Japan Specialist

Mark Chadwick

Over 20 years experience in equities and asset management in Asia and Japan. Qualified CFA with experience analyzing companies as a buy-side analyst. In-depth knowledge of company fundamental analysis, corporate governance and valuations.

Kyushu Railway - An Olive Branch to Fir Tree

Equity Bottom-Up

Since <a href="https://www.smartkarma.com/entities/kyushu-railway-company" target="_blank" data-smartkarma-citation="entities:23609:1" rel="noopener">Kyushu Railway Company (9142 JP)</a> AGM on June 23, the stock has declined by 24%. To put that in perspective the more operationally challenged Japan Airlines stock price has declined by just 14%. Both companies face similar challenges from Covid-19 and concerns over the pace of any recovery. In the ‘peak virus’ quarter ended June, JAL recorded a 78% collapse in revenue and a negative 172% EBIT margin, while Kyushu Rail reported a 38% revenue decline and a mere negative 80% EBIT margin. 
So why did Kyushu Railway underperform?

Since Kyushu Railway Company (9142 JP) AGM on June 23, the stock has declined by 24%. To put that in perspective the more operationally challenged Japan Airlines stock price has declined by just 14%. Both companies face similar challenges from Covid-19 and concerns over the pace of any recovery. In the ‘peak virus’ quarter ended June, JAL recorded a 78% collapse in revenue and a negative 172% EBIT margin, while Kyushu Rail reported a 38% revenue decline and a mere negative 80% EBIT margin. 
So why did Kyushu Railway underperform? 

Kyushu Railway

JR Kyushu (9142) - Riding Out the Storm