversold-the-relative-price-score" target="_blank" data-smartkarma-citation="insights:21149">Nifty 50</a>' portfolio, have been contributing factors. With prospects for a much weaker Yen limited by the current trade negotiations between Japan and the United States, and with global growth slowing, we expect both Results and Revision Scores to trend lower, but to end the fiscal year in positive territory. Historically, the market has not risen during periods when both the Results and Forecast/Revision Scores have been trending down.<div class="content-highlight">MARKET RECOMMENDATION - Within a global portfolio, we would market-weight Japanese equities with a bias towards domestic sectors and not hedge the currency exposure.</div>SECTOR RESULTS SCORES -The good news is that only one sector, (Multi-Industry - 75% of which is <a href="https://www.smartkarma.com/entities/359" target="_blank" data-smartkarma-citation="entities:359:1">Japan Post [6178 JP</a>]) has a negative score - and its score is less negative than last quarter. Both the Media and Consumer Services sectors' scores turned positive and each increased by more than two points.  On the other hand, over half of our 29 sectors saw declining scores, although the number was lower than last quarter.  The top sectors in terms of quarter-on-quarter change were Energy, Consumer Services, Media, Information Technology and Other Commercial Products while the laggards were Non-Bank Finance, Chemicals, Construction, Machinery and Utilities. SECTOR REVISION SCORES - Five sectors have negative Forecast/Revision Scores with Utilities now joining Media, Multi-Industry, Autos and Banks from last quarter. The highest scores are in the Energy, Technology Hardware, Electrical Equipment, Retail and Information Technology sectors. Improvements of greater than one point were seen in Energy, Media and Machinery while Food, Beverages &amp; Tobacco, Chemicals, Utilities, Other Materials and Technology Hardware all lost more than one point. Overall eighteen sectors saw declines.REVISION V. RESULTS SCORES - The difference between the Results and Revision Scores is a good indicator of corporate expectations compared with the trailing-twelve-month reality. In some cases (e.g. Restaurants) the 'optimism' is due to a failure to revise forecasts in the light of weaker results. In others, such as Telecommunications, there is scope for upward revisions in the coming quarters.<div class="content-highlight">
THE OPTIMISTS
Restaurants • Other Materials • Electrical Equipment • Technology Hardware • Retail
THE PESSIMISTS
Banks • Autos • Telecommunications • Utilities • Media • Chemicals
</div>SECTOR PERFORMANCE - Over the last three months, our Japan Market Composite declined by 5.8%. Only four sectors saw an increase in value led by Telecommunications, Energy, Commercial Services and Information Technology. The largest declines were in the Building Materials, Metals, Real Estate Construction and Machinery sectors. Nine sectors are now negative over one year led by Building Materials, Metals and Food, Beverages &amp; Tobacco and only eight are up in double-digits led by Services and Information Technology. For the time being, Domestic Non-Manufacturing sectors 'rules the roost' and Domestic Cyclical sectors have taken over from Global Cyclicals in the 'doghouse'.'.<div class="content-highlight">
SECTOR RECOMMENDATIONS
Our most-preferred sectors are currently Energy, Healthcare, Telecommunications, Other Commercial Products and Information Technology.
Least-preferred sectors are Metals, Chemicals, Machinery, Autos, Construction, Real Estate, Building Materials, Food Beverages &amp; Tobacco and Utilities.
</div>TOP 5 LARGER PEER GROUPS - The top five Peer Groups capitalised at over ¥1 trillion are Machine Tools &amp; Presses, PC &amp; Computer Peripherals, Oil &amp; Gas Refining &amp; Marketing, Telecom Distribution Services and Sporting &amp; Outdoor Goods. The top twenty larger Peer Groups have gained 16% over one year but have declined by 4% on average the last three months.BOTTOM 5 LARGER PEER GROUPS - The bottom five Peer Groups capitalised at over ¥1 trillion are Audio/Visual Content, LCD/LED Materials &amp; Equipment, Electrical Engineering, General Contractors and Real Estate - Leasing. The bottom twenty larger Peer Groups have lost 2% over one year and 9% over the last three months. Only Security Services and Tobacco have risen since May.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/061/038/original/2018-08-19_19-33-03.png?1534674804" class="editor-image img-responsive" data-smartkarma-image-id="61038"></figure>

