'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Thematic (Sector/Industry)

<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/163/118/original/2020-10-03_15-34-01.png?1601706874" class="editor-image img-responsive" data-smartkarma-image-id="163118"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div>
<p><strong>WARMING UP</strong> - Earnings momentum is finally on the 'up'. Our Interim Forecast/Revision Score data series which runs from March to September finished 2020 on a two-month high, while both the Annual series are above their September low points. The divergence between domestic non-manufacturing and globally-orientated manufacturing companies continues to widen exemplified by <a href="https://www.smartkarma.com/entities/honda-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:154:1" rel="noopener">Honda Motor (7267 JP)</a>'s announcement of their decision to pull out of Formula 1 from the end of the 2021 season. Although trailing earnings have also stabilised, operating and net income forecasts and their 'gap to trailing' continue to increase. The forward multiple is 32.5 times. </p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/163/261/original/2020-10-04_07-12-52.png?1601763187" class="editor-image img-responsive" data-smartkarma-image-id="163261"></figure><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p>
</div><div><p>Our best and worst pair is home centre <a href="https://www.smartkarma.com/entities/shimachu-co-ltd" target="_blank" data-smartkarma-citation="entities:5235:1" rel="noopener">Shimachu (8184 JP)</a> for whom a rumoured bid from peer DCM has emerged and diaper machinery maker and small-cap value investor favourite and Unicharm proxy<a href="https://www.smartkarma.com/entities/zuiko-corp" target="_blank" data-smartkarma-citation="entities:5568:1" rel="noopener"> Zuiko (6279 JP)</a>. </p></div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/163/135/original/2020-10-03_17-07-27.png?1601712488" class="editor-image img-responsive" data-smartkarma-image-id="163135"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/163/136/original/2020-10-03_17-08-41.png?1601712545" class="editor-image img-responsive" data-smartkarma-image-id="163136"></figure><hr><div><p style="text-align: center;"><strong>DAILY STATS</strong></p></div><hr><div><p style="text-align: center;"><strong>18 Quarterly Results</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Results Score:</strong> 56% Positive / 11% Neutral / 33% Negative</p></li>
<li><p><strong>Average Results Score Change:</strong> 0.0 points</p></li>
<li><p><strong>Average % Change in Revenue:</strong> -9.6% Quarter YoY / -5.2% Rolling TTM YoY </p></li>
<li><p><strong>Average Operating Profit Margin Change:</strong> -2.6ppt</p></li>
<li><p><strong>Percentage Making Quarterly Losses:</strong> 33%</p></li>
</ul></div><hr><div><p style="text-align: center;"><strong>9 Annual • 6 Interim Forecasts/Revisions</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Annual Forecast/Revision Score:</strong> 33% Positive /22% Neutral / 44% Negative</p></li>
<li><p><strong>Interim Forecast/Revision Score Change:</strong> 50% Positive / 17% Neutral / 33% Negative</p></li>
<li><p><strong>Average Forecast/Revision Score Change:</strong> -2.1 points</p></li>
</ul></div>


Source for all charts &amp; tables: Japan Analytics
WARMING UP - Earnings momentum is finally on the 'up'. Our Interim Forecast/Revision Score data series which runs from March to September finished 2020 on a two-month high, while both the Annual series are above their September low points. The divergence between domestic non-manufacturing and globally-orientated manufacturing companies continues to widen exemplified by Honda Motor (7267 JP)'s announcement of their decision to pull out of Formula 1 from the end of the 2021 season. Although trailing earnings have also stabilised, operating and net income forecasts and their 'gap to trailing' continue to increase. The forward multiple is 32.5 times. 
• BEST &amp; WORST •
Our best and worst pair is home centre Shimachu (8184 JP) for whom a rumoured bid from peer DCM has emerged and diaper machinery maker and small-cap value investor favourite and Unicharm proxy Zuiko (6279 JP). DAILY STATS18 Quarterly Results
Results Score: 56% Positive / 11% Neutral / 33% Negative
Average Results Score Change: 0.0 points
Average % Change in Revenue: -9.6% Quarter YoY / -5.2% Rolling TTM YoY 
Average Operating Profit Margin Change: -2.6ppt
Percentage Making Quarterly Losses: 33%
9 Annual • 6 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 33% Positive /22% Neutral / 44% Negative
Interim Forecast/Revision Score Change: 50% Positive / 17% Neutral / 33% Negative
Average Forecast/Revision Score Change: -2.1 points


🇯🇵 JAPAN • Results & Revisions 10/​​​​​02 DCM (Under)Bids for Shimachu, Zuiko>Unicharm, Ktk>Canon

