'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

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>Today after the close, <a href="https://www.smartkarma.com/entities/ricoh-co-ltd" target="_blank" data-smartkarma-citation="entities:15359:1" rel="noopener">Ricoh Co Ltd (7752 JP)</a> is expected to announce its full-year results. </p><p>I do not normally repeat myself before an announcement, but here I have decided I need to pound the table a little harder. So I am reiterating my suggestion that the with or shortly after the results announcement will come the likely near-term announcement of the <em>next</em> Mid-Term Plan, and the announcement for how Ricoh will execute the ¥100bn capital return to shareholders from the last Mid-Term Plan results.</p><p>For the background, please read <a href="https://www.smartkarma.com/insights/ricoh-s-big-buyback-potential-the-timing-is-right" target="_blank" data-smartkarma-citation="insights:38518" rel="noopener">Ricoh's BIG Buyback Potential - The Timing Is Right</a>. </p><p>Given that the Board has already approved the ¥100bn capital return, and that return is almost 20% of current market cap and would be 25% of float, and close to one-third of <em>Real World Float, <strong>investors should not ignore the likely impact here. </strong></em></p>

Today after the close, Ricoh Co Ltd (7752 JP) is expected to announce its full-year results. I do not normally repeat myself before an announcement, but here I have decided I need to pound the table a little harder. So I am reiterating my suggestion that the with or shortly after the results announcement will come the likely near-term announcement of the next Mid-Term Plan, and the announcement for how Ricoh will execute the ¥100bn capital return to shareholders from the last Mid-Term Plan results.For the background, please read Ricoh's BIG Buyback Potential - The Timing Is Right. Given that the Board has already approved the ¥100bn capital return, and that return is almost 20% of current market cap and would be 25% of float, and close to one-third of Real World Float, investors should not ignore the likely impact here. 

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/terumo-corp" target="_blank" data-smartkarma-citation="entities:6708:1" rel="noopener">Terumo Corp (4543 JP)</a> provides innovative medical solutions through its extensive business portfolio which ranges from vascular intervention and cardio-surgical solutions, blood transfusion and cell therapy technology and other medical products essential for daily clinical practice.</li>
<li>It was reported by several news media outlets that Terumo’s blood purification and oxygenation system has been approved by the US FDA to treat patients with COVID-19.</li>
<li>Nikkei also reported that the Japanese government has decided to provide subsidies to companies that increase production of these heart-lung machines used to treat severe pneumonia in coronavirus infected patients.</li>
<li>In this insight, we discuss the company’s ECMO business alongside its other business segments, outlook and the valuation of the company.</li>
<li>We expect the company’s largest business segment, Cardiac and Vascular to see strong growth over the next couple of years driven by steady growth in demand for cardiac and vascular products globally. At the same time, we expect Terumo’s continued launch of new products to further support the growth of the segment.</li>
<li>We expect Terumo’s other two businesses, Hospital and Blood Company to continue to perform steadily over the forecast period.</li>
</ul>



Terumo Corp (4543 JP) provides innovative medical solutions through its extensive business portfolio which ranges from vascular intervention and cardio-surgical solutions, blood transfusion and cell therapy technology and other medical products essential for daily clinical practice.
It was reported by several news media outlets that Terumo’s blood purification and oxygenation system has been approved by the US FDA to treat patients with COVID-19.
Nikkei also reported that the Japanese government has decided to provide subsidies to companies that increase production of these heart-lung machines used to treat severe pneumonia in coronavirus infected patients.
In this insight, we discuss the company’s ECMO business alongside its other business segments, outlook and the valuation of the company.
We expect the company’s largest business segment, Cardiac and Vascular to see strong growth over the next couple of years driven by steady growth in demand for cardiac and vascular products globally. At the same time, we expect Terumo’s continued launch of new products to further support the growth of the segment.
We expect Terumo’s other two businesses, Hospital and Blood Company to continue to perform steadily over the forecast period.


