Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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.

Event-Driven

Chiyoda has been on something of a tear, up 54% since the 21st of January. We visited the company yesterday to assess whether there were sufficient catalyst to maintain this trend of outperformance. Details below.

Chiyoda has been on something of a tear, up 54% since the 21st of January. We visited the company yesterday to assess whether there were sufficient catalyst to maintain this trend of outperformance. Details below.

Chiyoda – Qatar the Short-Term Catalyst, Pref Share Buyback the Long-Term Catalyst

'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/000/116/531/original/2020-02-06_03-39-10.png?1580933731" class="editor-image img-responsive" data-smartkarma-image-id="116531"></figure><div class="content-caption">Source • Japan Analytics</div>5TH FEBRUARY ROUNDUP - Wednesday saw 171 Results and 65 Forecast/Revision announcements. The Results Score set another new three-year low losing 16bps to reach 0.35, while the Forecast/Revision Score shed 7bps to reach 0.08. The sogo shosha trading company results were weak, with the exception of <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu (8001 JP)</a>. Amongst large caps, <a href="https://www.smartkarma.com/entities/marubeni-corp" target="_blank" data-smartkarma-citation="entities:7463:1" rel="noopener">Marubeni (8002 JP)</a> and <a href="https://www.smartkarma.com/entities/dena-co-ltd" target="_blank" data-smartkarma-citation="entities:747:1" rel="noopener">DeNA(2432 JP)</a> had Operating Losses, while <a href="https://www.smartkarma.com/entities/mazda-motor-corp" target="_blank" data-smartkarma-citation="entities:20528:1" rel="noopener">Mazda Motor (7261 JP)</a>, <a href="https://www.smartkarma.com/entities/fujikura-ltd" target="_blank" data-smartkarma-citation="entities:10768:1" rel="noopener">Fujikura (5803 JP)</a>, <a href="https://www.smartkarma.com/entities/daicel-corp" target="_blank" data-smartkarma-citation="entities:10533:1" rel="noopener">Daicel (4202 JP)</a>, and <a href="https://www.smartkarma.com/entities/furukawa-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:5193:1" rel="noopener">Furukawa Electric (5801 JP)</a> saw steep quarterly year-on-year OP declines. Amongst the 'winners' were <a href="https://www.smartkarma.com/entities/square-enix-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15003:1" rel="noopener">Square Enix (9684 JP)</a>, and <a href="https://www.smartkarma.com/entities/rengo-co-ltd" target="_blank" data-smartkarma-citation="entities:20278:1" rel="noopener">Rengo (3941 JP)</a>.<hr>• SECTOR TIMELINE •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/532/original/2020-02-06_03-42-28.png?1580934310" class="editor-image img-responsive" data-smartkarma-image-id="116532"></figure><div class="content-caption">Source • Japan Analytics</div>SECTOR TIMELINE - The Wholesale Sector was the largest loser yesterday with <a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi (8058 JP)</a> and <a href="https://www.smartkarma.com/entities/kanematsu-corp" target="_blank" data-smartkarma-citation="entities:5810:1" rel="noopener">Kanematsu (8020 JP)</a> joining Marubeni in posting poor results. <a href="https://www.smartkarma.com/entities/taiyo-nippon-sanso-corp" target="_blank" data-smartkarma-citation="entities:15756:1" rel="noopener">Taiyo Nippon Sanso (4091 JP)</a> slowing momentum and downward revision saw the Chemical Sector move lower again. <a href="https://www.smartkarma.com/entities/agc-inc" target="_blank" data-smartkarma-citation="entities:2167:1" rel="noopener">AGC (5201 JP)</a> initial forecast for FY2020 helped the Other Materials Sector recover some ground.

Source • Japan Analytics5TH FEBRUARY ROUNDUP - Wednesday saw 171 Results and 65 Forecast/Revision announcements. The Results Score set another new three-year low losing 16bps to reach 0.35, while the Forecast/Revision Score shed 7bps to reach 0.08. The sogo shosha trading company results were weak, with the exception of Itochu (8001 JP). Amongst large caps, Marubeni (8002 JP) and DeNA(2432 JP) had Operating Losses, while Mazda Motor (7261 JP), Fujikura (5803 JP), Daicel (4202 JP), and Furukawa Electric (5801 JP) saw steep quarterly year-on-year OP declines. Amongst the 'winners' were Square Enix (9684 JP), and Rengo (3941 JP).• SECTOR TIMELINE •Source • Japan AnalyticsSECTOR TIMELINE - The Wholesale Sector was the largest loser yesterday with Mitsubishi (8058 JP) and Kanematsu (8020 JP) joining Marubeni in posting poor results. Taiyo Nippon Sanso (4091 JP) slowing momentum and downward revision saw the Chemical Sector move lower again. AGC (5201 JP) initial forecast for FY2020 helped the Other Materials Sector recover some ground. 

