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

Kansai Paint continues to enjoy strong results in India where subsidiary <a href="https://www.smartkarma.com/entities/10169" target="_blank" data-smartkarma-citation="entities:10169:1">Kansai Nerolac Paints Ltd (KNPL IN)</a> has seen revenue double since 2011 and where net income is set to double relative to FY03/15. With Kansai Nerolac's PE approaching 50x, Kansai Paint's 75% stake is now worth JPY327bn or 45% of the company's JPY722bn market cap. While Kansai Paint's Indian operations have seen OP grow at a 31% CAGR since 4QFY03/14 we nevertheless feel that its subsidiary's inflated multiple represents a downside risk as our analysis suggests that Kansai Paint's valuation is directly impacted by the valuation of Kansai Nerolac.The company has faced several headwinds this year as a crackdown on pollution in China has impacted solvent-based coatings and raw materials costs have pressured margins globally and caused losses in Africa. We believe that these issues should be resolved over the medium-term and should open up further opportunities for the company to increase profitability.

Kansai Paint continues to enjoy strong results in India where subsidiary Kansai Nerolac Paints Ltd (KNPL IN) has seen revenue double since 2011 and where net income is set to double relative to FY03/15. With Kansai Nerolac's PE approaching 50x, Kansai Paint's 75% stake is now worth JPY327bn or 45% of the company's JPY722bn market cap. While Kansai Paint's Indian operations have seen OP grow at a 31% CAGR since 4QFY03/14 we nevertheless feel that its subsidiary's inflated multiple represents a downside risk as our analysis suggests that Kansai Paint's valuation is directly impacted by the valuation of Kansai Nerolac.The company has faced several headwinds this year as a crackdown on pollution in China has impacted solvent-based coatings and raw materials costs have pressured margins globally and caused losses in Africa. We believe that these issues should be resolved over the medium-term and should open up further opportunities for the company to increase profitability.

Kansai Paint: India Drives Growth But Kansai Nerolac's 50x PE Is Also a Risk

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Chartonics flash Tuesday 30 August 2016USD/JPY macro low and position update webcast<div>We have made a USD bull case from JPY 100 or 95 if we broke below 100 with a bull pivot above USD/JPY 101 which was triggered Friday. The bigger test revolves around USD sustainability above 101 and a successful test on the lower 101 pullback zone followed by a move through the second hurdle at 102.70. MT pivot resistance lies at 104 (macro bull targets come in at 110 and 114 with ideal objective at 114/117 in…</div>

Chartonics flash Tuesday 30 August 2016USD/JPY macro low and position update webcastWe have made a USD bull case from JPY 100 or 95 if we broke below 100 with a bull pivot above USD/JPY 101 which was triggered Friday. The bigger test revolves around USD sustainability above 101 and a successful test on the lower 101 pullback zone followed by a move through the second hurdle at 102.70. MT pivot resistance lies at 104 (macro bull targets come in at 110 and 114 with ideal objective at 114/117 in…

USD/JPY Macro Low and Fresh Position Webcast

Japan

MITSUBISHI GAS CHEMICAL COMPANY, INC. produces chemical products such as xylene and methanol.  The Company also manufactures engineering plastics and specialty chemicals.

NOF CORPORATION is a diversified chemical producer whose products include processed oil/fats, explosives and other chemical products. The Company has manufacturing/sales subsidiaries in US, Indonesia and China.

TOKYO OHKA KOGYO CO., LTD. manufactures photoresist for semiconductors.  The Company also manufactures printing materials and semiconductor-assembling machines.

Sumitomo Bakelite Company Limited is an integrated processor of synthetic resins and a member of the Sumitomo Chemical Group.  The Company's products are used in production of electronic components such as semiconductors and circuit boards, and industrial products such as automobiles.

KURARAY CO., LTD. manufactures synthetic and chemical fibers.  The Company provides special resin, man-made leather, fine chemicals, and non-woven fabrics used as apparel and industrial materials.  Kuraray also produces pharmaceutical and medical products such as dialyzers and dental-care products.  The Company focuses on environmentally beneficial products.