Terumo: Not Just an Opportune COVID Play but a Business with Solid Long-Term Prospects

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/454/original/2020-04-18_16-16-49.png?1587194226" class="editor-image img-responsive" data-smartkarma-image-id="128454"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>MARKING TIME</strong> - Japanse equities were becalmed last week, rising by 0.84%, while the Yen traded at 107 all week. The Bank of Japan bought ETFs on Wednesday and Thursday despite the relative calm and are on a path for April to equal the total purchases made in March. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/455/original/2020-04-18_17-43-44.png?1587199447" class="editor-image img-responsive" data-smartkarma-image-id="128455"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>MARKING MULTIPLES</strong> - As we have been covering in our daily Results &amp; Revisions updates, forward earnings continue to decline gradually. As previously noted, the market multiple will rise over the next month as full-year forecasts for FY2021 are announced to at least the early 2020 peak of 17.6 times. This adjustment process will be complicated by a lack of initial forecasts from many leading companies and by a delay in the publication of annual <em>yuho</em> audited financial statements until the late summer. 'Robust' analysis will be at a premium.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/651/original/File%202020-04-20%204%2023%2024.jpeg?1587324271" class="editor-image img-responsive" data-smartkarma-image-id="128651"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/652/original/File%202020-04-20%204%2024%2019.jpeg?1587324282" class="editor-image img-responsive" data-smartkarma-image-id="128652"></figure><p></p><div class="content-caption">Source • ourworldindata.org</div><p><strong>COVID CASE COUNT</strong> - Japan's COVID-19 daily case-count has trended down this week compared to the weel before and is now on a par with Sweden and Singapore. Daily fatalities are averaging double figures as this lagging statistics reflects the higher case count of two weeks ago and are still within the East Asian 'range' of 0-10 a day. New case counts of below 100 and a declining trend, as is the case in South Korea, Denmark and Austria will be required by the end of Golden Week on May 6th for Japan to consider any relaxation of its now nationwide 'state of emergency'. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/558/original/File%202020-04-19%2016%2028%2027.jpeg?1587281926" class="editor-image img-responsive" data-smartkarma-image-id="128558"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/559/original/File%202020-04-19%2016%2023%2014.jpeg?1587281952" class="editor-image img-responsive" data-smartkarma-image-id="128559"></figure><div class="content-caption">Source • ourworldindata.org</div><p><strong>JAPAN'S TESTING VACUUM</strong> - We have noted the lack of testing in Japan in an earlier <a href="https://www.smartkarma.com/insights/japan-market-update-hit-the-boj-bid-and-wait-for-the-absolute-value-opportunity" target="_blank" data-smartkarma-citation="insights:37670" rel="noopener">Insight</a> and the two charts above from Oxford's Global Change Data Lab highlights Japan's outlier status in this regard and the implications for confirmed case counts and confirmed deaths. This deficiency has led many data scientists to study excess mortality rates. At present, there is insufficient data from the Health Ministry in Japan to make any valid comparisons. Based on other countries, Japan's excess mortality will likely price to be slightly higher for the over 65s and lower for everyone else. In any case, a massive testing capability will form a key component of any viable exit strategy.     </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/479/original/File%202020-04-19%206%2024%2053.jpeg?1587245112" class="editor-image img-responsive" data-smartkarma-image-id="128479"></figure><div class="content-caption">Source • stopcovid19.jp</div><p><strong>OVERSHOOT</strong> - Unfortunately for patients and the government, hospitals are now full in many prefectures. Central Tokyo hospitals are turning away patients requiring ambulances to take patients to outlying parts of the prefecture - although this situation is not unusual in normal times. Despite ample time to prepare, the government has failed to provide for the 'overshoot' that they had been warning the public it was necessary to avoid. Japan also has a lower ratio of intensive care beds, (5) per 100,000 people, than many other developed countries. The previous policy of hospitalising every case, however mild, has been reversed and local governments have now requisitioned 210,000 hotel rooms to house those not in need of urgent medical intervention. While Japan's COVID-19 strategy has, so far, followed the less economically-damaging Swedish model (see below), a failure to address the hospital overshoot risks the country being forced to follow the UK's 'u-turn' into total lockdown from which exit strategies are much harder. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/650/original/2020-04-20_04-02-00.png?1587322973" class="editor-image img-responsive" data-smartkarma-image-id="128650"></figure><div class="content-caption">Source • Tokyo Metropolitan Government</div><p><strong>PEAKING OUT?</strong> On Sunday, Tokyo only 107 new cases, the lowest Sunday total for three weeks and the first decline. Tokyo now has over 3,000 cases out of a population of almost 14 million. The rate of doubling is now decelerating from one week to two weeks. Meanwhile, transit through major railway stations has declined by 70-80% across Japan. A lowering of new cases next week will be crucial to keep the hospitals from overflowing and the Prime Minister's reputation from falling further.