'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)

<p style="text-align: center;"><strong>• THE POST-COVID ROTATION •</strong></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/191/288/original/2021-02-28_08-38-14.png?1614469105" class="editor-image img-responsive" data-smartkarma-image-id="191288"></figure><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/191/290/original/2021-02-28_08-57-32.png?1614470265" class="editor-image img-responsive" data-smartkarma-image-id="191290"></figure></section></section><section class="figure"><div style="text-align: center;" class="content-caption"> Source for all charts &amp; tables: Japan Analytics</div></section><p><strong>THE 2021 ROTATION ACCELERATES</strong> - As we noted in <a href="https://www.smartkarma.com/insights/japan-the-post-covid-rotation-from-growth-to-value-begins-02-05-results-revisions-update" target="_blank" data-smartkarma-citation="insights:47877" rel="noopener">The Post-COVID Rotation from Growth to Value Begins</a>, the Japanese equity market has been led by overvalued and overvalued for most of the last year overbought high-quality growth companies in the <strong>Technology Hardware</strong>, <strong>Electrical Equipment</strong>, <strong>Internet</strong>, and <strong>Healthcare</strong> Sectors. These companies were deemed to be 'COVID-resistant' and were consistently well-bid regardless of price. The stocks leading this 'charge' were <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 (2413 JP),</a><a href="https://www.smartkarma.com/entities/lasertec-corp" target="_blank" data-smartkarma-citation="entities:4126:1" rel="noopener">Lasertec (6920 JP)</a>, <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" data-smartkarma-citation="entities:15441:1" rel="noopener">MonotaRO (3064 JP)</a>, <a href="https://www.smartkarma.com/entities/chugai-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:4489:1" rel="noopener">Chugai Pharmaceutical (4519 JP)</a>, and <a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec (6594 JP)</a>, while the only cyclical Sector that has seen a major recovery was Energy. Meanwhile, shares in domestically-orientated Sectors and companies heavily exposed to COVID-related delines in business activity languished despite valuations reaching ten or twenty-year lows. </p><p><strong>PEAKED?</strong> - Over the last twenty trading days during which TOPIX reached 1,974.99. The <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> breached 30,000, many of these market leaders have seen a significant correction, while the market has rotated into domestic, cyclical, and financial Sectors - as illustrated by our Sector Relative Price Score timelines in the chart above. In the<strong> DETAIL</strong> Section below, we will review the current market technicals after Friday's 4% N225 decline and look at the leading stocks on both 'sides' of this rotation trade.</p>

• THE POST-COVID ROTATION • Source for all charts &amp; tables: Japan AnalyticsTHE 2021 ROTATION ACCELERATES - As we noted in The Post-COVID Rotation from Growth to Value Begins, the Japanese equity market has been led by overvalued and overvalued for most of the last year overbought high-quality growth companies in the Technology Hardware, Electrical Equipment, Internet, and Healthcare Sectors. These companies were deemed to be 'COVID-resistant' and were consistently well-bid regardless of price. The stocks leading this 'charge' were M3 (2413 JP),Lasertec (6920 JP), MonotaRO (3064 JP), Chugai Pharmaceutical (4519 JP), and Nidec (6594 JP), while the only cyclical Sector that has seen a major recovery was Energy. Meanwhile, shares in domestically-orientated Sectors and companies heavily exposed to COVID-related delines in business activity languished despite valuations reaching ten or twenty-year lows. PEAKED? - Over the last twenty trading days during which TOPIX reached 1,974.99. The Nikkei 225 (NKY INDEX) breached 30,000, many of these market leaders have seen a significant correction, while the market has rotated into domestic, cyclical, and financial Sectors - as illustrated by our Sector Relative Price Score timelines in the chart above. In the DETAIL Section below, we will review the current market technicals after Friday's 4% N225 decline and look at the leading stocks on both 'sides' of this rotation trade.

🇯🇵 JAPAN • The Post-COVID Rotation Accelerates

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Equity Capital Markets

Japan Airport Terminal Co / Equity Capital Markets

<p>Japan Airport Terminal announced a roughly ¥60bn equity offering yesterday as the company seeks to expand its terminals. The balance sheet was not especially strong prior to the offering and with depreciation costs already rising due to previous investments we have some concerns about continued aggressive investment when the demand outlook is so unclear.</p>

Japan Airport Terminal announced a roughly ¥60bn equity offering yesterday as the company seeks to expand its terminals. The balance sheet was not especially strong prior to the offering and with depreciation costs already rising due to previous investments we have some concerns about continued aggressive investment when the demand outlook is so unclear.

Japan Airport Terminal Offering – Remains Perplexingly Pricey

<p>In our final update for this 'season', two more large-cap 'stragglers' reported yesterday, while two more had irregular downward revisions. Our 'best' and 'worst' pairing is <a href="https://www.smartkarma.com/entities/showa-denko-k-k" target="_blank" data-smartkarma-citation="entities:1496:1" rel="noopener">Showa Denko (4004 JP)</a> and <a href="https://www.smartkarma.com/entities/japan-airport-terminal-co" target="_blank" data-smartkarma-citation="entities:18034:1" rel="noopener">Japan Airport Terminal (9706 JP)</a>.     </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/365/original/2021-02-18_06-28-36.png?1613597329" class="editor-image img-responsive" data-smartkarma-image-id="189365"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/366/original/2021-02-18_06-29-35.png?1613597385" class="editor-image img-responsive" data-smartkarma-image-id="189366"></figure></section><div class="content-caption">   Source for all charts &amp; tables: Japan Analytics</div>

In our final update for this 'season', two more large-cap 'stragglers' reported yesterday, while two more had irregular downward revisions. Our 'best' and 'worst' pairing is Showa Denko (4004 JP) and Japan Airport Terminal (9706 JP).        Source for all charts &amp; tables: Japan Analytics

🇯🇵 JAPAN • Results & Revisions Update 02/​​​17 - Showa Denko & Japan Airport Terminal

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.

