Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

<div class="content-highlight">
Both Bitcoin and gold prices are rallying this year and this is probably a sign of a HEDGE against political instability in China, in our view. Bitcoin and gold are two of the best-performing assets this year, with many stock markets around the world hammered by the concerns from the Wuhan virus. 
</div>
The following were the main headlines impacting the blockchain and cryptocurrencies sectors in South Korea, Japan, and globally in the past few weeks. 
<ul>
<li>BITCOIN PRICE RALLY IN 2020</li>
<li>SOUTH KOREA (TAXES ON CRYPTOS) </li>
<li>CME GROUP</li>
<li>XRP DELISTED FROM JAPAN'S BITBOX </li>
<li>FIRST SWISS COMPLIANT DIGITAL IPO </li>
<li>SAUDI ARAMCO INVESTS IN VAKT </li>
<li>NOMURA RESEARCH INSTITUTE (NRI) LAUNCHES A NEW CRYPTOCURRENCY INDEX </li>
<li>FORMATION OF NATIONAL DIGITAL CURRENCIES IN 2020</li>
<li>
BITCOIN BLOCK REWARD HALVING
</li>
<li>
EXPERTISE IN BLOCKCHAIN
</li>
</ul>
<ul>
<li>
GMO INTERNET
</li>
<li>
TOYOTA LEASING (THAILAND)
</li>
</ul>
<ul>
<li>SQUARE CRYPTO</li>
</ul>
<ul>
<li>
BITCOIN DOMINANCE
</li>
</ul>


Both Bitcoin and gold prices are rallying this year and this is probably a sign of a HEDGE against political instability in China, in our view. Bitcoin and gold are two of the best-performing assets this year, with many stock markets around the world hammered by the concerns from the Wuhan virus. 

The following were the main headlines impacting the blockchain and cryptocurrencies sectors in South Korea, Japan, and globally in the past few weeks. 

BITCOIN PRICE RALLY IN 2020
SOUTH KOREA (TAXES ON CRYPTOS) 
CME GROUP
XRP DELISTED FROM JAPAN'S BITBOX 
FIRST SWISS COMPLIANT DIGITAL IPO 
SAUDI ARAMCO INVESTS IN VAKT 
NOMURA RESEARCH INSTITUTE (NRI) LAUNCHES A NEW CRYPTOCURRENCY INDEX 
FORMATION OF NATIONAL DIGITAL CURRENCIES IN 2020

BITCOIN BLOCK REWARD HALVING


EXPERTISE IN BLOCKCHAIN




GMO INTERNET


TOYOTA LEASING (THAILAND)



SQUARE CRYPTO



BITCOIN DOMINANCE



This Month in Blockchain & Cryptos: Bitcoin Price Rally in 2020, OverFuture's Digital IPO, & Vakt

'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. 