Daicel Corporation operates business in celluloid technologies, organic chemicals, high-performance chemicals, polymers and pyrotechnic devices. The Company's products include cellulose acetate, tow for cigarette filters, high-performance chemicals for electronics materials, engineering plastics like liquid crystal polymers (LPC), resin compounds, and automotive airbag inflators.

AIR WATER INC. produces industrial gases such as oxygen, nitrogen, argon, and acetylene.  The Company also sells fuels and processed foods.

SUMITOMO CHEMICAL COMPANY, LIMITED manufactures chemical products.  The Company specializes in basic chemicals, petrochemicals, fine chemicals such as photo-resists, pharmaceutical intermediates, and agrochemicals.  Sumitomo Chemical operates manufacturing plants and sales offices worldwide.

Resonac Holdings Corporation manufactures and distributes chemical products. The Company produces synthetic resins, petrochemical products, inorganics, and other related products. Resonac Holdings also produces ceramics, metals, carbon, electronic materials, and other products.

ADEKA CORPORATION manufactures basic chemicals and foodstuffs.  The Company's products include resin products, insulators, and processed fat/oil products.

Incitec Pivot Limited is a fertilizer manufacturer and supplier, and also a supplier for explosives products and services. The Company has operations throughout the United States, Canada, Mexico and Australia.

Hangzhou Oxygen Plant Group Co.,Ltd. manufactures industrial gas machinery products. The Company produces air separation equipment, small-scale air separation equipment, liquefied nitrogen wash cold boxes, liquefied natural gas separation equipment, and other products. Hangzhou Oxygen Plant Group markets its products worldwide.

Castrol (India) Limited manufactures and markets automotive and industrial lubricants and specialty products. The Company's products include lubricating oils, greases and brake fluids. The Company also manufactures cable filling compounds, jellies, waxes and other items.

Zhejiang Longsheng Group Co., Ltd. manufactures a variety of dyes including high intensity and rapid-dying Lonsperse Dye. The Company sells its products domestically and exports worldwide.

Zhejiang Longsheng Group Co., (600352 CH)

Kumho Petrochemical Co., Ltd. manufactures synthetic rubbers, synthetic resins, and rubber chemicals.  The Company's products include styrene butadiene, acrylonitrile butadiene, polystyrene, expandable polystyrene, and antioxidant.  Kumho Petrochemical provides construction, transportation, and financial services through its subsidiaries.

Quaker Chemical Corporation produces, develops, and markets custom-formulated chemical specialty products.  The Company also provides fluid management services for manufacturers around the world, primarily in the steel, automotive, and can industries.

Huntsman Corporation manufactures differentiated and commodity chemical products.  The Company markets a broad range of chemical products and formulations to a diversified group of consumer and industrial customers. Huntsman's products are used in a range of applications, including those in adhesives, aerospace, automotive, construction products, and consumer products.

Hengyi Petrochemical Co., Ltd. manufactures polyester and other petrochemical products.

Zhejiang Weixing New Building Materials Co.,Ltd. develops, manufactures and sells plastic pipes.  The Company's products include poly propylene random (PPR) pipe, polyethylene (PE) pipe, high density polyethylene (HDPE) pipe, and polybutene (PB) pipe.

Zhejiang Weixing New Bldg Mtls (002372 CH)

SKC Co., Ltd. manufactures a variety of films, including polyester films, silicon coated films, and inkjet films.  The Company also produces chemical products, such as propylene oxide, propylene glycol, and styrene monomer. In addition, SKC provides materials for photovoltaic.

KANSAI PAINT CO., LTD. manufactures and sells a wide range of paints and the related products.  The Company's products are used for automobiles, construction, and ships.

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Kansai Paint (4613 JP)

Kansai Paint: India Drives Growth But Kansai Nerolac's 50x PE Is Also a Risk

Kansai Paint continues to enjoy strong results in India where subsidiary Kansai Nerolac Paints Ltd (KNPL IN) has seen revenue double since 2011 and...

Mio Kato

USD/JPY Macro Low and Fresh Position Webcast

Chartonics flash Tuesday 30 August 2016USD/JPY macro low and position update webcastWe have made a USD bull case from JPY 100 or 95 if we broke...

Thomas Schroeder

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