</p><p><strong>FALLOUT</strong> - PM Abe's political capital is another casualty of this disease. It has emerged that his coalition partner the lay-Buddhist Komeito party threatened to walk out if the cash-for-all policy was not implemented requiring Abe to amend a previously-agreed budget bill much to the fury of the Ministry of Finance. The latter was able to require an application process as a means of limiting the amounts dispersed. However, in a bow to the changing circumstance, this process can be conducted online without, it seems, the need for in-person <em>hanko</em> certification. An additional complication is that Abe has 'fallen out' with his main bureaucratic 'fixer' and the main conduit with Komeito, Chief Cabinet Secretary Suga. Abe's poll ratings will probably never recover, and only his long-cherished desire to open the Tokyo Olympics in July 20121 will keep him in office. As will be true in many countries, the COVID-19 policy post mortems will be brutal and fatal for many previously Teflon-like political careers.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/486/original/File%202020-04-18%2013%2054%2022.jpeg?1587246944" class="editor-image img-responsive" data-smartkarma-image-id="128486"></figure><div class="content-caption">Source • Agoop</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/488/original/File%202020-04-18%2013%2053%2001.jpeg?1587247186" class="editor-image img-responsive" data-smartkarma-image-id="128488"></figure><div class="content-caption">Source • @shinagawajp &gt; Blue bars = COVID-19 cases by Tokyo Ward   Orange Line = Concentration of people at 11 pm</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/490/original/File%202020-04-18%2014%2000%2004.jpeg?1587247628" class="editor-image img-responsive" data-smartkarma-image-id="128490"></figure><div class="content-caption">Source • @shinagawajp &gt; Blue bars = COVID-19 cases by Tokyo Ward  Red Line = Population earning more than ¥15m a year</div><p><strong>HOTSPOTS &amp; FAT CATS</strong> - Some support for the government's policy of shutting down Tokyo's nightlife comes from data which correlates case count per Tokyo ward and population clusters in each area at 11 pm.  The correlation is much higher than both population levels and public transport transit through each ward. The second highest correlation was with income levels, suggesting that Tokyo' rich have a greater tendency to frequent bars, restaurants and other forms of evening entertainment, while no doubt considering themselves immune. This correlation has been anecdotally confirmed by the growing number of figures from the media and entertainment world who have contracted the disease and bears out the Tokyo Metropolitan Government's focus on avoiding the 3 'C's - <strong>C</strong>ongregations <strong>C</strong>onversing in <strong>C</strong>onfined spaces. The plug has been pulled on Tokyo's '<em>mizushobai'</em> or 'water trade'.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/663/original/File%202020-04-20%205%2020%2010.jpeg?1587327650" class="editor-image img-responsive" data-smartkarma-image-id="128663"></figure><div class="content-caption">Source • Johns Hopkins CSSE</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/478/original/2020-04-19_06-16-22.png?1587244624" class="editor-image img-responsive" data-smartkarma-image-id="128478"></figure><div class="content-caption">Source • LockdownTV</div><p><strong>PROF GIESECKE &amp; THE SWEDISH MODEL</strong> - Lastly, this <a href="https://youtu.be/bfN2JWifLCY" target="_blank" rel="noopener">video</a> of an interview with retired Swedish epidemiologist, Professor Johan Giesecke, provides an update on the policy options that governments have faced in their responses to COVID-19, the background to Sweden's policy and the difficulties of exiting from lockdown strategies. A summary of his talk is as follows:-</p><blockquote>
<p>Lockdown policies are not evidence-based</p>
<p>The correct policy is to protect the old and the frail only - this will eventually lead to herd immunity as a by-product - the initial UK response, which was similar to Sweden's was better  - before they made a 180 degree U-turn</p>
<p>The UK's Imperial College paper was not very good and he has never seen an unpublished paper have so much policy impact - the paper was  too pessimistic and any such models are a dubious basis for public policy</p>
<p>The flattening of the curve is due to the most vulnerable dying first as much as the lockdown policy</p>
<p>The outcomes will eventually be similar for all countries regardless of policy pursued</p>
<p>Covid-19 is a mild disease similar to the flu, and it was the novelty of the disease that scared people - the fatality rate of Covid-19 is the region of 0.1%</p>
<p>At least 50% of the population will be shown to have already had the disease when mass antibody testing becomes available - achieving 'herd immunity'</p>
</blockquote><p>In the <strong>DETAIL </strong>below, we shall explore some of the emerging themes for the post-COVID-19 world, review the results, revisions and initial forecast announcements made on Friday and, finally, look at our lists the Moving Average 'Outliers'.  The positive/neutral/negative balance for Friday's three results announcements was 1:0:2. For the 20 revisions/forecasts, the split was 7:1:12 - although two of the positive outcomes were securities brokers making initial 'forecasts' of a year-on-year return to profitability after the full-year results have been finalised. Peer Groups revising down included <strong>Advertising Services</strong>, <strong>Apparel &amp; Footwear</strong>, <strong>Retail-Apparel &amp; Footwear</strong>, <strong>Hotels &amp; Resorts</strong>, <strong>Employment &amp; Staffing</strong>, and<strong> Restaurants</strong>. Upward revisions were seen in<strong> Retail-Food &amp; Drink</strong>, <strong>Personal Products</strong>, and<strong> Public Relations</strong>.</p>