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 5th February ▲5201 4202 6269 ▼4091 9987 6869

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. 

Equity Bottom-Up

When Japan's purveyor of hardy clothing and gear for labourers and plumbers became a hit with pregnant women, it was clear that <a href="https://www.smartkarma.com/entities/workman-co-ltd" target="_blank" data-smartkarma-citation="entities:8467:1" rel="noopener">Workman Co Ltd (7564 JP)</a> had successfully bridged the divide between workwear and the wider consumer market.
As a result, Workman’s share price broke ¥10,000 for the first time in mid-December and, as of today, remains above that threshold.
This reflects the extraordinary success of the Beisia-controlled retailer since it launched its consumer-targeted chain, Workman Plus, in October 2018, with same-store sales late last year rising by more than 20% after similar 20%+ increases in the same months the year before.
Its success has spawned new competitors, including from Fast Retailing and home centre retailers like Shimachu and Workman's sister chain, Cainz.
Workman, however, has a strong lead and keeps innovating. As <a href="https://www.smartkarma.com/profiles/oshadhi-kumarasiri" target="_blank" data-smartkarma-citation="accounts:3584" rel="noopener">Oshadhi Kumarasiri</a> pointed quite rightly out in his note <a href="https://www.smartkarma.com/insights/workman-s-work-is-done-and-it-is-time-to-send-him-home" target="_blank" rel="noopener">here</a>, Workman's share price looks expensive but over a five-year time frame, Workman is likely to fulfil all expectations.
The key to future growth is its private brands: Workman's own label merchandise still only accounts for 44% of sales but the ratio is rising fast. Its future success or failure will rest on its ability to generate new lines that appeal to general consumers and outdo the competition – including France's Decathlon chain – including pregnant women of course.
In the end, what makes Workman unique is the absolute integrity of its brand and provenance: No other brand can claim to offer high quality, high function items that have withstood the harsh-use environments of construction workers and fishermen for the last two decades – and at such genuinely low prices.
Japan's seemingly unquenchable thirst for real cost performance product is, in this case, perfectly matched by supply.

When Japan's purveyor of hardy clothing and gear for labourers and plumbers became a hit with pregnant women, it was clear that Workman Co Ltd (7564 JP) had successfully bridged the divide between workwear and the wider consumer market.
As a result, Workman’s share price broke ¥10,000 for the first time in mid-December and, as of today, remains above that threshold.
This reflects the extraordinary success of the Beisia-controlled retailer since it launched its consumer-targeted chain, Workman Plus, in October 2018, with same-store sales late last year rising by more than 20% after similar 20%+ increases in the same months the year before.
Its success has spawned new competitors, including from Fast Retailing and home centre retailers like Shimachu and Workman's sister chain, Cainz.
Workman, however, has a strong lead and keeps innovating. As Oshadhi Kumarasiri pointed quite rightly out in his note here, Workman's share price looks expensive but over a five-year time frame, Workman is likely to fulfil all expectations.
The key to future growth is its private brands: Workman's own label merchandise still only accounts for 44% of sales but the ratio is rising fast. Its future success or failure will rest on its ability to generate new lines that appeal to general consumers and outdo the competition – including France's Decathlon chain – including pregnant women of course.
In the end, what makes Workman unique is the absolute integrity of its brand and provenance: No other brand can claim to offer high quality, high function items that have withstood the harsh-use environments of construction workers and fishermen for the last two decades – and at such genuinely low prices.
Japan's seemingly unquenchable thirst for real cost performance product is, in this case, perfectly matched by supply.

Workman: Success Attracts New Competitors but in the Long-Term Workman Still Wins

With a series of mergers over the past three months alone, the big three mobile providers, along with <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a> and <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> , are drawing up battle-lines for competition in e-commerce, mobile payments and loyalty schemes.<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>/<a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a> acquisition of <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a>  and <a href="https://www.smartkarma.com/entities/line-corp" target="_blank" data-smartkarma-citation="entities:22772:1" rel="noopener">LINE Corp (3938 JP)</a> was the start but last month <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> announced it would tie with <a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson Inc (2651 JP)</a> and <a href="https://www.smartkarma.com/entities/ntt-docomo-inc" target="_blank" data-smartkarma-citation="entities:1089:1" rel="noopener">NTT Docomo Inc (9437 JP)</a> made a deal with Amazon.The mobile-driven shopping ecosystem is becoming the biggest news in retailing.

With a series of mergers over the past three months alone, the big three mobile providers, along with Rakuten Inc (4755 JP) and Amazon.com Inc (AMZN US) , are drawing up battle-lines for competition in e-commerce, mobile payments and loyalty schemes.Softbank Group (9984 JP)/Z Holdings (4689 JP) acquisition of ZOZO Inc (3092 JP)  and LINE Corp (3938 JP) was the start but last month KDDI Corp (9433 JP) announced it would tie with Lawson Inc (2651 JP) and NTT Docomo Inc (9437 JP) made a deal with Amazon.The mobile-driven shopping ecosystem is becoming the biggest news in retailing.