Source: Japan AnalyticsA GOOD QUARTER - The Composite Results Score has now declined for seven months in a row and is implying a slowing of the upward momentum in earnings.  However, the score has only declined by 31 basis points since last quarter showing a degree of 'stability' seen only in 2011 in recent years.  The aggregate Forecast/Revision score has also continued to decline and is now lower for the fourth straight month. As would be expected, this score is a reliable leading indicator for the Results Score and suggests further weakening in the rate of earnings growth in the months ahead.  Neither score is, as yet, suggesting a decline in earnings before the end of the fiscal year.YEN CORRELATION WEAKENING - This quarter's earnings' stability was surprising given the relative strength of the Yen compared to a year ago. In the past and even as recently as 2016, a 5 per cent year-on-year decline has resulted in negative Results Scores. The year-on-year change in now positive so any negative impact will dissipate over the next two quarters.MARKET FOLLOWS MOMENTUM LOWER - The All Market Composite peaked on 23rd January and has since fallen by 11% despite a continuation of the Bank of Japan's ETF purchasing programme. Weakening earnings momentum and the overvaluation of many of the leading stocks, as in our 'Nifty 50' portfolio, have been contributing factors. With prospects for a much weaker Yen limited by the current trade negotiations between Japan and the United States, and with global growth slowing, we expect both Results and Revision Scores to trend lower, but to end the fiscal year in positive territory. Historically, the market has not risen during periods when both the Results and Forecast/Revision Scores have been trending down.MARKET RECOMMENDATION - Within a global portfolio, we would market-weight Japanese equities with a bias towards domestic sectors and not hedge the currency exposure.SECTOR RESULTS SCORES -The good news is that only one sector, (Multi-Industry - 75% of which is Japan Post [6178 JP]) has a negative score - and its score is less negative than last quarter. Both the Media and Consumer Services sectors' scores turned positive and each increased by more than two points.  On the other hand, over half of our 29 sectors saw declining scores, although the number was lower than last quarter.  The top sectors in terms of quarter-on-quarter change were Energy, Consumer Services, Media, Information Technology and Other Commercial Products while the laggards were Non-Bank Finance, Chemicals, Construction, Machinery and Utilities. SECTOR REVISION SCORES - Five sectors have negative Forecast/Revision Scores with Utilities now joining Media, Multi-Industry, Autos and Banks from last quarter. The highest scores are in the Energy, Technology Hardware, Electrical Equipment, Retail and Information Technology sectors. Improvements of greater than one point were seen in Energy, Media and Machinery while Food, Beverages &amp; Tobacco, Chemicals, Utilities, Other Materials and Technology Hardware all lost more than one point. Overall eighteen sectors saw declines.REVISION V. RESULTS SCORES - The difference between the Results and Revision Scores is a good indicator of corporate expectations compared with the trailing-twelve-month reality. In some cases (e.g. Restaurants) the 'optimism' is due to a failure to revise forecasts in the light of weaker results. In others, such as Telecommunications, there is scope for upward revisions in the coming quarters.
THE OPTIMISTS
Restaurants • Other Materials • Electrical Equipment • Technology Hardware • Retail
THE PESSIMISTS
Banks • Autos • Telecommunications • Utilities • Media • Chemicals
SECTOR PERFORMANCE - Over the last three months, our Japan Market Composite declined by 5.8%. Only four sectors saw an increase in value led by Telecommunications, Energy, Commercial Services and Information Technology. The largest declines were in the Building Materials, Metals, Real Estate Construction and Machinery sectors. Nine sectors are now negative over one year led by Building Materials, Metals and Food, Beverages &amp; Tobacco and only eight are up in double-digits led by Services and Information Technology. For the time being, Domestic Non-Manufacturing sectors 'rules the roost' and Domestic Cyclical sectors have taken over from Global Cyclicals in the 'doghouse'.'.
SECTOR RECOMMENDATIONS
Our most-preferred sectors are currently Energy, Healthcare, Telecommunications, Other Commercial Products and Information Technology.
Least-preferred sectors are Metals, Chemicals, Machinery, Autos, Construction, Real Estate, Building Materials, Food Beverages &amp; Tobacco and Utilities.
TOP 5 LARGER PEER GROUPS - The top five Peer Groups capitalised at over ¥1 trillion are Machine Tools &amp; Presses, PC &amp; Computer Peripherals, Oil &amp; Gas Refining &amp; Marketing, Telecom Distribution Services and Sporting &amp; Outdoor Goods. The top twenty larger Peer Groups have gained 16% over one year but have declined by 4% on average the last three months.BOTTOM 5 LARGER PEER GROUPS - The bottom five Peer Groups capitalised at over ¥1 trillion are Audio/Visual Content, LCD/LED Materials &amp; Equipment, Electrical Engineering, General Contractors and Real Estate - Leasing. The bottom twenty larger Peer Groups have lost 2% over one year and 9% over the last three months. Only Security Services and Tobacco have risen since May.

