'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. 

Quantitative Analysis

- PEER GROUP SCORE MATRIX -
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/079/840/original/2019-02-22_18-26-15.png?1550827634" class="editor-image img-responsive" data-smartkarma-image-id="79840"></figure>
<div class="content-caption">Source: Japan Analytics</div>
INTRODUCTION - Following on from our review of the Market Composite and Sectors, this Insight will cover the cap-weighted Results &amp; Revision Scores for the 328 Peer Groups that comprise our 30 Sectors providing greater depth to our analysis of current business trends.  Peer Group definitions reflect both standard SIC/GICS classifications as well as local market conventions. The number of constituents and market capitalisation for each Peer Group varies widely. 
RRS/RPS SCORE MATRIX - Combining our Results &amp; Revision Scores (RRS) with each Peer Group's Relative Price Score (RPS) allows a classification of our Peer Group universe into four quadrants -
<ul>
<li>'Contrarian Buy'  &gt; Low RRS &amp; Low RPS </li>
<li>'Contrarian Sell' &gt; High RRS &amp; High RPS</li>
<li>
Peak Growth' &gt; High RRS &amp; Low RPS</li>
<li>'Ex-Growth/Turnaround' &gt; Low RRS &amp; High RPS</li>
</ul>
THE 'QUADRANTS' - In the two 'Contrarian' quadrants, the market is aligned with the current earnings momentum of the Peer Groups suggesting opportunities exist only for those willing or brave enough to take a contrarian view.  For 'Peak Growth' Peer Groups, the market is calling for a downturn in momentum that has yet to be reflected in quarterly earnings. Where the cycle is more prolonged than expected, there are often opportunities for short-term rebounds in what are normally relatively-inexpensive companies. The 'Ex-Growth' quadrant often consists of former 'Contrarian Sell's where the market is reluctant to acknowledge that the cycle has turned. This quadrant can also contain 'Turnarounds' - formerly 'Contrarian Buys' where the market is correctly anticipating a change in fortunes.    
<div class="content-highlight">
In the DETAIL section below, we list the top and bottom twenty Peer Groups ranked by Results &amp; Revision Score and the top and bottom twenty most-changed over the last three months as well the most optimistic and most pessimistic.  In our ranked tables we have listed only those Peer Groups with an aggregate capitalisation of over ¥50b. 
</div>

- PEER GROUP SCORE MATRIX -

Source: Japan Analytics
INTRODUCTION - Following on from our review of the Market Composite and Sectors, this Insight will cover the cap-weighted Results &amp; Revision Scores for the 328 Peer Groups that comprise our 30 Sectors providing greater depth to our analysis of current business trends.  Peer Group definitions reflect both standard SIC/GICS classifications as well as local market conventions. The number of constituents and market capitalisation for each Peer Group varies widely. 
RRS/RPS SCORE MATRIX - Combining our Results &amp; Revision Scores (RRS) with each Peer Group's Relative Price Score (RPS) allows a classification of our Peer Group universe into four quadrants -

'Contrarian Buy'  &gt; Low RRS &amp; Low RPS 
'Contrarian Sell' &gt; High RRS &amp; High RPS

Peak Growth' &gt; High RRS &amp; Low RPS
'Ex-Growth/Turnaround' &gt; Low RRS &amp; High RPS

THE 'QUADRANTS' - In the two 'Contrarian' quadrants, the market is aligned with the current earnings momentum of the Peer Groups suggesting opportunities exist only for those willing or brave enough to take a contrarian view.  For 'Peak Growth' Peer Groups, the market is calling for a downturn in momentum that has yet to be reflected in quarterly earnings. Where the cycle is more prolonged than expected, there are often opportunities for short-term rebounds in what are normally relatively-inexpensive companies. The 'Ex-Growth' quadrant often consists of former 'Contrarian Sell's where the market is reluctant to acknowledge that the cycle has turned. This quadrant can also contain 'Turnarounds' - formerly 'Contrarian Buys' where the market is correctly anticipating a change in fortunes.    

In the DETAIL section below, we list the top and bottom twenty Peer Groups ranked by Results &amp; Revision Score and the top and bottom twenty most-changed over the last three months as well the most optimistic and most pessimistic.  In our ranked tables we have listed only those Peer Groups with an aggregate capitalisation of over ¥50b. 


