'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/000/116/176/original/2020-02-04_04-48-54.png?1580759358" class="editor-image img-responsive" data-smartkarma-image-id="116176"></figure><div class="content-caption">Source • Japan Analytics</div>3RD FEBRUARY ROUNDUP - The 107 Results and 44 Forecast/Revision announcements yesterday nudged both our Scores lower again as the Total Market Value reached a three-month low. We expect the Results Score to break below 0.58 and the Forecast/Revision Score to turn negative later in the week.<hr>• ALL-MARKET COMPOSITE •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/180/original/2020-02-04_05-29-59.png?1580761820" class="editor-image img-responsive" data-smartkarma-image-id="116180"></figure><div class="content-caption">Source • Japan Analytics</div>ALL-MARKET COMPOSITE - As of Friday's close. the aggregate forecast for Operating Income is now ¥800 billion below the TTM results, while the Net Income forecast trails by ¥400 billion. The market's forward PE is still an elevated 16.9x based on a Total Market Value (TMV) of ¥666 trillion.  TTM Net income has declined by 18% in the last twelve months, while the TMV has risen by 19%.<hr>• SECTOR TIMELINE •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/177/original/2020-02-04_04-59-01.png?1580759983" class="editor-image img-responsive" data-smartkarma-image-id="116177"></figure><div class="content-caption">Source • Japan Analytics</div>TIMELINE - The largest on-day move was from Non-Bank Finance following <a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix (8591 JP)</a>'s return to positive earnings momentum. <a href="https://www.smartkarma.com/entities/shionogi-co-ltd" target="_blank" data-smartkarma-citation="entities:19535:1" rel="noopener">Shionogi (4507 JP)</a>' s downward revision continued the downtrend in the Healthcare Sector, while <a href="https://www.smartkarma.com/entities/mitsubishi-electric-corp" target="_blank" data-smartkarma-citation="entities:11171:1" rel="noopener">Mitsubishi Electric (6503 JP)</a> put a 'dent' in the recovery of the Electrical Equipment Sector.  The Information Technology Sector is also losing momentum, as shown in <a href="https://www.smartkarma.com/entities/otsuka-corp" target="_blank" data-smartkarma-citation="entities:7327:1" rel="noopener">Otsuka (4768 JP)</a>' full-year results and FY2020 forecasts with revenue expected to decline by 3%.

Source • Japan Analytics3RD FEBRUARY ROUNDUP - The 107 Results and 44 Forecast/Revision announcements yesterday nudged both our Scores lower again as the Total Market Value reached a three-month low. We expect the Results Score to break below 0.58 and the Forecast/Revision Score to turn negative later in the week.• ALL-MARKET COMPOSITE •Source • Japan AnalyticsALL-MARKET COMPOSITE - As of Friday's close. the aggregate forecast for Operating Income is now ¥800 billion below the TTM results, while the Net Income forecast trails by ¥400 billion. The market's forward PE is still an elevated 16.9x based on a Total Market Value (TMV) of ¥666 trillion.  TTM Net income has declined by 18% in the last twelve months, while the TMV has risen by 19%.• SECTOR TIMELINE •Source • Japan AnalyticsTIMELINE - The largest on-day move was from Non-Bank Finance following Orix (8591 JP)'s return to positive earnings momentum. Shionogi (4507 JP)' s downward revision continued the downtrend in the Healthcare Sector, while Mitsubishi Electric (6503 JP) put a 'dent' in the recovery of the Electrical Equipment Sector.  The Information Technology Sector is also losing momentum, as shown in Otsuka (4768 JP)' full-year results and FY2020 forecasts with revenue expected to decline by 3%.

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 3rd February ▲8591 6752 3064 ▼6503 4768 6920

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">Freee (4478 JP)</a> (freee) aims to raise around US$300m in its mothers listing in Japan. Freee was founded by an ex-Google employee and counts <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 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> amongst its shareholders. It also operates in the SaaS segment and hence, is likely to draw ample attention. In my earlier note, <a href="https://www.smartkarma.com/insights/freee-pre-ipo-has-been-growing-fast-but-missing-data-points-leave-quite-a-few-niggling-doubts" target="_blank" rel="noopener">freee K.K. pre-IPO - Has been growing fast but missing data points leave quite a few niggling doubts</a>, I talked about the company’s background and analysed its past performance. I also spoke about how the company needs to provide more SaaS metrics data.In this note, I’ll compare the company’s operations with some of its peers to analyse how it stacks up against the competition. Freee still has formidable competitors in its segment and doesn’t seem to have emerged as a market leader by any means. Thus, the battle for dominance is very much still on.

