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.

Equity Bottom-Up

Consensus is at ¥40bn. Consensus is Jon Snow.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/197/968/original/image_86592491321617026335735.png?1617026336" class="editor-image img-responsive" data-smartkarma-image-id="197968"></figure>We believe that not only will Monster Hunter Rise demonstrate strong "legs" and continue to sell in large volumes well into 2021, but that RE8 will make a run at becoming the best selling RE title ever, AND that Monster Hunter Stories 2 will set right many of the mistakes of its predecessor.

Consensus is at ¥40bn. Consensus is Jon Snow.We believe that not only will Monster Hunter Rise demonstrate strong "legs" and continue to sell in large volumes well into 2021, but that RE8 will make a run at becoming the best selling RE title ever, AND that Monster Hunter Stories 2 will set right many of the mistakes of its predecessor.

Capcom – We Are Starting to Think… ¥100bn in OP Is Not Impossible Next Year

Our sceptical position on the elevated multiples for tech stocks has been relatively consistent over time. As with all bubbles, despite valuations clearly being out of touch with reality, markets have continued to trend upwards, and in many cases the least attractive stocks have done the best. We would argue that signs of liquidity issues at Ark and the rapid implosion of Archegos herald the beginning of the end.

Our sceptical position on the elevated multiples for tech stocks has been relatively consistent over time. As with all bubbles, despite valuations clearly being out of touch with reality, markets have continued to trend upwards, and in many cases the least attractive stocks have done the best. We would argue that signs of liquidity issues at Ark and the rapid implosion of Archegos herald the beginning of the end.

Softbank – Is Archegos the Bear Stearns CDO Funds in the Coalmine?

We have been vocal about expecting some very strong earnings momentum from Capcom over the next two quarters. The stock had been deflating slightly over the last month or so, presumably due to longer-term holders taking some very healthy potential profits. However, it is now up 11.1% since March 18th and once again breaking out to new highs. We check in quickly on Monster Hunter Rise below.

We have been vocal about expecting some very strong earnings momentum from Capcom over the next two quarters. The stock had been deflating slightly over the last month or so, presumably due to longer-term holders taking some very healthy potential profits. However, it is now up 11.1% since March 18th and once again breaking out to new highs. We check in quickly on Monster Hunter Rise below.

Capcom – A Quick Update on Our Top Short-Term Pick

After rising almost 18% following its 3Q earnings blowout, Sony stock has meandered a little but been strengthening of late. We remain highly positive on earnings prospects and consider consensus estimates to be far too low. While we expect continued strong momentum from a slew of exclusive games and broad strength across the company’s segments, we believe that its just announced purchase of the Evo Championship Series has some interesting long-term implications that could fly under the radar.

After rising almost 18% following its 3Q earnings blowout, Sony stock has meandered a little but been strengthening of late. We remain highly positive on earnings prospects and consider consensus estimates to be far too low. While we expect continued strong momentum from a slew of exclusive games and broad strength across the company’s segments, we believe that its just announced purchase of the Evo Championship Series has some interesting long-term implications that could fly under the radar.

Sony – Time to Add to Our 2021 Conviction Call as They Acquire Fighting Game Tournament Evo

Thematic (Sector/Industry)

eSports offer intriguing investment possibilities to investors given very large projected TAMs, high growth rates and links to a variety of other fast growing industries including games, streaming, animation, tech hardware and social media. This makes eSports important to understand and below we examine key themes that investors should be aware of, before delving into a full primer on the space, companies with exposure to eSports, Asian eSports franchises and key eSports games to be aware of.

eSports offer intriguing investment possibilities to investors given very large projected TAMs, high growth rates and links to a variety of other fast growing industries including games, streaming, animation, tech hardware and social media. This makes eSports important to understand and below we examine key themes that investors should be aware of, before delving into a full primer on the space, companies with exposure to eSports, Asian eSports franchises and key eSports games to be aware of.

Japan

CAPCOM CO., LTD. develops consumer video game software.  The Company also develops, manufactures, markets, and leases arcade game machines.  Capcom also operates amusement facilities.

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Capcom Co Ltd (9697 JP)

Capcom – We Are Starting to Think… ¥100bn in OP Is Not Impossible Next Year

We believe that Monster Hunter Rise, Resident Evil Village and Monster Hunter Stories 2 could combine to drive unprecedented profitability at...

Mio Kato

Softbank – Is Archegos the Bear Stearns CDO Funds in the Coalmine?

With a lot of signs of market stress emerging following a truly bubbly run up in 2020 we examine the prospects for a stock that has traditionally...

Mio Kato

Capcom – A Quick Update on Our Top Short-Term Pick

Monster Hunter Rise looks set to put up some very nice numbers at release and beyond. It is one reason why Capcom is out top short-term pick, but...

Mio Kato

Sony – Time to Add to Our 2021 Conviction Call as They Acquire Fighting Game Tournament Evo

We believe that Sony's just announced purchase of the Evo Championship Series has some interesting long-term implications that could fly under the...

Mio Kato

ESports – Entering the Third Innings

In this Smartkarma Original we examine the state of eSports in Asia, examining differences with traditional sports and the games, teams and...

Mio Kato

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