<div>
<p><a href="https://www.smartkarma.com/entities/ana-holdings-inc" target="_blank" data-smartkarma-citation="entities:5308:1" rel="noopener">Ana Holdings (9202 JP)</a> plans to raise around US$3.2bn following close on the heels of <a href="https://www.smartkarma.com/entities/japan-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1184:1" rel="noopener">Japan Airlines (9201 JP)'s</a> US$1.4bn raise last month.</p>
<p>The stock has performed better than Japan Airlines this year, however, the deal dynamics appear to be less favourable.</p>
</div><div><div id="annotable-executive_summary-2">In this insight, I'll talk about the deal dynamics and run the deal through our ECM framework.</div></div>


Ana Holdings (9202 JP) plans to raise around US$3.2bn following close on the heels of Japan Airlines (9201 JP)'s US$1.4bn raise last month.
The stock has performed better than Japan Airlines this year, however, the deal dynamics appear to be less favourable.
In this insight, I'll talk about the deal dynamics and run the deal through our ECM framework.

ANA Holdings Placement - Bigger but Not Necessarily Better Deal than JAL

<p>Three weeks ago, we said that ANA would a) need more capital and b) probably need more than the ¥200bn that the Nikkei had initially suggested and possibly a lot more. Indeed, it turns out to be a lot more as the final figure is looking like it will clear ¥330bn. The question is, is even that “enough”?</p><p>Our previous insights regarding Japan’s carriers are below:</p><p><a href="https://www.smartkarma.com/insights/ana-a-simple-short-before-the-capital-raise" target="_blank" rel="noopener">ANA – A Simple Short Before the Capital Raise</a></p><p><a href="https://www.smartkarma.com/insights/jal-raising-capital-before-ana" target="_blank" rel="noopener">JAL – Raising Capital Before ANA</a></p><p><a href="https://www.smartkarma.com/insights/jal-cheap-valuation-makes-this-an-easier-decision" target="_blank" rel="noopener">JAL – Cheap Valuation Makes This an Easier Decision</a></p><p><a href="https://www.smartkarma.com/insights/ana-significant-downside-remains" target="_blank" rel="noopener">ANA – Significant Downside Remains</a></p>

Three weeks ago, we said that ANA would a) need more capital and b) probably need more than the ¥200bn that the Nikkei had initially suggested and possibly a lot more. Indeed, it turns out to be a lot more as the final figure is looking like it will clear ¥330bn. The question is, is even that “enough”?Our previous insights regarding Japan’s carriers are below:ANA – A Simple Short Before the Capital RaiseJAL – Raising Capital Before ANAJAL – Cheap Valuation Makes This an Easier DecisionANA – Significant Downside Remains

ANA – As We Suggested the Capital Raise Is Bigger Than the Nikkei Suggested

Japan

Japan Airlines Co. Ltd. provides air transportation services. The Company offers a variety of scheduled  flights and unscheduled flights throughout the world as well as offers air courier services. Japan Airlines also provides tickets, resort hotels, and travel agencies services.

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Japan Airlines (9201 JP)

🇯🇵 JAPAN • The Post-COVID Rotation Accelerates

Over the last 20 trading days during which TOPIX reached 1,974.99, many market leaders have seen a significant correction, and there has been a...

Campbell Gunn

Japan Airport Terminal Offering – Remains Perplexingly Pricey

We question the wisdom of aggressive investment despite an extremely uncertain demand outlook, especially when raising significant equity capital...

Mio Kato

🇯🇵 JAPAN • Results & Revisions Update 02/17 - Showa Denko & Japan Airport Terminal

In our final update for this 'season', two more large-cap 'stragglers' reported yesterday, while two more had irregular downward revisions.

Campbell Gunn

ANA Holdings Placement - Bigger but Not Necessarily Better Deal than JAL

Ana (9202 JP) plans to raise around US$3.2bn following close on the heels of JAL's (9201 JP) US$1.4bn raise last month. ANA has performed better...

Sumeet Singh

ANA – As We Suggested the Capital Raise Is Bigger Than the Nikkei Suggested

ANA's capital raise is finally here, and as we had warned, it turns out to be rather bigger than the ¥200bn the Nikkei had suggested. JAL...

Mio Kato

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

🇯🇵 JAPAN • The Post-COVID Rotation Accelerates

Over the last 20 trading days during which TOPIX reached 1,974.99, many market leaders have seen a significant correction, and there has been a...

Campbell Gunn

Japan Airport Terminal Offering – Remains Perplexingly Pricey

We question the wisdom of aggressive investment despite an extremely uncertain demand outlook, especially when raising significant equity capital...

Mio Kato

🇯🇵 JAPAN • Results & Revisions Update 02/​​​17 - Showa Denko & Japan Airport Terminal

In our final update for this 'season', two more large-cap 'stragglers' reported yesterday, while two more had irregular downward revisions.

Campbell Gunn

ANA Holdings Placement - Bigger but Not Necessarily Better Deal than JAL

Ana (9202 JP) plans to raise around US$3.2bn following close on the heels of JAL's (9201 JP) US$1.4bn raise last month. ANA has performed better...

Sumeet Singh

ANA – As We Suggested the Capital Raise Is Bigger Than the Nikkei Suggested

ANA's capital raise is finally here, and as we had warned, it turns out to be rather bigger than the ¥200bn the Nikkei had suggested. JAL...

Mio Kato

🇯🇵 JAPAN • Results & Revisions Update 02/17 - Showa Denko & Japan Airport Terminal