'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. 

Thematic (Sector/Industry)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/176/original/2020-02-04_04-48-54.png?1580759358" class="editor-image img-responsive" data-smartkarma-image-id="116176"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>3RD FEBRUARY ROUNDUP</strong> - The 107 Results and 44 Forecast/Revision announcements yesterday nudged both our Scores lower again as the Total Market Value reached a three-month low. We expect the Results Score to break below 0.58 and the Forecast/Revision Score to turn negative later in the week.</p><hr><p style="text-align: center;"><strong>• ALL-MARKET COMPOSITE •</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/180/original/2020-02-04_05-29-59.png?1580761820" class="editor-image img-responsive" data-smartkarma-image-id="116180"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>ALL-MARKET COMPOSITE</strong> - As of Friday's close. the aggregate forecast for Operating Income is now ¥800 billion below the TTM results, while the Net Income forecast trails by ¥400 billion. The market's forward PE is still an elevated 16.9x based on a Total Market Value (TMV) of ¥666 trillion.  TTM Net income has declined by 18% in the last twelve months, while the TMV has risen by 19%.</p><hr><p style="text-align: center;"><strong>• SECTOR TIMELINE •</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/177/original/2020-02-04_04-59-01.png?1580759983" class="editor-image img-responsive" data-smartkarma-image-id="116177"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>TIMELINE</strong> - The largest on-day move was from <strong>Non-Bank Finance</strong> following <a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix (8591 JP)</a>'s return to positive earnings momentum. <a href="https://www.smartkarma.com/entities/shionogi-co-ltd" target="_blank" data-smartkarma-citation="entities:19535:1" rel="noopener">Shionogi (4507 JP)</a>' s downward revision continued the downtrend in the <strong>Healthcare</strong> Sector, while <a href="https://www.smartkarma.com/entities/mitsubishi-electric-corp" target="_blank" data-smartkarma-citation="entities:11171:1" rel="noopener">Mitsubishi Electric (6503 JP)</a> put a 'dent' in the recovery of the <strong>Electrical Equipment</strong> Sector.  The Information Technology Sector is also losing momentum, as shown in <a href="https://www.smartkarma.com/entities/otsuka-corp" target="_blank" data-smartkarma-citation="entities:7327:1" rel="noopener">Otsuka (4768 JP)</a>' full-year results and FY2020 forecasts with revenue expected to decline by 3%.</p>

Source • Japan Analytics3RD FEBRUARY ROUNDUP - The 107 Results and 44 Forecast/Revision announcements yesterday nudged both our Scores lower again as the Total Market Value reached a three-month low. We expect the Results Score to break below 0.58 and the Forecast/Revision Score to turn negative later in the week.• ALL-MARKET COMPOSITE •Source • Japan AnalyticsALL-MARKET COMPOSITE - As of Friday's close. the aggregate forecast for Operating Income is now ¥800 billion below the TTM results, while the Net Income forecast trails by ¥400 billion. The market's forward PE is still an elevated 16.9x based on a Total Market Value (TMV) of ¥666 trillion.  TTM Net income has declined by 18% in the last twelve months, while the TMV has risen by 19%.• SECTOR TIMELINE •Source • Japan AnalyticsTIMELINE - The largest on-day move was from Non-Bank Finance following Orix (8591 JP)'s return to positive earnings momentum. Shionogi (4507 JP)' s downward revision continued the downtrend in the Healthcare Sector, while Mitsubishi Electric (6503 JP) put a 'dent' in the recovery of the Electrical Equipment Sector.  The Information Technology Sector is also losing momentum, as shown in Otsuka (4768 JP)' full-year results and FY2020 forecasts with revenue expected to decline by 3%.

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 3rd February ▲8591 6752 3064 ▼6503 4768 6920

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

<p>Monthly chip revenues declined slightly in November, according to the SIA.  This SmartKarma Insight examines recently-reported industry revenues to see how they compare with the long-term trend and to understand whether or not the current uptick is likely to continue.  The conclusion is that today's market is higher than it would be if the China-US trade war were not a concern.  A mid-2020 collapse is more than likely.</p>

Monthly chip revenues declined slightly in November, according to the SIA.  This SmartKarma Insight examines recently-reported industry revenues to see how they compare with the long-term trend and to understand whether or not the current uptick is likely to continue.  The conclusion is that today's market is higher than it would be if the China-US trade war were not a concern.  A mid-2020 collapse is more than likely.

November Semiconductor Stats Good, But China Inventory Build May Be Misleading

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<p><a href="https://www.smartkarma.com/entities/7797" target="_blank" data-smartkarma-citation="entities:7797:1">Hitachi Ltd (6501 JP)</a> announced the acquisition of an 80.1% stake in <a href="https://www.smartkarma.com/entities/22568" target="_blank" data-smartkarma-citation="entities:22568:1">ABB Ltd (ABBN VX)</a>’s power grids business for $6.4 billion. ABB will retain the remaining stake in the divested unit, which is valued at an EV of $11 billion. ABB’s power grids is a global #1 player and makes transformers, long distance electricity-transmission systems and energy storage units.</p><div class="content-highlight"><p>Setting aside the huge cultural and integration challenges, we believe that Hitachi’s acquisition of ABB’s power grids is a bold but a risky move.</p></div>

Hitachi Ltd (6501 JP) announced the acquisition of an 80.1% stake in ABB Ltd (ABBN VX)’s power grids business for $6.4 billion. ABB will retain the remaining stake in the divested unit, which is valued at an EV of $11 billion. ABB’s power grids is a global #1 player and makes transformers, long distance electricity-transmission systems and energy storage units.Setting aside the huge cultural and integration challenges, we believe that Hitachi’s acquisition of ABB’s power grids is a bold but a risky move.