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/115/540/original/2020-01-30_04-53-40.png?1580327644" class="editor-image img-responsive" data-smartkarma-image-id="115540"></figure><div class="content-caption">Source • Japan Analytics</div>29TH JANUARY ROUNDUP - Thre were 74 results and 30 forecasts or revisions announcements yesterday. Of the 32 larger-cap companies reporting results, seven saw year-on-year declines in their quarterly OP of greater than 25%, while three - <a href="https://www.smartkarma.com/entities/nec-corp" target="_blank" data-smartkarma-citation="entities:17084:1" rel="noopener">NEC (6701 JP)</a>, <a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent(4751 JP)</a>, and <a href="https://www.smartkarma.com/entities/valuecommerce-co-ltd" target="_blank" data-smartkarma-citation="entities:7970:1" rel="noopener">ValueCommerce (2491 JP)</a> grew profits by more than 25%, with the last of the three showing the strongest revenue growth. <a href="https://www.smartkarma.com/entities/omron-corp" target="_blank" data-smartkarma-citation="entities:15904:1" rel="noopener">Omron (6645 JP)</a> saw sales fall by 23%. Our market composite cap-weighted Results Score declined by 8bps to 0.99FORECASTS - <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon (7751 JP)</a> released the most optimistic forecasts and account for the 24bps uptick in our Forecast/Revision Score; however, in terms of OP the FY2020 forecast is the same as the FY2016 actual result which was the second-worst outcome in the last decade after FY2019. The weakest outlook came from <a href="https://www.smartkarma.com/entities/screen-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:5563:1" rel="noopener">Screen (7735 JP)</a> (-28% v TTM OP), which, when combined with <a href="https://www.smartkarma.com/entities/advantest-corp" target="_blank" data-smartkarma-citation="entities:18107:1" rel="noopener">Advantest (6857 JP)</a>'s third-quarter results, should go some way to puncturing the current fad for owning SPE companies.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/115/543/original/2020-01-30_05-28-22.png?1580329720" class="editor-image img-responsive" data-smartkarma-image-id="115543"></figure><div class="content-caption">Source • Japan Analytics</div>POST-RELEASE RPS CHANGES - Of the larger-cap companies announcing the day before yesterday or pre-close yesterday, <a href="https://www.smartkarma.com/entities/obic-co-ltd" target="_blank" data-smartkarma-citation="entities:1273:1" rel="noopener">OBIC (4684 JP)</a>, <a href="https://www.smartkarma.com/entities/obic-business-consultants" target="_blank" data-smartkarma-citation="entities:17383:1" rel="noopener">Obic Business Consultants (4733 JP)</a>, and <a href="https://www.smartkarma.com/entities/sakai-moving-service-co-ltd" target="_blank" data-smartkarma-citation="entities:10020:1" rel="noopener">Sakai Moving Service (9039 JP)</a> saw Relative Price Score declines. In contrast, the two Canon group companies, <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 (2413 JP)</a>, and <a href="https://www.smartkarma.com/entities/sekisui-jushi-corp" target="_blank" data-smartkarma-citation="entities:7654:1" rel="noopener">Sekisui Jushi (4212 JP)</a> rose.  In the DETAIL below, we review our Sector Timelines and the announcements from <a href="https://www.smartkarma.com/entities/fanuc-corp" target="_blank" data-smartkarma-citation="entities:752:1" rel="noopener">Fanuc (6954 JP)</a>, <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon (7751 JP)</a>, <a href="https://www.smartkarma.com/entities/nec-corp" target="_blank" data-smartkarma-citation="entities:17084:1" rel="noopener">NEC (6701 JP)</a>, <a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent (4751 JP)</a>, <a href="https://www.smartkarma.com/entities/omron-corp" target="_blank" data-smartkarma-citation="entities:15904:1" rel="noopener">Omron (6645 JP)</a>, and <a href="https://www.smartkarma.com/entities/advantest-corp" target="_blank" data-smartkarma-citation="entities:18107:1" rel="noopener">Advantest(6857 JP)</a>.

Source • Japan Analytics29TH JANUARY ROUNDUP - Thre were 74 results and 30 forecasts or revisions announcements yesterday. Of the 32 larger-cap companies reporting results, seven saw year-on-year declines in their quarterly OP of greater than 25%, while three - NEC (6701 JP), CyberAgent(4751 JP), and ValueCommerce (2491 JP) grew profits by more than 25%, with the last of the three showing the strongest revenue growth. Omron (6645 JP) saw sales fall by 23%. Our market composite cap-weighted Results Score declined by 8bps to 0.99FORECASTS - Canon (7751 JP) released the most optimistic forecasts and account for the 24bps uptick in our Forecast/Revision Score; however, in terms of OP the FY2020 forecast is the same as the FY2016 actual result which was the second-worst outcome in the last decade after FY2019. The weakest outlook came from Screen (7735 JP) (-28% v TTM OP), which, when combined with Advantest (6857 JP)'s third-quarter results, should go some way to puncturing the current fad for owning SPE companies.Source • Japan AnalyticsPOST-RELEASE RPS CHANGES - Of the larger-cap companies announcing the day before yesterday or pre-close yesterday, OBIC (4684 JP), Obic Business Consultants (4733 JP), and Sakai Moving Service (9039 JP) saw Relative Price Score declines. In contrast, the two Canon group companies, M3 (2413 JP), and Sekisui Jushi (4212 JP) rose.  In the DETAIL below, we review our Sector Timelines and the announcements from Fanuc (6954 JP), Canon (7751 JP), NEC (6701 JP), CyberAgent (4751 JP), Omron (6645 JP), and Advantest(6857 JP). 

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 29th January - 6954▲ 7751► 6701▲ 4751▲ 6645▼6857▼

Equity Analyst, LightStream Research

Supun Walpola

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 Bottom-Up

<ul>
<li>We are observing a decline in Google Play rankings of CyberAgent’s highest grossing game title, GRANBLUE FANTASY, in October and November.</li>
<li>CyberAgent’s latest hit title, Dragalia Lost, continued to disappoint, grossing below the top-100 Japanese roleplay games.</li>
<li>PRINCESS CONNECT! Re:Dive continued to perform well, ranking among the top-10 highest-grossing role-playing games during the quarter.</li>
<li> Rankings of almost all other hit titles were either declining or flat during the quarter.  </li>
</ul>


We are observing a decline in Google Play rankings of CyberAgent’s highest grossing game title, GRANBLUE FANTASY, in October and November.
CyberAgent’s latest hit title, Dragalia Lost, continued to disappoint, grossing below the top-100 Japanese roleplay games.
PRINCESS CONNECT! Re:Dive continued to perform well, ranking among the top-10 highest-grossing role-playing games during the quarter.
 Rankings of almost all other hit titles were either declining or flat during the quarter.  


