Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

I attended the analyst meeting of HOYA (7741) on Thursday, October 28, and I would like to discuss it in conjunction with the view of the corporate governance.HOYA has always been the top rated company since Metrical began evaluating the corporate governance of listed companies, and as of October 2021, HOYA remains the top rated company in the Metrical universe of 1,717 companies.

I attended the analyst meeting of HOYA (7741) on Thursday, October 28, and I would like to discuss it in conjunction with the view of the corporate governance.HOYA has always been the top rated company since Metrical began evaluating the corporate governance of listed companies, and as of October 2021, HOYA remains the top rated company in the Metrical universe of 1,717 companies.

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

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.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/hoya-corp" target="_blank" data-smartkarma-citation="entities:8990:1" rel="noopener">Hoya Corp (7741 JP)</a>  reported its 2Q FY03/2022 results on Thursday (28th October) which saw revenues growing 16% YoY to JPY162.6bn while reported OP for the quarter increased 14% YoY to JPY49.2bn. The company’s revenue and profits were well above its own guidance for 2QFY03/2022 while reported revenue for the quarter beat consensus estimates by 2.8% and OP beat consensus by a huge margin of 53.2%.

Hoya Corp (7741 JP)  reported its 2Q FY03/2022 results on Thursday (28th October) which saw revenues growing 16% YoY to JPY162.6bn while reported OP for the quarter increased 14% YoY to JPY49.2bn. The company’s revenue and profits were well above its own guidance for 2QFY03/2022 while reported revenue for the quarter beat consensus estimates by 2.8% and OP beat consensus by a huge margin of 53.2%.

Hoya: Long-Term Prospects Seem Attractive Though Some Short-Term Weaknesses Exist

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/olympus-corp" target="_blank" data-smartkarma-citation="entities:356:1" rel="noopener">Olympus Corp (7733 JP)</a> is the global market leader in gastrointestinal endoscopic equipment, with 70%+ share. Global GI endoscopic equipment market is expected to have a CAGR of 4–6% during FY21–24. Olympus is expected to outpace the market due to its dominant positioning in Asia market and superior imaging technologies. The company is one of the early entrants in fast growing Asia markets among its peers. Consequently, Olympus witnessed 4.2x jump in medical business revenue from China in the last decade. Last year, Olympus has launched its most advanced endoscopy system to date, EVIS X1, the first new model in about eight years (vs usual product life cycle of 5–6 years). The company estimates 70,000 units potential only for replacing the previous models by EVIS X1. Olympus is transforming itself to become a pure-play global medical devices company and conducted several M&amp;A to augment its medium-term growth. Its medical business is now back to pre-pandemic level. Concerns regarding China business seems to be over and Olympus shares are trading near its highs. Despite some risk due to global semiconductor shortage, we are bullish on the growth potential of the company’s medical business due to ongoing recovery in elective procedures and new product launch.

Olympus Corp (7733 JP) is the global market leader in gastrointestinal endoscopic equipment, with 70%+ share. Global GI endoscopic equipment market is expected to have a CAGR of 4–6% during FY21–24. Olympus is expected to outpace the market due to its dominant positioning in Asia market and superior imaging technologies. The company is one of the early entrants in fast growing Asia markets among its peers. Consequently, Olympus witnessed 4.2x jump in medical business revenue from China in the last decade. Last year, Olympus has launched its most advanced endoscopy system to date, EVIS X1, the first new model in about eight years (vs usual product life cycle of 5–6 years). The company estimates 70,000 units potential only for replacing the previous models by EVIS X1. Olympus is transforming itself to become a pure-play global medical devices company and conducted several M&amp;A to augment its medium-term growth. Its medical business is now back to pre-pandemic level. Concerns regarding China business seems to be over and Olympus shares are trading near its highs. Despite some risk due to global semiconductor shortage, we are bullish on the growth potential of the company’s medical business due to ongoing recovery in elective procedures and new product launch. 

Olympus (7733 JP): Medical Business Is on a Strong Foothold; Buy at Current Level

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a> and <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> are the most widely held stocks, with 23% and 21% of funds holding a position.Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. <a href="https://www.smartkarma.com/entities/deutsche-post-ag" target="_blank" data-smartkarma-citation="entities:21608:1" rel="noopener">Deutsche Post AG (DPW GR)</a> and <a href="https://www.smartkarma.com/entities/siemens-ag" target="_blank" data-smartkarma-citation="entities:21713:1" rel="noopener">Siemens AG (SIE GR)</a> were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.

Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). Sony Corp (6758 JP) and KDDI Corp (9433 JP) are the most widely held stocks, with 23% and 21% of funds holding a position.Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. Deutsche Post AG (DPW GR) and Siemens AG (SIE GR) were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.

Global Fund Positioning Update:  Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Wisdomtree Japan Hedged Eq / Technical Analysis

Market dynamics continue to send mixed signals, but the bottom line is that not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Additionally, the MSCI ACWI, ACWI ex-US, and EAFE indexes all remain above critical support levels. Until supports start to break we cannot be bearish. It is also worth noting that various indicators could be making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a potential false breakdown in crude oil, and high yield spreads leveling-out.

Market dynamics continue to send mixed signals, but the bottom line is that not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Additionally, the MSCI ACWI, ACWI ex-US, and EAFE indexes all remain above critical support levels. Until supports start to break we cannot be bearish. It is also worth noting that various indicators could be making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a potential false breakdown in crude oil, and high yield spreads leveling-out.

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

Japan

Hoya Corp manufactures electro-optics products such as mask blanks for semiconductors, photomasks for LCD panels, optical glasses, glass memory disks for HDDs, medical flexible endoscopes, eyeglasses, and contact lenses. The Company also provides information system architecture.

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Hoya Corp (7741 JP)

Japan's Governance: HOYA (7741)

I attended the analyst meeting of HOYA (7741) on Thursday, October 28, and I would like to discuss it in conjunction with the view of the corporate...

Metrical Inc

Hoya: Long-Term Prospects Seem Attractive Though Some Short-Term Weaknesses Exist

Semiconductor shortage is negatively impacting Hoya's endoscope business and thin disposable endoscope margins are causing a temporary drop in...

Shifara Samsudeen, ACMA, CGMA

Olympus (7733 JP): Medical Business Is on a Strong Foothold; Buy at Current Level

Olympus is well-positioned for double-digit revenue growth this fiscal driven by earlier-than-expected recovery in medical business and new product...

Tina Banerjee

Global Fund Positioning Update: Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

A detailed look at investor positioning among 380 active Global strategies, covering the major themes in country, sector and stock exposure.

Steven Holden

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

Various indicators are making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a false breakdown in...

Vermilion Research

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