Source • Japan AnalyticsMARKING TIME - Japanse equities were becalmed last week, rising by 0.84%, while the Yen traded at 107 all week. The Bank of Japan bought ETFs on Wednesday and Thursday despite the relative calm and are on a path for April to equal the total purchases made in March. Source • Japan AnalyticsMARKING MULTIPLES - As we have been covering in our daily Results &amp; Revisions updates, forward earnings continue to decline gradually. As previously noted, the market multiple will rise over the next month as full-year forecasts for FY2021 are announced to at least the early 2020 peak of 17.6 times. This adjustment process will be complicated by a lack of initial forecasts from many leading companies and by a delay in the publication of annual yuho audited financial statements until the late summer. 'Robust' analysis will be at a premium.Source • ourworldindata.orgCOVID CASE COUNT - Japan's COVID-19 daily case-count has trended down this week compared to the weel before and is now on a par with Sweden and Singapore. Daily fatalities are averaging double figures as this lagging statistics reflects the higher case count of two weeks ago and are still within the East Asian 'range' of 0-10 a day. New case counts of below 100 and a declining trend, as is the case in South Korea, Denmark and Austria will be required by the end of Golden Week on May 6th for Japan to consider any relaxation of its now nationwide 'state of emergency'. Source • ourworldindata.orgJAPAN'S TESTING VACUUM - We have noted the lack of testing in Japan in an earlier Insight and the two charts above from Oxford's Global Change Data Lab highlights Japan's outlier status in this regard and the implications for confirmed case counts and confirmed deaths. This deficiency has led many data scientists to study excess mortality rates. At present, there is insufficient data from the Health Ministry in Japan to make any valid comparisons. Based on other countries, Japan's excess mortality will likely price to be slightly higher for the over 65s and lower for everyone else. In any case, a massive testing capability will form a key component of any viable exit strategy.     Source • stopcovid19.jpOVERSHOOT - Unfortunately for patients and the government, hospitals are now full in many prefectures. Central Tokyo hospitals are turning away patients requiring ambulances to take patients to outlying parts of the prefecture - although this situation is not unusual in normal times. Despite ample time to prepare, the government has failed to provide for the 'overshoot' that they had been warning the public it was necessary to avoid. Japan also has a lower ratio of intensive care beds, (5) per 100,000 people, than many other developed countries. The previous policy of hospitalising every case, however mild, has been reversed and local governments have now requisitioned 210,000 hotel rooms to house those not in need of urgent medical intervention. While Japan's COVID-19 strategy has, so far, followed the less economically-damaging Swedish model (see below), a failure to address the hospital overshoot risks the country being forced to follow the UK's 'u-turn' into total lockdown from which exit strategies are much harder. Source • Tokyo Metropolitan GovernmentPEAKING OUT? On Sunday, Tokyo only 107 new cases, the lowest Sunday total for three weeks and the first decline. Tokyo now has over 3,000 cases out of a population of almost 14 million. The rate of doubling is now decelerating from one week to two weeks. Meanwhile, transit through major railway stations has declined by 70-80% across Japan. A lowering of new cases next week will be crucial to keep the hospitals from overflowing and the Prime Minister's reputation from falling further.FALLOUT - PM Abe's political capital is another casualty of this disease. It has emerged that his coalition partner the lay-Buddhist Komeito party threatened to walk out if the cash-for-all policy was not implemented requiring Abe to amend a previously-agreed budget bill much to the fury of the Ministry of