CyberAgent [Alternative Data]: Google Play Analytics of Hit Game Titles for 1Q FY09/20

<ul><li>
<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>’s revenue exposure to the Japanese and global labour markets is around 84% which makes it cyclical and susceptible to macro trends. </li></ul><ul><li>Recruit’s share price has increased by nearly 4x over the past five years, putting the company’s valuation at a premium, both historically and against its peers. </li></ul><ul><li>This was on the back of a strong 5-year revenue CAGR of 14.2%, underpinned by both Japanese and global unemployment reaching historical lows. </li></ul><ul><li>However, with global labour markets starting to slow down, and hiring stalls, we believe Recruit’s growth will be hampered in the medium term. Our base case for Recruit assumes a 3-year revenue CAGR of 6.5% over FY03/19-22E. </li></ul><ul><li>Our NTM target price for Recruit is ¥3,235, which is 20% downside from the current market price of JPY 4,049 (as of 20th December 2019). </li></ul><ul><li>Upside risks to our thesis are limited. Global unemployment levels have already bottomed out. Hence, even if current tensions do wear-off, and global economies start heating up, we see only a little upside in labour/employment markets. Our bull case for Recruit is at ¥4,260 – an upside of only 5%. </li></ul><ul><li>Global labour markets are giving mixed signals; unemployment has bottomed out, but job growth is stalled. Should global economic tensions hold, we could see unemployment rates gradually start rising from next year onwards.</li></ul>


Recruit Holdings (6098 JP)’s revenue exposure to the Japanese and global labour markets is around 84% which makes it cyclical and susceptible to macro trends. Recruit’s share price has increased by nearly 4x over the past five years, putting the company’s valuation at a premium, both historically and against its peers. This was on the back of a strong 5-year revenue CAGR of 14.2%, underpinned by both Japanese and global unemployment reaching historical lows. However, with global labour markets starting to slow down, and hiring stalls, we believe Recruit’s growth will be hampered in the medium term. Our base case for Recruit assumes a 3-year revenue CAGR of 6.5% over FY03/19-22E. Our NTM target price for Recruit is ¥3,235, which is 20% downside from the current market price of JPY 4,049 (as of 20th December 2019). Upside risks to our thesis are limited. Global unemployment levels have already bottomed out. Hence, even if current tensions do wear-off, and global economies start heating up, we see only a little upside in labour/employment markets. Our bull case for Recruit is at ¥4,260 – an upside of only 5%. Global labour markets are giving mixed signals; unemployment has bottomed out, but job growth is stalled. Should global economic tensions hold, we could see unemployment rates gradually start rising from next year onwards.

Global Labour Markets Are Starting to Slow Down – Time To "Lay Off" Recruit

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div>The short notional in the market for the week ended 6 December is US$25.84bn (up by US$570m) with the largest short positions in <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:18448:1">Itochu Corp (8001 JP)</a>, <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:73:1">Toyota Motor (7203 JP)</a>, <a href="https://www.smartkarma.com/entities/taiyo-yuden-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:9924:1">Taiyo Yuden (6976 JP)</a>, <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" rel="noopener" data-smartkarma-citation="entities:1:1">Canon Inc (7751 JP)</a> and <a href="https://www.smartkarma.com/entities/sumitomo-mitsui-financial-gr" target="_blank" rel="noopener" data-smartkarma-citation="entities:217:1">Sumitomo Mitsui Financial (8316 JP)</a>. </div><div>Most shorted stocks as a percentage of free float are <a href="https://www.smartkarma.com/entities/leopalace21-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:8244:1">Leopalace21 Corp (8848 JP)</a>, <a href="https://www.smartkarma.com/entities/taiyo-yuden-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:9924:1">Taiyo Yuden (6976 JP)</a>, <a href="https://www.smartkarma.com/entities/tokai-carbon-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:9145:1">Tokai Carbon (5301 JP)</a> and <a href="https://www.smartkarma.com/entities/anritsu-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:3700:1">Anritsu Corp (6754 JP)</a> while the stocks with the highest days to cover are <a href="https://www.smartkarma.com/entities/katakura-industries-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:2007:1">Katakura Industries (3001 JP)</a>, <a href="https://www.smartkarma.com/entities/vital-ksk-holdings-inc" target="_blank" rel="noopener" data-smartkarma-citation="entities:7398:1">Vital Ksk Holdings (3151 JP)</a>, <a href="https://www.smartkarma.com/entities/dcm-holdings-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:13042:1">Dcm Holdings (3050 JP)</a> and <a href="https://www.smartkarma.com/entities/shoei-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:15038:1">Shoei Co Ltd (7839 JP)</a>. </div><div>The largest increases in short notional over the week were <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:15441:1">Monotaro Co Ltd (3064 JP)</a>, <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:751:1">Fast Retailing (9983 JP)</a>, <a href="https://www.smartkarma.com/entities/disco-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:15817:1">Disco Corp (6146 JP)</a> and <a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" rel="noopener" data-smartkarma-citation="entities:8197:1">Cyberagent Inc (4751 JP)</a> while shorts were covered in <a href="https://www.smartkarma.com/entities/japan-airport-terminal-co" target="_blank" rel="noopener" data-smartkarma-citation="entities:18034:1">Japan Airport Terminal Co (9706 JP)</a>, <a href="https://www.smartkarma.com/entities/tokai-carbon-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:9145:1">Tokai Carbon (5301 JP)</a>, <a href="https://www.smartkarma.com/entities/gmo-payment-gateway-inc" target="_blank" rel="noopener" data-smartkarma-citation="entities:1492:1">GMO Payment Gateway (3769 JP)</a> and <a href="https://www.smartkarma.com/entities/bandai-namco-holdings-inc" target="_blank" rel="noopener" data-smartkarma-citation="entities:13435:1">Bandai Namco Holdings (7832 JP)</a>.  <a href="https://www.smartkarma.com/entities/advantest-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:18107:1"></a> <a href="https://www.smartkarma.com/entities/casio-computer-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:18338:1"></a></div><div>Sectorally, short positions were increased in Consumer Discretionary (US$68m), Communication Services (US$66m) and Industrials (US$65m) while shorts were covered in Real Estate (US$27m) and Financials (US$10m).</div>