🇯🇵 Japan: Winter Peer Group Results & Revision Scores - Contrarian Buys & Sells/Peak & Ex-Growth

Asia Long-Short PM/Analyst

Curtis Lehnert

Event-Driven

The company that brought the off-road vehicle to post-war India in the 1940s has grown into a leading personal vehicle manufacturer covering land, air and sea. Merely making cars, planes and boats wasn't ambitious enough for this company though, the conglomerate wouldn't be complete without a financial services and tech consulting business under the corporate umbrella. 
Indian holding companies typically trade a wider discount to NAV than their East Asian counterparts, however the 42% discount to NAV that <a href="https://www.smartkarma.com/entities/16441" target="_blank" data-smartkarma-citation="entities:16441:1">Mahindra &amp; Mahindra (MM IN)</a> currently trades at, is a trough level historically for the company. In the body of this insight I will present my case for a stub trade on the company, detailing the business structure, performance and the unlisted stub businesses.
In this insight I will cover:
I. The Trade
II. Group Overview and Stub Business Review
III. My Track Record with Stub Trades

The company that brought the off-road vehicle to post-war India in the 1940s has grown into a leading personal vehicle manufacturer covering land, air and sea. Merely making cars, planes and boats wasn't ambitious enough for this company though, the conglomerate wouldn't be complete without a financial services and tech consulting business under the corporate umbrella. 
Indian holding companies typically trade a wider discount to NAV than their East Asian counterparts, however the 42% discount to NAV that Mahindra &amp; Mahindra (MM IN) currently trades at, is a trough level historically for the company. In the body of this insight I will present my case for a stub trade on the company, detailing the business structure, performance and the unlisted stub businesses.
In this insight I will cover:
I. The Trade
II. Group Overview and Stub Business Review
III. My Track Record with Stub Trades

TRADE IDEA - Mahindra & Mahindra (MM IN) Stub: Rise

In my original insight on December 11, 2018 <a href="https://www.smartkarma.com/insights/trade-idea-toyota-industries-6201-jp-stub-riding-the-automation-wave" target="_blank" data-smartkarma-citation="insights:26653">TRADE IDEA - Toyota Industries (6201 JP) Stub: Riding the Automation Wave</a> , I proposed setting up a stub trade to isolate the market leading materials handling and automotive components business of <a href="https://www.smartkarma.com/entities/4500" target="_blank" data-smartkarma-citation="entities:4500:1">Toyota Industries (6201 JP)</a> that was trading at an unwarranted 35% discount to NAV . During the 56 calendar days that followed, <a href="https://www.smartkarma.com/entities/4500" target="_blank" data-smartkarma-citation="entities:4500:1">Toyota Industries (6201 JP)</a> has gained an underwhelming 4% and the trade has made 1.96% on the gross notional. This hasn't exactly been a trade to tell the grand-kids about, more or less a flat result but in this insight I will outline why I think the trade is over.
In this insight I will discuss:
<ul class="">
<li>Performance of ALL my recommended stub trades</li>
<li>a post-mortem trade analysis on the Toyota Industries stub</li>
<li>alternative data support for my actions</li>
</ul>

In my original insight on December 11, 2018 TRADE IDEA - Toyota Industries (6201 JP) Stub: Riding the Automation Wave , I proposed setting up a stub trade to isolate the market leading materials handling and automotive components business of Toyota Industries (6201 JP) that was trading at an unwarranted 35% discount to NAV . During the 56 calendar days that followed, Toyota Industries (6201 JP) has gained an underwhelming 4% and the trade has made 1.96% on the gross notional. This hasn't exactly been a trade to tell the grand-kids about, more or less a flat result but in this insight I will outline why I think the trade is over.
In this insight I will discuss:

Performance of ALL my recommended stub trades
a post-mortem trade analysis on the Toyota Industries stub
alternative data support for my actions


TRADE IDEA - Toyota Industries (6201 JP): Close the Stub Trade

Take out an ad in a magazine or pay a one of the Wondergirls to post an Instagram photo of herself using our makeup? How do we get Americans and Europeans to want our bubble tea sleeping packs and panda-shaped palettes? All valid questions for K-beauty companies in the midst of a global expansion.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/075/250/original/Capture11.PNG?1547155034" class="editor-image img-responsive" data-smartkarma-image-id="75250"></figure>
<div class="content-caption">Source: Internet - Chosungah Beauty</div>
Korean beauty products powerhouse, Amorepacific is going through some growing pains at the moment. In the 3Q18 the group reported a YoY sales increase of 6% but OP tumbled 24% due to increased personnel and marketing costs. In a management policy statement last week, Chairman Suh outlined the problems the group is encountering as it copes with reaching customers in a world where online and offline customer interaction is changing. 
The stub is now trading at its widest discount to NAV in at least 3 years and has reached 22% discount to its Sum of the Parts NAV by my calculations. This level represents a level 1.5 standard deviations below its long-term average and also offers compelling value. 
In this insight I will detail:
<ul>
<li>an actionable market-neutral trade idea</li>
<li>an analysis of the various business units of Amorepacific</li>
<li>reasons for the under-performance of Amorepacific parent and a sign of a rebound</li>
<li>a recap of ALL my stub trade ideas on Smartkarma, including track record of performance</li>
</ul>

Take out an ad in a magazine or pay a one of the Wondergirls to post an Instagram photo of herself using our makeup? How do we get Americans and Europeans to want our bubble tea sleeping packs and panda-shaped palettes? All valid questions for K-beauty companies in the midst of a global expansion.

