Research Coverage of Japanese Listed Companies, Shared Research Inc

Shared Research

Research Coverage of Japanese Listed Companies

Shared Research Inc

Pioneering research coverage of Japanese listed companies. Now customizable and interactive for global institutional investors. Corporate access reimagined.

Equity Bottom-Up

<ul><li>Revenue decreased by 34.8% YoY to JPY4.7bn, operating profit fell 45.5% YoY to JPY2.9bn, and net income dropped 47.6% YoY to JPY1.9bn.</li><li>Investment segment revenue decreased 43.0% YoY to JPY3.3bn, with an operating profit decline of 44.0% YoY to JPY3.2bn.</li><li>Personnel Matching segment revenue increased 52.7% YoY to JPY173mn, with a reduced operating loss of JPY32mn (loss of JPY138mn in Q1 FY03/23).</li></ul>

Revenue decreased by 34.8% YoY to JPY4.7bn, operating profit fell 45.5% YoY to JPY2.9bn, and net income dropped 47.6% YoY to JPY1.9bn.Investment segment revenue decreased 43.0% YoY to JPY3.3bn, with an operating profit decline of 44.0% YoY to JPY3.2bn.Personnel Matching segment revenue increased 52.7% YoY to JPY173mn, with a reduced operating loss of JPY32mn (loss of JPY138mn in Q1 FY03/23).

United Inc (2497 JP): Q1 FY03/25 flash update

Japanese news, equities, and trends, Teddy Letter

Teddy Okuyama

Japanese news, equities, and trends

Teddy Letter

We aim to fill the information gap on the Japan market, especially on small cap companies with little or no analyst coverage. While brokerages and sponsored research provide useful information, there is still an information divide between domestic and foreign investors. We aim to fill that gap by providing access to insights that are lost in translation.

This is installment #6 of my 200-day challenge to do write-ups on 200 Japanese small caps, at the end of which I plan to publish a book (tentative title: Japan Small Caps Handbook). I’m writing these unedited versions in a stream of consciousness style, and they will be refined before being finalized later on.

This is installment #6 of my 200-day challenge to do write-ups on 200 Japanese small caps, at the end of which I plan to publish a book (tentative title: Japan Small Caps Handbook). I’m writing these unedited versions in a stream of consciousness style, and they will be refined before being finalized later on.

'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)

<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/083/132/original/2019-03-25_18-58-11.png?1553507902" class="editor-image img-responsive" data-smartkarma-image-id="83132"></figure>Source: Japan Analytics
</div>There are currently 241 listed Japanese companies that can be categorised as Internet businesses. Our classification overlaps with the TOPIX-33 Information &amp; Communication sub-Sector but is broader in that it encompasses all companies listed on all sections and exchanges but is also narrower in that we have excluded Telecommunications (including <a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">S</a><a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">oftbank Group (9984 JP)</a>) and Information Technology companies. We have adopted a 'quantamental' approach which covers the long-term and current trends for Japan's Internet Sector as a whole, as well as eight sub-Sectors or Peer Groups and the Sectors' leading companies by market capitalisation.  Our focus is exclusively on the locally-listed universe and is based on disclosed financial and market data. We do not provide any forecasts, other than the companies' own forecasts and we do not attempt to make any business model or strategic judgments. Our focus is purely on financial and market performance. We do not cover unlisted and defunct companies such as Livedoor and, therefore, there is implicit survivor bias in the data. The broad themes that are developed in DETAIL below are grouped into six topics as follows: - • SUMMARY •  • FUNDAMENTAL OVERVIEW •  • SCORING - RESULTS &amp; REVISIONS / RELATIVE PRICE •  • RESULTS TRENDS •  • VALUATION • • RECOMMENDATIONS •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/083/206/original/2019-03-25_17-46-58.png?1553565764" class="editor-image img-responsive" data-smartkarma-image-id="83206"></figure><div class="content-caption">Source: Japan Analytics</div>OVERVIEW - As will be covered in greater DETAIL below, Japan has failed to evolve a substantial Internet Sector and, in many business models, has been passed by global competitors including in the home market. Although Internet Sector revenues have grown steadily and now account for close to 1% of the total for all listed companies, operating margins have declined by half in the last seven years and are now only four percentage points higher than the market average. Accordingly, as measured by our Results &amp; Revision Score, the Sector is close to a twelve-year low. The market's response is an unchanged Sector weight in the market composite despite the addition of 111 new companies in the last six years, and a Relative Price Score that has moved in a narrow range over that period. The Sector averages disguise the weak business and market performance of a handful of Sector leaders as well as the overvaluation of the Sector's more successful business models, which is partly a result of a lack of alternatives. Despite the world's most significant Internet investor - <a href="https://www.smartkarma.com/entities/315" target="_blank" data-smartkarma-citation="entities:315:1">Softbank Group (9984 JP)</a>'s Vision Fund - being based in Japan, this fund and other global investors in Internet business have been right to give Japan a 'pass'.