Finance. The latter was able to require an application process as a means of limiting the amounts dispersed. However, in a bow to the changing circumstance, this process can be conducted online without, it seems, the need for in-person hanko certification. An additional complication is that Abe has 'fallen out' with his main bureaucratic 'fixer' and the main conduit with Komeito, Chief Cabinet Secretary Suga. Abe's poll ratings will probably never recover, and only his long-cherished desire to open the Tokyo Olympics in July 20121 will keep him in office. As will be true in many countries, the COVID-19 policy post mortems will be brutal and fatal for many previously Teflon-like political careers.Source • AgoopSource • @shinagawajp &gt; Blue bars = COVID-19 cases by Tokyo Ward   Orange Line = Concentration of people at 11 pmSource • @shinagawajp &gt; Blue bars = COVID-19 cases by Tokyo Ward  Red Line = Population earning more than ¥15m a yearHOTSPOTS &amp; FAT CATS - Some support for the government's policy of shutting down Tokyo's nightlife comes from data which correlates case count per Tokyo ward and population clusters in each area at 11 pm.  The correlation is much higher than both population levels and public transport transit through each ward. The second highest correlation was with income levels, suggesting that Tokyo' rich have a greater tendency to frequent bars, restaurants and other forms of evening entertainment, while no doubt considering themselves immune. This correlation has been anecdotally confirmed by the growing number of figures from the media and entertainment world who have contracted the disease and bears out the Tokyo Metropolitan Government's focus on avoiding the 3 'C's - Congregations Conversing in Confined spaces. The plug has been pulled on Tokyo's 'mizushobai' or 'water trade'.Source • Johns Hopkins CSSESource • LockdownTVPROF GIESECKE &amp; THE SWEDISH MODEL - Lastly, this video of an interview with retired Swedish epidemiologist, Professor Johan Giesecke, provides an update on the policy options that governments have faced in their responses to COVID-19, the background to Sweden's policy and the difficulties of exiting from lockdown strategies. A summary of his talk is as follows:-
Lockdown policies are not evidence-based
The correct policy is to protect the old and the frail only - this will eventually lead to herd immunity as a by-product - the initial UK response, which was similar to Sweden's was better  - before they made a 180 degree U-turn
The UK's Imperial College paper was not very good and he has never seen an unpublished paper have so much policy impact - the paper was  too pessimistic and any such models are a dubious basis for public policy
The flattening of the curve is due to the most vulnerable dying first as much as the lockdown policy
The outcomes will eventually be similar for all countries regardless of policy pursued
Covid-19 is a mild disease similar to the flu, and it was the novelty of the disease that scared people - the fatality rate of Covid-19 is the region of 0.1%
At least 50% of the population will be shown to have already had the disease when mass antibody testing becomes available - achieving 'herd immunity'
In the DETAIL below, we shall explore some of the emerging themes for the post-COVID-19 world, review the results, revisions and initial forecast announcements made on Friday and, finally, look at our lists the Moving Average 'Outliers'.  The positive/neutral/negative balance for Friday's three results announcements was 1:0:2. For the 20 revisions/forecasts, the split was 7:1:12 - although two of the positive outcomes were securities brokers making initial 'forecasts' of a year-on-year return to profitability after the full-year results have been finalised. Peer Groups revising down included Advertising Services, Apparel &amp; Footwear, Retail-Apparel &amp; Footwear, Hotels &amp; Resorts, Employment &amp; Staffing, and Restaurants. Upward revisions were seen in Retail-Food &amp; Drink, Personal Products, and Public Relations.