Japan: Results & Revision Scores Summer 2018 Update - Market Composite, Sectors & Peer Groups

INTERNET, TELECOMS &amp; HEALTHCARE ▲ RETAIL, RESTAURANTS &amp; RAILWAYS▼- Domestic non-financial sectors continue to shine in Japan. However, in the last two weeks, there has been a marked shift away from lower-margin domestic sectors that are now seeing rising fixed and variable costs (Restaurants, Transportation, Media, Retail and Food) towards higher-margin sectors such as Telecommunications, Internet, Healthcare and Information Technology.  The weaker Yen has helped reduce the negative momentum in…

INTERNET, TELECOMS &amp; HEALTHCARE ▲ RETAIL, RESTAURANTS &amp; RAILWAYS▼- Domestic non-financial sectors continue to shine in Japan. However, in the last two weeks, there has been a marked shift away from lower-margin domestic sectors that are now seeing rising fixed and variable costs (Restaurants, Transportation, Media, Retail and Food) towards higher-margin sectors such as Telecommunications, Internet, Healthcare and Information Technology.  The weaker Yen has helped reduce the negative momentum in…

Japan: Sector Weight 3 Month Change - Bi-Polar With A Twist

Japan

Yamato Holdings Co., Ltd. mainly provides door-to-door parcel delivery services. The Company has developed a nationwide delivery system specializing in time-specified delivery. Yamato Holdings offers moving services and other comprehensive transportation services including logistics services for both domestic and overseas customers as well as financial and autoworks services.

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Yamato Holdings (9064 JP)

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 30th January ▲ 8316•6702•8604 ▼ 6770•9064•4661

30TH JANUARY ROUNDUP - Thre were 194 results and 64 forecasts or revisions announcements yesterday. Of the 85 larger-cap companies reporting...

Campbell Gunn

Familymart Installs First Amazon Delivery Lockers

A Familymart (8028 JP) store installed the first set of Amazon Hub Locker delivery lockers in September. Amazon.com Inc (AMZN US) will roll out its...

Michael Causton

Japan Fortnightly Update: Tattered

TATTERED - After rising 1.6% in four days at the start of the week before last, our Market Composite then fell by 3%, ended the period down 1.3%...

Campbell Gunn

Japan: Results & Revision Scores Summer 2018 Update - Market Composite, Sectors & Peer Groups

A GOOD QUARTER - The Composite Results Score has now declined for seven months in a row and is implying a slowing of the upward momentum in...

Campbell Gunn

Japan: Sector Weight 3 Month Change - Bi-Polar With A Twist

INTERNET, TELECOMS & HEALTHCARE ▲ RETAIL, RESTAURANTS & RAILWAYS▼- Domestic non-financial sectors continue to shine in Japan. However, in...

Campbell Gunn

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