Source: Internet - Chosungah Beauty
Korean beauty products powerhouse, Amorepacific is going through some growing pains at the moment. In the 3Q18 the group reported a YoY sales increase of 6% but OP tumbled 24% due to increased personnel and marketing costs. In a management policy statement last week, Chairman Suh outlined the problems the group is encountering as it copes with reaching customers in a world where online and offline customer interaction is changing. 
The stub is now trading at its widest discount to NAV in at least 3 years and has reached 22% discount to its Sum of the Parts NAV by my calculations. This level represents a level 1.5 standard deviations below its long-term average and also offers compelling value. 
In this insight I will detail:

an actionable market-neutral trade idea
an analysis of the various business units of Amorepacific
reasons for the under-performance of Amorepacific parent and a sign of a rebound
a recap of ALL my stub trade ideas on Smartkarma, including track record of performance


TRADE IDEA: Amorepacific (002790 KS) Stub: A Beautiful Opportunity

In my original insight on October 17, 2018 <a href="https://www.smartkarma.com/insights/trade-idea-jardine-cycle-carriage-jcnc-sp-stub" target="_blank" data-smartkarma-citation="insights:24780">TRADE IDEA - Jardine Cycle &amp; Carriage (JCNC SP) Stub</a> , I proposed setting up a stub trade to profit from volatility in the markets that caused the <a href="https://www.smartkarma.com/entities/347" target="_blank" data-smartkarma-citation="entities:347:1">Jardine Cycle &amp; Carriage (JCNC SP)</a> stub to trade at a historically low discount to NAV. During the 78 calendar days that followed, <a href="https://www.smartkarma.com/entities/347" target="_blank" data-smartkarma-citation="entities:347:1">Jardine Cycle &amp; Carriage (JCNC SP)</a> has gained 23% and the trade has made 5.03% on the gross notional. I now recommend closing the trade.In this insight I will discuss:<ul>
<li>Performance of ALL my recommended stub trades</li>
<li>a post-mortem trade analysis on the JCNC stub</li>
</ul>

In my original insight on October 17, 2018 TRADE IDEA - Jardine Cycle &amp; Carriage (JCNC SP) Stub , I proposed setting up a stub trade to profit from volatility in the markets that caused the Jardine Cycle &amp; Carriage (JCNC SP) stub to trade at a historically low discount to NAV. During the 78 calendar days that followed, Jardine Cycle &amp; Carriage (JCNC SP) has gained 23% and the trade has made 5.03% on the gross notional. I now recommend closing the trade.In this insight I will discuss:
Performance of ALL my recommended stub trades
a post-mortem trade analysis on the JCNC stub


Jardine C&C (JCNC SP): Close the Stub Trade

Japan

Mitsui E&S Holdings Co., Ltd. engineers, builds, and repairs ships.  The Company also manufactures industrial machinery and equipment and builds power plants.  Mitsui Engineering & Shipbuilding also operates information systems services and real estate business.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Mitsui E&S Holdings (7003 JP)

🇯🇵 Japan: Winter Peer Group Results & Revision Scores - Contrarian Buys & Sells/Peak & Ex-Growth

- PEER GROUP SCORE MATRIX - INTRODUCTION - Following on from our review of the Market Composite and Sectors, this Insight will cover the...

Campbell Gunn

TRADE IDEA - Mahindra & Mahindra (MM IN) Stub: Rise

The company that brought the off-road vehicle to post-war India in the 1940s has grown into a leading personal vehicle manufacturer covering land,...

Curtis Lehnert

TRADE IDEA - Toyota Industries (6201 JP): Close the Stub Trade

In my original insight on December 11, 2018 TRADE IDEA - Toyota Industries (6201 JP) Stub: Riding the Automation Wave , I proposed setting up a...

Curtis Lehnert

TRADE IDEA: Amorepacific (002790 KS) Stub: A Beautiful Opportunity

Take out an ad in a magazine or pay a one of the Wondergirls to post an Instagram photo of herself using our makeup? How do we get Americans and...

Curtis Lehnert

Jardine C&C (JCNC SP): Close the Stub Trade

In my original insight on October 17, 2018 TRADE IDEA - Jardine Cycle & Carriage (JCNC SP) Stub , I proposed setting up a stub trade to profit...

Curtis Lehnert

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)