The short notional in the market for the week ended 6 December is US$25.84bn (up by US$570m) with the largest short positions in Itochu Corp (8001 JP), Toyota Motor (7203 JP), Taiyo Yuden (6976 JP), Canon Inc (7751 JP) and Sumitomo Mitsui Financial (8316 JP). Most shorted stocks as a percentage of free float are Leopalace21 Corp (8848 JP), Taiyo Yuden (6976 JP), Tokai Carbon (5301 JP) and Anritsu Corp (6754 JP) while the stocks with the highest days to cover are Katakura Industries (3001 JP), Vital Ksk Holdings (3151 JP), Dcm Holdings (3050 JP) and Shoei Co Ltd (7839 JP). The largest increases in short notional over the week were Monotaro Co Ltd (3064 JP), Fast Retailing (9983 JP), Disco Corp (6146 JP) and Cyberagent Inc (4751 JP) while shorts were covered in Japan Airport Terminal Co (9706 JP), Tokai Carbon (5301 JP), GMO Payment Gateway (3769 JP) and Bandai Namco Holdings (7832 JP).   Sectorally, short positions were increased in Consumer Discretionary (US$68m), Communication Services (US$66m) and Industrials (US$65m) while shorts were covered in Real Estate (US$27m) and Financials (US$10m).

Japan - Shorts Increase on Pigeon, Fast Retailing; Decrease on Bandai Namco, Orix JREIT

Japan

CyberAgent, Inc. operates blog media website, Ameba.  The Company also operates internet advertising agency, foreign exchange trading website, and creates PC and mobile contents such as advertisements and games. CyberAgent invests in companies with internet related business.

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

CyberAgent Inc (4751 JP)

This Month in Blockchain & Cryptos: Bitcoin Price Rally in 2020, OverFuture's Digital IPO, & Vakt

Both Bitcoin and gold prices are rallying this year and this is probably a sign of a HEDGE against political instability in China, in our view....

Douglas Kim

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 29th January - 6954▲ 7751► 6701▲ 4751▲ 6645▼6857▼

29TH JANUARY ROUNDUP - Thre were 74 results and 30 forecasts or revisions announcements yesterday. Of the 32 larger-cap companies reporting...

Campbell Gunn

CyberAgent [Alternative Data]: Google Play Analytics of Hit Game Titles for 1Q FY09/20

We are observing a decline in Google Play rankings of CyberAgent’s highest grossing game title, GRANBLUE FANTASY, in October and...

Supun Walpola

Global Labour Markets Are Starting to Slow Down – Time To "Lay Off" Recruit

Recruit Holdings (6098 JP)’s revenue exposure to the Japanese and global labour markets is around 84% which makes it cyclical and susceptible to...

Supun Walpola

Japan - Shorts Increase on Pigeon, Fast Retailing; Decrease on Bandai Namco, Orix JREIT

The short notional in the market for the week ended 6 December is US$25.84bn (up by US$570m) with the largest short positions in Itochu Corp (8001...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)