Source: Japan Analytics
There are currently 241 listed Japanese companies that can be categorised as Internet businesses. Our classification overlaps with the TOPIX-33 Information &amp; Communication sub-Sector but is broader in that it encompasses all companies listed on all sections and exchanges but is also narrower in that we have excluded Telecommunications (including Softbank Group (9984 JP)) and Information Technology companies. We have adopted a 'quantamental' approach which covers the long-term and current trends for Japan's Internet Sector as a whole, as well as eight sub-Sectors or Peer Groups and the Sectors' leading companies by market capitalisation.  Our focus is exclusively on the locally-listed universe and is based on disclosed financial and market data. We do not provide any forecasts, other than the companies' own forecasts and we do not attempt to make any business model or strategic judgments. Our focus is purely on financial and market performance. We do not cover unlisted and defunct companies such as Livedoor and, therefore, there is implicit survivor bias in the data. The broad themes that are developed in DETAIL below are grouped into six topics as follows: - • SUMMARY •  • FUNDAMENTAL OVERVIEW •  • SCORING - RESULTS &amp; REVISIONS / RELATIVE PRICE •  • RESULTS TRENDS •  • VALUATION • • RECOMMENDATIONS •Source: Japan AnalyticsOVERVIEW - As will be covered in greater DETAIL below, Japan has failed to evolve a substantial Internet Sector and, in many business models, has been passed by global competitors including in the home market. Although Internet Sector revenues have grown steadily and now account for close to 1% of the total for all listed companies, operating margins have declined by half in the last seven years and are now only four percentage points higher than the market average. Accordingly, as measured by our Results &amp; Revision Score, the Sector is close to a twelve-year low. The market's response is an unchanged Sector weight in the market composite despite the addition of 111 new companies in the last six years, and a Relative Price Score that has moved in a narrow range over that period. The Sector averages disguise the weak business and market performance of a handful of Sector leaders as well as the overvaluation of the Sector's more successful business models, which is partly a result of a lack of alternatives. Despite the world's most significant Internet investor - Softbank Group (9984 JP)'s Vision Fund - being based in Japan, this fund and other global investors in Internet business have been right to give Japan a 'pass'. 

🇯🇵 Japan • Internet Sector Review - 'Japan Passing'

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

We previously highlighted the odd discrepancy between the values of <a href="https://www.smartkarma.com/entities/9485" target="_blank" data-smartkarma-citation="entities:9485:1">United Inc (2497 JP)</a> and <a href="https://www.smartkarma.com/entities/27149" target="_blank" data-smartkarma-citation="entities:27149:1">Mercari Inc (4385 JP)</a>. Since our previous comments on United in <a href="https://www.smartkarma.com/insights/united-with-mercari-we-stand" target="_blank" data-smartkarma-citation="insights:21486">United (With Mercari) We Stand:</a><ul>
<li>United is up 5.4%</li>
<li>Mercari is down 23.9%</li>
<li>Furthermore, at the ratio of short 0.457 Mercari shares per United share, the stub is up 88.1% on a net basis and 13.3% on a gross basis</li>
</ul>We examine the continuing risk-reward for the trade below.

We previously highlighted the odd discrepancy between the values of United Inc (2497 JP) and Mercari Inc (4385 JP). Since our previous comments on United in United (With Mercari) We Stand:
United is up 5.4%
Mercari is down 23.9%
Furthermore, at the ratio of short 0.457 Mercari shares per United share, the stub is up 88.1% on a net basis and 13.3% on a gross basis
We examine the continuing risk-reward for the trade below.

