'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)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/134/507/original/2020-05-20_06-42-32.png?1589924596" class="editor-image img-responsive" data-smartkarma-image-id="134507"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>STRAGGLERS</strong> - As we wind down this series of Insights, the 'gap' between our proxies for earnings and Total Market Cap is now the largest in fifteen years, courtesy of central bank liquidity injections. Our lagging Results Score has yet to breach the 2016 'low', a creditable outcome but will do so by August. We still await annual results for 'stragglers' <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit (6098 JP)</a>, <a href="https://www.smartkarma.com/entities/tokio-marine-holdings-inc" target="_blank" data-smartkarma-citation="entities:7591:1" rel="noopener">Tokio Marine (8766 JP)</a>, <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan Motor (7201 JP)</a>, <a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" data-smartkarma-citation="entities:7797:1" rel="noopener">Hitachi (6501 JP)</a>, <a href="https://www.smartkarma.com/entities/fujifilm-holdings-corp" target="_blank" data-smartkarma-citation="entities:16353:1" rel="noopener">Fujifilm (4901 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba (6502 JP)</a>, and <a href="https://www.smartkarma.com/entities/hikari-tsushin-inc" target="_blank" data-smartkarma-citation="entities:4909:1" rel="noopener">Hikari Tsushin (9435 JP)</a>. </p><div><p>in the <strong>DETAIL</strong> below, we shall review Monday's updates:-</p></div><div><ul>
<li>The balance between positive/neutral/negative of the 51 results announcements was 21:3:27. The average change in Results Score was -1.1.</li>
<li>For the 24 revisions/initial forecasts, the split was 8:1:15, and the average Forecast/Revision Score was -5.4. Again less than 50% of companies reporting full-year results chose to make current year forecasts.</li>
</ul></div>

Source • Japan AnalyticsSTRAGGLERS - As we wind down this series of Insights, the 'gap' between our proxies for earnings and Total Market Cap is now the largest in fifteen years, courtesy of central bank liquidity injections. Our lagging Results Score has yet to breach the 2016 'low', a creditable outcome but will do so by August. We still await annual results for 'stragglers' Recruit (6098 JP), Tokio Marine (8766 JP), Nissan Motor (7201 JP), Hitachi (6501 JP), Fujifilm (4901 JP), Toshiba (6502 JP), and Hikari Tsushin (9435 JP). in the DETAIL below, we shall review Monday's updates:-
The balance between positive/neutral/negative of the 51 results announcements was 21:3:27. The average change in Results Score was -1.1.
For the 24 revisions/initial forecasts, the split was 8:1:15, and the average Forecast/Revision Score was -5.4. Again less than 50% of companies reporting full-year results chose to make current year forecasts.


🇯🇵 JAPAN • Results & Revisions 19th May - SEI, Kotobuki Spirits, Autobacs Seven

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/yeahka-limited" target="_blank" data-smartkarma-citation="entities:28436:1" rel="noopener">Yeahka Limited (1781144D CH)</a> is leading payment-based technology platform in China. Yeahka is backed by investors such as <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> (4.98% shareholder), Greycroft Growth (4.48%) and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> (3.93%). It has filed its PHIP and pre-marketing an HK IPO to raise around $250 million, according to press reports. </p><div class="content-highlight"><p>Like several businesses, Yeahka reported a strong 2019 which was offset by a 1Q20 ravaged by the corona-crisis. However, the impact of the corona-crisis is anticipated to be temporary. We believe that the corona-crisis will not permanently alter the rapid growth trajectory of the payment service industry in China. In <a href="https://www.smartkarma.com/insights/yeahka-ipo-initiation-cashing-in" target="_blank" rel="noopener">our initiation note</a>, we stated that peeling back the benefit of market growth, Yeahka’s fundamentals offer more positives than negatives. The 2019 results, continues to reinforce our view and believe Yeahka is worth a look.  </p></div>

Yeahka Limited (1781144D CH) is leading payment-based technology platform in China. Yeahka is backed by investors such as Recruit Holdings (6098 JP) (4.98% shareholder), Greycroft Growth (4.48%) and Tencent Holdings (700 HK) (3.93%). It has filed its PHIP and pre-marketing an HK IPO to raise around $250 million, according to press reports. Like several businesses, Yeahka reported a strong 2019 which was offset by a 1Q20 ravaged by the corona-crisis. However, the impact of the corona-crisis is anticipated to be temporary. We believe that the corona-crisis will not permanently alter the rapid growth trajectory of the payment service industry in China. In our initiation note, we stated that peeling back the benefit of market growth, Yeahka’s fundamentals offer more positives than negatives. The 2019 results, continues to reinforce our view and believe Yeahka is worth a look.  