<div><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p></div><p>Our 'best' and 'worst' pairing from yesterday's announcements is micro-cap home centre <a href="https://www.smartkarma.com/entities/encho-co-ltd" target="_blank" data-smartkarma-citation="entities:2666:1" rel="noopener">Encho (8208 JP)</a> and utility <a href="https://www.smartkarma.com/entities/kansai-electric-power-co-inc" target="_blank" data-smartkarma-citation="entities:18907:1" rel="noopener">Kansai Electric Power (9503 JP)</a>. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/161/042/original/2020-09-24_05-33-51.png?1600893369" class="editor-image img-responsive" data-smartkarma-image-id="161042"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/161/043/original/2020-09-24_05-35-52.png?1600893382" class="editor-image img-responsive" data-smartkarma-image-id="161043"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div><hr><p style="text-align: center;"><strong>DAILY STATS</strong></p><hr><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/161/044/original/2020-09-24_05-38-13.png?1600893505" class="editor-image img-responsive" data-smartkarma-image-id="161044"></figure><p><strong><a href="https://www.smartkarma.com/entities/mitsuba-corp" target="_blank" data-smartkarma-citation="entities:1323:1" rel="noopener">Mitsuba (7280 JP)</a></strong>- The <a href="https://www.smartkarma.com/entities/honda-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:154:1" rel="noopener">Honda</a> supplier Mitsuba was the lone result announced yesterday which was predictably grim. The shares have yet to reach Oversold territory and are below 2008/9 levels in terms of our Relative Price Score. However, with an Enterprise Value of ¥146 billion and a market cap of just ¥17.5 billion, lead banker <a href="https://www.smartkarma.com/entities/concordia-financial-group-ltd" target="_blank" data-smartkarma-citation="entities:22704:1" rel="noopener">Concordia (7186 JP)</a> should be seeking a new 'home' for this business. Honda's stake in Mitsuba is 3.65%, and Nissan's pension fund owns 3.82%.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/161/045/original/2020-09-24_05-40-52.png?1600893673" class="editor-image img-responsive" data-smartkarma-image-id="161045"></figure><hr><p style="text-align: center;"><strong>11 Annual • 5 Interim Forecasts/Revisions</strong></p><ul style="list-style-type: disc;">
<li><p><strong>Annual Forecast/Revision Score:</strong> 36% Positive / 0% Neutral / 64% Negative</p></li>
<li><p><strong>Interim Forecast/Revision Score Change:</strong> 60% Positive / 0% Neutral / 40% Negative</p></li>
<li><p><strong>Average Forecast/Revision Score Change</strong>: -3.6 points</p></li>
</ul><div class="content-caption"><p> </p></div>

• BEST &amp; WORST •Our 'best' and 'worst' pairing from yesterday's announcements is micro-cap home centre Encho (8208 JP) and utility Kansai Electric Power (9503 JP). Source for all charts &amp; tables: Japan AnalyticsDAILY STATSMitsuba (7280 JP)- The Honda supplier Mitsuba was the lone result announced yesterday which was predictably grim. The shares have yet to reach Oversold territory and are below 2008/9 levels in terms of our Relative Price Score. However, with an Enterprise Value of ¥146 billion and a market cap of just ¥17.5 billion, lead banker Concordia (7186 JP) should be seeking a new 'home' for this business. Honda's stake in Mitsuba is 3.65%, and Nissan's pension fund owns 3.82%.11 Annual • 5 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 36% Positive / 0% Neutral / 64% Negative
Interim Forecast/Revision Score Change: 60% Positive / 0% Neutral / 40% Negative
Average Forecast/Revision Score Change: -3.6 points
 

🇯🇵 JAPAN • Results & Revisions 09/​​​​​​​​​​​23 - Grim Mitsuba, Even Encho, KEPCO Loses Steam

Japan

ENCHO CO., LTD. operates a home center chain based in Shizuoka Prefecture.  The Company sells construction materials, lumber, gardening supplies, power tools, metal materials for construction, interior materials, electrical equipment, lamps, automobile parts, and leisure goods based in Shizuoka.  The Company also operates new housing construction and renovation businesses.

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Encho Co Ltd (8208 JP)

🇯🇵 JAPAN • Results & Revisions 10/02 DCM (Under)Bids for Shimachu, Zuiko>Unicharm, Ktk>Canon

• BEST & WORST • The release of earnings announcements, forecasts and revisions was unaffected, and our best and worst pair is medical wear...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 09/23 - Grim Mitsuba, Even Encho, KEPCO Loses Steam

• BEST & WORST • Our 'best' and 'worst' pairing from yesterday's announcements is food and drink retailer Life (8194 JP) and parking lot...

Campbell Gunn

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🇯🇵 JAPAN • Results & Revisions 10/​​​​​02 DCM (Under)Bids for Shimachu, Zuiko>Unicharm, Ktk>Canon

• BEST & WORST • The release of earnings announcements, forecasts and revisions was unaffected, and our best and worst pair is medical wear...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 09/​​​​​​​​​​​23 - Grim Mitsuba, Even Encho, KEPCO Loses Steam

• BEST & WORST • Our 'best' and 'worst' pairing from yesterday's announcements is food and drink retailer Life (8194 JP) and parking lot...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 10/02 DCM (Under)Bids for Shimachu, Zuiko>Unicharm, Ktk>Canon

🇯🇵 JAPAN • Results & Revisions 09/23 - Grim Mitsuba, Even Encho, KEPCO Loses Steam