Lawson and KDDI Join Forces in Cashless Payments War

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Reuters reported yesterday (25th November 2019) that a consortium led by Japan’s Mitsubishi Corporation has agreed to purchase the Dutch Energy company Eneco for a value of EUR4.1bn (USD4.52bn). The news was later confirmed by all three parties involved, Eneco, Mitsubishi Corporation and Chubu Electric. Eneco is currently owned by 44 Dutch municipalities and under the terms of the deal, Mitsubishi will own 80% of Eneco while its partner Chubu Electric will own the remaining 20%. The deal which is approved by Eneco’s board must be approved by Eneco’s municipal shareholders and most likely will get approval by next year. According to Eneco, the two Japanese companies will help strengthen Eneco’s sustainable energy strategy and allow it to further expand internationally. On the other hand, the partnership will allow both Mitsubishi and Chubu Electric to expand their energy initiatives in Europe and also to develop new products and services related to energy management. At the same time, it might give both Mitsubishi Corporation and Chubu Electric better green credentials and help them acquire or participate in other renewable projects too.

Reuters reported yesterday (25th November 2019) that a consortium led by Japan’s Mitsubishi Corporation has agreed to purchase the Dutch Energy company Eneco for a value of EUR4.1bn (USD4.52bn). The news was later confirmed by all three parties involved, Eneco, Mitsubishi Corporation and Chubu Electric. Eneco is currently owned by 44 Dutch municipalities and under the terms of the deal, Mitsubishi will own 80% of Eneco while its partner Chubu Electric will own the remaining 20%. The deal which is approved by Eneco’s board must be approved by Eneco’s municipal shareholders and most likely will get approval by next year. According to Eneco, the two Japanese companies will help strengthen Eneco’s sustainable energy strategy and allow it to further expand internationally. On the other hand, the partnership will allow both Mitsubishi and Chubu Electric to expand their energy initiatives in Europe and also to develop new products and services related to energy management. At the same time, it might give both Mitsubishi Corporation and Chubu Electric better green credentials and help them acquire or participate in other renewable projects too.

Mitsubishi Corp and Partner Chubu Electric to Buy Dutch Power Firm Eneco

Japan

Mitsubishi Corporation is a general trading company.  The Company has business groups such as New Business Initiatives, IT & Electronics, Fuels, Metals, Machinery, Chemicals, Living Essentials, and Professional Services.  Mitsubishi diversifies by satellite communications through a joint venture.

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Mitsubishi Corp (8058 JP)

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 5th February ▲5201 4202 6269 ▼4091 9987 6869

5TH FEBRUARY ROUNDUP - Wednesday saw 171 Results and 65 Forecast/Revision announcements. The Results Score set another new three-year low losing...

Campbell Gunn

Workman: Success Attracts New Competitors but in the Long-Term Workman Still Wins

When Japan's purveyor of hardy clothing and gear for labourers and plumbers became a hit with pregnant women, it was clear that Workman Co Ltd...

Michael Causton

Lawson and KDDI Join Forces in Cashless Payments War

With a series of mergers over the past three months alone, the big three mobile providers, along with Rakuten Inc (4755 JP) and Amazon.com Inc...

Michael Causton

Mitsubishi Corp and Partner Chubu Electric to Buy Dutch Power Firm Eneco

Reuters reported yesterday (25th November 2019) that a consortium led by Japan’s Mitsubishi Corporation has agreed to purchase the Dutch Energy...

Shifara Samsudeen, ACMA, CGMA

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Chiyoda – Qatar the Short-Term Catalyst, Pref Share Buyback the Long-Term Catalyst

Chiyoda has been on something of a tear, up 54% since the 21st of January. We visited the company yesterday to assess whether there were sufficient...

Mio Kato

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 5th February ▲5201 4202 6269 ▼4091 9987 6869

5TH FEBRUARY ROUNDUP - Wednesday saw 171 Results and 65 Forecast/Revision announcements. The Results Score set another new three-year low losing...

Campbell Gunn

Workman: Success Attracts New Competitors but in the Long-Term Workman Still Wins

When Japan's purveyor of hardy clothing and gear for labourers and plumbers became a hit with pregnant women, it was clear that Workman Co Ltd...

Michael Causton

Lawson and KDDI Join Forces in Cashless Payments War

With a series of mergers over the past three months alone, the big three mobile providers, along with Rakuten Inc (4755 JP) and Amazon.com Inc...

Michael Causton

Mitsubishi Corp and Partner Chubu Electric to Buy Dutch Power Firm Eneco

Reuters reported yesterday (25th November 2019) that a consortium led by Japan’s Mitsubishi Corporation has agreed to purchase the Dutch Energy...

Shifara Samsudeen, ACMA, CGMA