Equity Analyst, LightStream Research

Supun Walpola

Equity Analyst

Equity Bottom-Up

<p>A slowdown in the HR Technology business, which operates two popular employment websites, indeed.com (Indeed) and glassdoor.com (Glassdoor), is one of many risks for <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> (Recruit) that we have highlighted in our previous notes.</p><p>Our traffic analysis of Indeed and Glassdoor suggests that HR Technology business revenue growth would be around c.17%-22% YoY in 4Q FY03/20. This is lower than 28.7% YoY last quarter and an average of 53.7% YoY over the past 10 quarters.</p>

A slowdown in the HR Technology business, which operates two popular employment websites, indeed.com (Indeed) and glassdoor.com (Glassdoor), is one of many risks for Recruit Holdings (6098 JP) (Recruit) that we have highlighted in our previous notes.Our traffic analysis of Indeed and Glassdoor suggests that HR Technology business revenue growth would be around c.17%-22% YoY in 4Q FY03/20. This is lower than 28.7% YoY last quarter and an average of 53.7% YoY over the past 10 quarters.

Recruit Holdings [Alternative Data]: Indeed Is Flat Even Before COVID-19 Hits

<ul>
<li>Last week, The Nikkei reported that <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> (Recruit) is seeking credit lines worth a total of JPY450bn (or $4.15bn) from Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group to compensate contract workers laid off by clients hit by COVID-19. </li>
<li>Recruit is yet to comment on this. However, if the impact of lower staffing activity due to COVID-19 would have been bad on Recruit, the compensations would only make the situation worse for the company, whose share price has come down by more than 40% since we last wrote about the company in <a href="https://www.smartkarma.com/insights/recruit-holdings-3q-update-risks-have-started-to-materialise" target="_blank" data-smartkarma-citation="insights:36707" rel="noopener">Recruit Holdings 3Q Update: Risks Have Started to Materialise</a> </li>
</ul>


Last week, The Nikkei reported that Recruit Holdings (6098 JP) (Recruit) is seeking credit lines worth a total of JPY450bn (or $4.15bn) from Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group to compensate contract workers laid off by clients hit by COVID-19. 
Recruit is yet to comment on this. However, if the impact of lower staffing activity due to COVID-19 would have been bad on Recruit, the compensations would only make the situation worse for the company, whose share price has come down by more than 40% since we last wrote about the company in Recruit Holdings 3Q Update: Risks Have Started to Materialise 


Recruit Holdings: Worker Compensations Could Worsen Recruit’s Woes

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Event-Driven

<p>On Thursday we highlighted a number of stock pairs that had seen extreme levels of relative performance dislocations, speculating that this was due to relative value unwinds that were being rushed for completion prior to the long weekend. This morning the skews are reversing and with Nikkei now outperforming Topix (+02.7% vs. -0.87% at the time of this writing) we believe this opportunity is being realised quickly. Our thoughts on next steps below.</p>

On Thursday we highlighted a number of stock pairs that had seen extreme levels of relative performance dislocations, speculating that this was due to relative value unwinds that were being rushed for completion prior to the long weekend. This morning the skews are reversing and with Nikkei now outperforming Topix (+02.7% vs. -0.87% at the time of this writing) we believe this opportunity is being realised quickly. Our thoughts on next steps below.

Japan Long Weekend Portfolio Blowout Theme Is Working Quickly

Japan

Recruit Holdings Co. Ltd. operates information providing services in human resource, housing, bridal, travel, restaurants, beauty, automobiles, and education and more. The company also operate staffing services and advertising business.

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Recruit Holdings (6098 JP)

🇯🇵 JAPAN • Results & Revisions 19th May - SEI, Kotobuki Spirits, Autobacs Seven

STRAGGLERS - As we wind down this series of Insights, the 'gap' between our proxies for earnings and Total Market Cap is now the largest in fifteen...

Campbell Gunn

Yeahka IPO: Way to Pay

Yeahka Limited (1781144D CH) is leading payment-based technology platform in China. Yeahka is backed by investors such as Recruit Holdings (6098...

Arun George

Recruit Holdings [Alternative Data]: Indeed Is Flat Even Before COVID-19 Hits

A slowdown in the HR Technology business, which operates two popular employment websites, indeed.com (Indeed) and glassdoor.com (Glassdoor), is one...

Supun Walpola

Recruit Holdings: Worker Compensations Could Worsen Recruit’s Woes

Last week, The Nikkei reported that Recruit Holdings (6098 JP) (Recruit) is seeking credit lines worth a total of JPY450bn (or $4.15bn) from...

Supun Walpola

Japan Long Weekend Portfolio Blowout Theme Is Working Quickly

On Thursday we highlighted a number of stock pairs that had seen extreme levels of relative performance dislocations, speculating that this was due...

Mio Kato

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