Freee (4478 JP) (freee) aims to raise around US$300m in its mothers listing in Japan. Freee was founded by an ex-Google employee and counts Recruit Holdings (6098 JP) and LINE Corp (3938 JP) amongst its shareholders. It also operates in the SaaS segment and hence, is likely to draw ample attention. In my earlier note, freee K.K. pre-IPO - Has been growing fast but missing data points leave quite a few niggling doubts, I talked about the company’s background and analysed its past performance. I also spoke about how the company needs to provide more SaaS metrics data.In this note, I’ll compare the company’s operations with some of its peers to analyse how it stacks up against the competition. Freee still has formidable competitors in its segment and doesn’t seem to have emerged as a market leader by any means. Thus, the battle for dominance is very much still on.

Freee K. K. Pre-IPO - The Battle Is Far from Over

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Last evening, <a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:9936:1">Orix Corp (8591 JP)</a> announced a big buyback for up to 70mm shares (around 5.5% of shares outstanding excluding Treasury shares) and up to ¥100 billion to be conducted between 1 November 2019 and 8 May 2020. The company also announced their Q2 2020 results, confirmed their interim dividend amount at ¥35 per share and forecast their year end dividend at ¥41 per share. The US listed ADR closed at a 3% premium to the local on small volumes.We take a look at some of the details around the buyback and the impact of the previous buyback on the share price over the buyback period.Expect the stock to move higher today and then continue to move higher over the next few weeks as the market reacts to this big buyback.

Last evening, Orix Corp (8591 JP) announced a big buyback for up to 70mm shares (around 5.5% of shares outstanding excluding Treasury shares) and up to ¥100 billion to be conducted between 1 November 2019 and 8 May 2020. The company also announced their Q2 2020 results, confirmed their interim dividend amount at ¥35 per share and forecast their year end dividend at ¥41 per share. The US listed ADR closed at a 3% premium to the local on small volumes.We take a look at some of the details around the buyback and the impact of the previous buyback on the share price over the buyback period.Expect the stock to move higher today and then continue to move higher over the next few weeks as the market reacts to this big buyback.

Global Gaming and Casinos Industry Specialist, Casino Business Review LLC

Howard J Klein

Global Gaming and Casinos Industry Specialist

Equity Bottom-Up

<ul>
<li>MGM Resorts International announced plans to partner 50/50 with Japan's financial services operator, Orix, the first such deal made public.</li>
<li>A bet on both or either company now at near their 52 week lows bears a good risk/yield proposition for investors in the consumer discretionary space.</li>
<li>Japan's IR's will potentially grow into a US$15.8b to US$17.5B industry by 2024/5 or before. We expect the three licenses will go to partnerships between global gaming giants and Japan financial or game manufacturing partners.</li>
</ul>


MGM Resorts International announced plans to partner 50/50 with Japan's financial services operator, Orix, the first such deal made public.
A bet on both or either company now at near their 52 week lows bears a good risk/yield proposition for investors in the consumer discretionary space.
Japan's IR's will potentially grow into a US$15.8b to US$17.5B industry by 2024/5 or before. We expect the three licenses will go to partnerships between global gaming giants and Japan financial or game manufacturing partners.


Orix Corporation: Osaka Casino Resort Partnership with MGM Stakes Out Earliest Claim Among Peers

Quantitative Analysis

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<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/080/230/original/2019-02-26_16-49-25.png?1551182690" class="editor-image img-responsive" data-smartkarma-image-id="80230"></figure>
Source: Japan Analytics
</div>
LARGE CAP RESULTS &amp; REVISION SCORES - The final instalment of our series of reviews of Japan's most recent earnings and revisions announcements covers the Results &amp; Revision Scores for Japan's 785 larger capitalisation companies with a market capitalisation of over ¥100b.
In the DETAIL section below we look at:- 
<ul>
<li>The 30 top and bottom-ranked companies by Results &amp; Revision Score as well as the top and bottom thirty ranked by change in score over the last quarter and provide brief comments on companies and topics of note.</li>
<li>By comparing Results Scores and Forecast/Revision Scores, we sort companies into'Optimists', 'Pessimists', 'Increasingly Optimistic' and 'Increasingly Pessimistic' categories.</li>
<li>As shown above, the relationship between the Results &amp; Revision Score (RRS) and our Relative Price Score (RPS) for each company and divide the large-cap universe into four 'quadrants' - 'Contrarian Buy' (Low RRS &amp; Low RPS) , 'Contrarian Sell' (High RRS &amp; High RPS), 'Peak Growth' (High RRS &amp; Low RPS) and 'Ex-Growth/Turnaround'  (Low RRS &amp; High RPS), highlighting the outliers in each quadrant.
<ul>
<li>In the two 'Contrarian' quadrants, the market is aligned with the current earnings momentum of the companies suggesting opportunities exist only for those willing or brave enough to take a contrarian view. </li>
<li>For 'Peak Growth', 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.</li>
<li>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.   </li>
</ul>
</li>
<li>Finally, we provide tables of the top and bottom five ranked companies in each of our 30 Sectors.</li>
</ul>