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

It has been an eventful week in North Asia. The biggest story was the hugely successful IPO of Mercari in Japan. In Korea, SK Telecom continued its restructuring with the spin-off and sale of 11st to H&amp;Q/Korea National Pension Fund. Korea's Won continued to decline and it is down 4% versus the USD from June 7th to June 21st. In the near term, I think there could be some more headwinds for Korea than Japan. From Korea's angle, there are three major pressures including: <ul class=""><li>Many stocks that have led the Korea stock market from February to early June were related to the North Korea initiatives and many investors have taken the "buy on rumor, sell on news" post the Trump - KJU meeting in Singapore. </li><li>There are growing concerns about the semiconductor sector as we head into 2H2018/2019, especially regards to the potential downcycle and this is having a real negative impact on Samsung Electronics. There are also greater concerns on the more cyclical Korean market versus the Japanese market, in light of the recent Trump's rhetoric on huge tariffs against China.</li><li>Moon Jae-in govt's unrelenting continued negative pressure on the Samsung related companies. </li></ul>For further details, I want to highlight <a href="https://www.smartkarma.com/profiles/1728" target="_blank" data-smartkarma-citation="accounts:1728">Sharmila Whelan</a>'s report <a href="https://www.smartkarma.com/insights/japan-vs-korea-our-money-is-on-japan" target="_blank" data-smartkarma-citation="insights:20017">Japan Vs. Korea - Our Money Is On Japan</a>. Although this report is dated in early May, it is worth a read again. In particular, Sharmila compares the the data related to manufacturing inventory/sales, manufacturing PMI, and manufacturing utilization rates of Korea and Japan and they are definitely getting worse for Korea vs. Japan. The top three reports (in terms of views) that are relevant for the North Asian markets in the past week were as follows:<ul><li><a href="https://www.smartkarma.com/insights/alpine-agm-upcoming-what-to-do-how-to-trade" target="_blank" data-smartkarma-citation="insights:21349">Alpine AGM Upcoming - What To Do, How To Trade</a></li><li><a href="https://www.smartkarma.com/insights/mercari-70-rise-prices-in-a-lot-of-growth" target="_blank" data-smartkarma-citation="insights:21411">Mercari: 70% Rise Prices in a Lot of Growth</a></li><li><a href="https://www.smartkarma.com/insights/sk-telecom-restructuring-11st-spinoff-sk-planet-sk-techx-merger" target="_blank" data-smartkarma-citation="insights:21438">SK Telecom Restructuring - 11st Spinoff &amp; SK Planet &amp; SK Techx Merger</a></li></ul>

It has been an eventful week in North Asia. The biggest story was the hugely successful IPO of Mercari in Japan. In Korea, SK Telecom continued its restructuring with the spin-off and sale of 11st to H&amp;Q/Korea National Pension Fund. Korea's Won continued to decline and it is down 4% versus the USD from June 7th to June 21st. In the near term, I think there could be some more headwinds for Korea than Japan. From Korea's angle, there are three major pressures including: Many stocks that have led the Korea stock market from February to early June were related to the North Korea initiatives and many investors have taken the "buy on rumor, sell on news" post the Trump - KJU meeting in Singapore. There are growing concerns about the semiconductor sector as we head into 2H2018/2019, especially regards to the potential downcycle and this is having a real negative impact on Samsung Electronics. There are also greater concerns on the more cyclical Korean market versus the Japanese market, in light of the recent Trump's rhetoric on huge tariffs against China.Moon Jae-in govt's unrelenting continued negative pressure on the Samsung related companies. For further details, I want to highlight Sharmila Whelan's report Japan Vs. Korea - Our Money Is On Japan. Although this report is dated in early May, it is worth a read again. In particular, Sharmila compares the the data related to manufacturing inventory/sales, manufacturing PMI, and manufacturing utilization rates of Korea and Japan and they are definitely getting worse for Korea vs. Japan. The top three reports (in terms of views) that are relevant for the North Asian markets in the past week were as follows:Alpine AGM Upcoming - What To Do, How To TradeMercari: 70% Rise Prices in a Lot of GrowthSK Telecom Restructuring - 11st Spinoff &amp; SK Planet &amp; SK Techx Merger

The Week That Was In North Asia@Smartkarma: Won Depreciation, Mercari, & 11st Spin-Off & Investment

Japan

UNITED Inc operates Internet related businesses, such as advertising services, e-mail marketing services, and e-commerce services.  The Company also invests in Internet venture companies and provides support and consulting services.

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United Inc (2497 JP)