🇯🇵 JAPAN MARKET (& COVID-19) UPDATE 19th April - Overshoot

<p>On the 27th of March, <a href="https://www.smartkarma.com/entities/ricoh-co-ltd" target="_blank" data-smartkarma-citation="entities:15359:1" rel="noopener">Ricoh Co Ltd (7752 JP)</a> held an <a href="https://www.ricoh.com/IR/events/investors_meeting" target="_blank" rel="noopener">Investors Meeting</a>. There was discussion of how the company had gone through the pain of realizing how they were in real trouble, and then made significant efforts to change that. U</p><p>In the last two Mid-Term Plans (MTPs), called "Resurgent" and "Ignite", the company led by CEO "Jake" Yamashita undertook structural reform to create cost savings of ¥100bn (mostly fixing the sales structure in the US, cutting out HQ costs and using RPA ("Robotic Process Automation") everywhere, and streamlining in-house production). They also started cutting businesses which weren't delivering (or had been delivering losses). They announced they would stop supporting fraud-hit Ricoh India in late 2017 (a case which finally got resolved in early 2019), and then took impairments on Ikon and Mindshift in 2018, deciding to sell their <em>long</em>-held position (tied to Ricoh's founder) in <a href="https://www.smartkarma.com/entities/coca-cola-bottlers-japan" target="_blank" data-smartkarma-citation="entities:20051:1" rel="noopener">Coca Cola Bottlers Japan (2579 JP)</a> that year to help them smooth out the large losses. In May 2018 they sold Ricoh Logistics. That seemed to get them "over the hump" as Yamashita-san said then, and the growth strategy outlined in mid-2018 concentrated on industrial commercial printing and more features in MFPs to create a better "digital services business."</p><p><strong>In March this year, they announced they were going to sell 20% of <a href="https://www.smartkarma.com/entities/ricoh-leasing-co-ltd" target="_blank" data-smartkarma-citation="entities:9144:1" rel="noopener">Ricoh Leasing (8566 JP)</a></strong>to <a href="https://www.smartkarma.com/entities/mizuho-leasing-co-ltd" target="_blank" data-smartkarma-citation="entities:12780:1" rel="noopener">Mizuho Leasing Co (8425 JP)</a>, which would allow them to de-consolidate Ricoh Leasing, which completely changes the optics of Ricoh's consolidated debt. </p><p><strong>The company also gave a preview of the next Mid-Term Plan for FY20-22 called "Lift Off" which should be announced next month </strong>(and which Yamashita-san had previously previewed 1 November 2019). That will involve a lot more digital services. The company may be under more pressure from its long-time large shareholder activist Effissimo Capital Management. Effissimo first went substantial by reporting an 8.61% position, meant for "pure investment purposes" in early September 2015. They lifted that position to above 10% then eventually to the high teens, and on 13 August 2019 noted that they had lifted their position slightly, to 18.99%, but importantly were changing the purpose of their investment to "making important recommendations to management." Effissimo has ~US$1.5bn invested in the company at ¥1120 on average against Friday's close of ¥734, much of the position on margin with lenders.</p><p>The stock hit a 4+yr high in February this year, finally catching up to TOPIX when compared to the relative lows in mid 2016 (the chart below is equalized in terms of percentage changes in price). Then in March and early April fell to a 7-year low. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/466/original/Screenshot%202020-04-18%20at%2010.24.37%20PM.png?1587219926" class="editor-image img-responsive" data-smartkarma-image-id="128466"></figure><div style="text-align: left;" class="content-caption">source: tradingview.com, Quiddity</div><p>More importantly, it fell sharply vs TOPIX and whereas TOPIX has bounced, Ricoh has hardly moved. </p><p>Investor Day had been scheduled for a while, so it wasn't any disappointment with that, and what should have been <em>Confirmation of Good News</em> seems to have been largely ignored. That is possibly an error by market observers.</p><h2>The Confirmation of Good News</h2><p>In the Investor Day 2019 presentation on 19 April 2019, there was a slide noting the goal of the future capital structure which included returning capital to shareholders to the tune of ¥100bn. It had been a goal of the MTP which runs until this year, but that was presented with enough vagueness to still seem aspirational. In this year's slide deck, the company presented the same slide from the 2019 slide deck, but with an additional slide presenting cashflow sources and uses. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/467/original/Screenshot%202020-04-18%20at%2010.44.27%20PM.png?1587221108" class="editor-image img-responsive" data-smartkarma-image-id="128467"></figure><div style="text-align: left;" class="content-caption">source: Ricoh Investor Day Presentation 27 March 2020</div><p>In that slide (shown below) it shows a section for shareholder returns, including the return of ¥100bn generated during the Mid-Term Plan to FY19. I am the last person to draw lines on a chart in a presentation and assume that they should be taken at presented relative sizes, but the Q&amp;A provided a little clarity on how one should think about that ¥100bn created to FY19.</p><p>The Mizuho Leasing purchase of the Ricoh Leasing stake is scheduled to close in the next week or two, and fiscal year earnings are scheduled for 8 May 2020.</p><div class="content-highlight">
<p>Given where the stock is now, ¥100bn of returns to shareholders from the last Mid-Term Plan looks juicy. It is 18.8% of market cap. And if one looks at how that might be implemented, the impact looks even more interesting. </p>
<p>It sometimes helps to think like a card counter. </p>
<p>More below.</p>
</div>