Source: Japan Analytics

LARGE CAP RESULTS &amp; REVISION SCORES - The final instalment of our series of reviews of Japan's most recent earnings and revisions announcements covers the Results &amp; Revision Scores for Japan's 785 larger capitalisation companies with a market capitalisation of over ¥100b.
In the DETAIL section below we look at:- 

The 30 top and bottom-ranked companies by Results &amp; Revision Score as well as the top and bottom thirty ranked by change in score over the last quarter and provide brief comments on companies and topics of note.
By comparing Results Scores and Forecast/Revision Scores, we sort companies into'Optimists', 'Pessimists', 'Increasingly Optimistic' and 'Increasingly Pessimistic' categories.
As shown above, the relationship between the Results &amp; Revision Score (RRS) and our Relative Price Score (RPS) for each company and divide the large-cap universe into four 'quadrants' - 'Contrarian Buy' (Low RRS &amp; Low RPS) , 'Contrarian Sell' (High RRS &amp; High RPS), 'Peak Growth' (High RRS &amp; Low RPS) and 'Ex-Growth/Turnaround'  (Low RRS &amp; High RPS), highlighting the outliers in each quadrant.

In the two 'Contrarian' quadrants, the market is aligned with the current earnings momentum of the companies suggesting opportunities exist only for those willing or brave enough to take a contrarian view. 
For 'Peak Growth', 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.   


Finally, we provide tables of the top and bottom five ranked companies in each of our 30 Sectors.


🇯🇵 Japan • Winter Large Cap Results & Revision Scores - Contrarian Buys & Sells/​Peak & Ex-Growth

Japan

ORIX Corporation provides comprehensive financial services throughout the world. The Company's business lines include leasing, real estate loans, life insurance, banking, and consumer finance.  The Company also operates Environment related business and Private equity investment business. ORIX has a professional baseball team, the ORIX Buffalos.

Price Gauge
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Orix Corp (8591 JP)

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 3rd February ▲8591 6752 3064 ▼6503 4768 6920

3RD FEBRUARY ROUNDUP - The 107 Results and 44 Forecast/Revision announcements yesterday nudged both our Scores lower again as the Total Market...

Campbell Gunn

Freee K. K. Pre-IPO - The Battle Is Far from Over

Freee (4478 JP) (freee) aims to raise around US$300m in its mothers listing in Japan. Freee was founded by an ex-Google employee and counts Recruit...

Sumeet Singh

Orix Corp - Big Buyback

Last evening, Orix Corp (8591 JP) announced a big buyback for up to 70mm shares (around 5.5% of shares outstanding excluding Treasury shares) and...

Brian Freitas

Orix Corporation: Osaka Casino Resort Partnership with MGM Stakes Out Earliest Claim Among Peers

MGM Resorts International announced plans to partner 50/50 with Japan's financial services operator, Orix, the first such deal made public. A bet...

Howard J Klein

🇯🇵 Japan • Winter Large Cap Results & Revision Scores - Contrarian Buys & Sells/Peak & Ex-Growth

LARGE CAP RESULTS & REVISION SCORES - The final instalment of our series of reviews of Japan's most recent earnings and revisions...

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 3rd February ▲8591 6752 3064 ▼6503 4768 6920

3RD FEBRUARY ROUNDUP - The 107 Results and 44 Forecast/Revision announcements yesterday nudged both our Scores lower again as the Total Market...

Campbell Gunn

Freee K. K. Pre-IPO - The Battle Is Far from Over

Freee (4478 JP) (freee) aims to raise around US$300m in its mothers listing in Japan. Freee was founded by an ex-Google employee and counts Recruit...

Sumeet Singh

Orix Corp - Big Buyback

Last evening, Orix Corp (8591 JP) announced a big buyback for up to 70mm shares (around 5.5% of shares outstanding excluding Treasury shares) and...

Brian Freitas

Orix Corporation: Osaka Casino Resort Partnership with MGM Stakes Out Earliest Claim Among Peers

MGM Resorts International announced plans to partner 50/50 with Japan's financial services operator, Orix, the first such deal made public. A bet...

Howard J Klein

🇯🇵 Japan • Winter Large Cap Results & Revision Scores - Contrarian Buys & Sells/​Peak & Ex-Growth

LARGE CAP RESULTS & REVISION SCORES - The final instalment of our series of reviews of Japan's most recent earnings and revisions...

Campbell Gunn

🇯🇵 Japan • Winter Large Cap Results & Revision Scores - Contrarian Buys & Sells/Peak & Ex-Growth