On the 27th of March, Ricoh Co Ltd (7752 JP) held an Investors Meeting. There was discussion of how the company had gone through the pain of realizing how they were in real trouble, and then made significant efforts to change that. UIn the last two Mid-Term Plans (MTPs), called "Resurgent" and "Ignite", the company led by CEO "Jake" Yamashita undertook structural reform to create cost savings of ¥100bn (mostly fixing the sales structure in the US, cutting out HQ costs and using RPA ("Robotic Process Automation") everywhere, and streamlining in-house production). They also started cutting businesses which weren't delivering (or had been delivering losses). They announced they would stop supporting fraud-hit Ricoh India in late 2017 (a case which finally got resolved in early 2019), and then took impairments on Ikon and Mindshift in 2018, deciding to sell their long-held position (tied to Ricoh's founder) in Coca Cola Bottlers Japan (2579 JP) that year to help them smooth out the large losses. In May 2018 they sold Ricoh Logistics. That seemed to get them "over the hump" as Yamashita-san said then, and the growth strategy outlined in mid-2018 concentrated on industrial commercial printing and more features in MFPs to create a better "digital services business."In March this year, they announced they were going to sell 20% of Ricoh Leasing (8566 JP)to Mizuho Leasing Co (8425 JP), which would allow them to de-consolidate Ricoh Leasing, which completely changes the optics of Ricoh's consolidated debt. The company also gave a preview of the next Mid-Term Plan for FY20-22 called "Lift Off" which should be announced next month (and which Yamashita-san had previously previewed 1 November 2019). That will involve a lot more digital services. The company may be under more pressure from its long-time large shareholder activist Effissimo Capital Management. Effissimo first went substantial by reporting an 8.61% position, meant for "pure investment purposes" in early September 2015. They lifted that position to above 10% then eventually to the high teens, and on 13 August 2019 noted that they had lifted their position slightly, to 18.99%, but importantly were changing the purpose of their investment to "making important recommendations to management." Effissimo has ~US$1.5bn invested in the company at ¥1120 on average against Friday's close of ¥734, much of the position on margin with lenders.The stock hit a 4+yr high in February this year, finally catching up to TOPIX when compared to the relative lows in mid 2016 (the chart below is equalized in terms of percentage changes in price). Then in March and early April fell to a 7-year low. source: tradingview.com, QuiddityMore importantly, it fell sharply vs TOPIX and whereas TOPIX has bounced, Ricoh has hardly moved. Investor Day had been scheduled for a while, so it wasn't any disappointment with that, and what should have been Confirmation of Good News seems to have been largely ignored. That is possibly an error by market observers.The Confirmation of Good NewsIn the Investor Day 2019 presentation on 19 April 2019, there was a slide noting the goal of the future capital structure which included returning capital to shareholders to the tune of ¥100bn. It had been a goal of the MTP which runs until this year, but that was presented with enough vagueness to still seem aspirational. In this year's slide deck, the company presented the same slide from the 2019 slide deck, but with an additional slide presenting cashflow sources and uses. source: Ricoh Investor Day Presentation 27 March 2020In that slide (shown below) it shows a section for shareholder returns, including the return of ¥100bn generated during the Mid-Term Plan to FY19. I am the last person to draw lines on a chart in a presentation and assume that they should be taken at presented relative sizes, but the Q&amp;A provided a little clarity on how one should think about that ¥100bn created to FY19.The Mizuho Leasing purchase of the Ricoh Leasing stake is scheduled to close in the next week or two, and fiscal year earnings are scheduled for 8 May 2020.
Given where the stock is now, ¥100bn of returns to shareholders from the last Mid-Term Plan looks juicy. It is 18.8% of market cap. And if one looks at how that might be implemented, the impact looks even more interesting. 
It sometimes helps to think like a card counter. 
More below.


Ricoh's BIG Buyback Potential - The Timing Is Right

Japan

FUJIFILM Holdings Corporation develops, sells and services Imaging, Information, and Document Solutions.  Its products include color films, digital cameras, photofinishing products and equipment.  The Group also manufactures medical and graphic art use equipment and materials, FPD materials, and optical devices, and provides services on office copy machines, printers, and related equipment.

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