Hitachi (6501 JP): A Bold but Risky Acquisition of ABB’s Power Grids

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<p><a href="https://www.smartkarma.com/entities/15895" target="_blank" data-smartkarma-citation="entities:15895:1">Pioneer Corp (6773 JP)</a> has been under the cosh for years, and multiple self-directed rescue efforts have been to no avail. In early September it was <a href="https://global.pioneer/en/news/press/2018/pdf/0907-1.pdf" target="_blank">revealed</a> that Pioneer had sold its Tohoku Pioneer subsidiary to <a href="https://www.smartkarma.com/entities/18703" target="_blank" data-smartkarma-citation="entities:18703:1">Denso Corp (6902 JP)</a> for ¥10.9bn, and less than a week later it was revealed in the Nikkei, then the Japan Times that Pioneer was going to get a short-term loan of ¥25bn from Baring Private Equity Asia leading to an equity injection of ¥50-60bn a few months later in December 2018. </p><p>The <a href="https://global.pioneer/en/news/press/2018/pdf/0912-1.pdf" target="_blank">announcement</a> of the MOU was effectively the commencement of the final death throes of Pioneer as a company. Pioneer set a record date at the time, then in November changed the record date to 7 December.</p><h2>The New News</h2><p>On Friday 7th December Pioneer announced a "<a href="https://global.pioneer/en/ir/announcements/" target="_blank">Partnership</a>" with Baring Private Equity Asia which is a revitalization plan of ¥102 billion. </p><p>The Partnership  announcement makes note of the Baring investment. It mentions that the deal will offer to offer minority shareholders an exit. There is a finalization of the 7 Dec record date and a call to an EGM to approve share issuance and debt/equity swap to Baring. The announcement does not mention investors are effectively being asked to approve their own squeezeout at 25% below the last price.</p>

Pioneer Corp (6773 JP) has been under the cosh for years, and multiple self-directed rescue efforts have been to no avail. In early September it was revealed that Pioneer had sold its Tohoku Pioneer subsidiary to Denso Corp (6902 JP) for ¥10.9bn, and less than a week later it was revealed in the Nikkei, then the Japan Times that Pioneer was going to get a short-term loan of ¥25bn from Baring Private Equity Asia leading to an equity injection of ¥50-60bn a few months later in December 2018. The announcement of the MOU was effectively the commencement of the final death throes of Pioneer as a company. Pioneer set a record date at the time, then in November changed the record date to 7 December.The New NewsOn Friday 7th December Pioneer announced a "Partnership" with Baring Private Equity Asia which is a revitalization plan of ¥102 billion. The Partnership  announcement makes note of the Baring investment. It mentions that the deal will offer to offer minority shareholders an exit. There is a finalization of the 7 Dec record date and a call to an EGM to approve share issuance and debt/equity swap to Baring. The announcement does not mention investors are effectively being asked to approve their own squeezeout at 25% below the last price.

Barring Beleaguered Booster Boldness, Baring Buys Pioneer (In a Takeunder)

<p><em>Part 2 of comments on King Street's deck </em><a href="https://www.unlockingtoshibavalue.com/assets/toshibapres.pdf" target="_blank">Toshiba | Unlocking Value</a><em> of October 3rd.</em></p>
<p>Part 1 was in <a href="https://www.smartkarma.com/insights/toshiba-king-street-s-buyback-proposals-lack-required-detail" target="_blank" data-smartkarma-citation="insights:24727">Toshiba: King Street's Buyback Proposals Lack Required Detail</a>.</p>
<p>Part 2 addresses the Valuation Analysis inputs and assumptions, including their structure and lack of complement. One could think that Newton's Third Law, or the concept of double-entry bookkeeping, have some application when applying dramatic changes to a company's balance sheet or cashflows. There are offsets to actions taken. The deck seems to avoid talking about some of the ugly parts so I do.</p>
<p><a href="https://www.smartkarma.com/profiles/713" target="_blank" data-smartkarma-citation="accounts:713">Mio Kato, CFA</a> takes a somewhat different tack in looking at the assumptions in his piece <a href="https://www.smartkarma.com/insights/toshiba-king-street-assumptions-look-exceedingly-optimistic" target="_blank" data-smartkarma-citation="insights:24719">Toshiba: King Street Assumptions Look Exceedingly Optimistic</a>, and that too is worth a read. </p>
<p></p>
<p>Earlier pieces include:</p>
<table class="table table-striped">
<tbody>
<tr>
<td>Date</td>
<td>Title</td>
</tr>
<tr>
<td>21 May 2018</td>
<td><a href="https://www.smartkarma.com/insights/modelling-out-toshiba-s-return-of-capital-to-shareholders" target="_blank" data-smartkarma-citation="insights:20544">Modelling Out Toshiba's "Return of Capital to Shareholders"</a></td>
</tr>
<tr>
<td>2 June 2018</td>
<td>
<p><a href="https://www.smartkarma.com/insights/new-clarity-on-toshiba-s-return-of-capital-to-shareholders" target="_blank">New Clarity on Toshiba’s “Return of Capital to Shareholders”</a></p>
</td>
</tr>
<tr>
<td>13 June 2018</td>
<td><a href="https://www.smartkarma.com/insights/toshiba-700-billion-buyback-bigger-better-faster-stronger" target="_blank">Toshiba ¥700 Billion Buyback - Bigger*, Better, Faster, Stronger</a></td>
</tr>
<tr>
<td>5 October 2018</td>
<td><a href="https://www.smartkarma.com/insights/toshiba-king-street-s-buyback-proposals-lack-required-detail" target="_blank" data-smartkarma-citation="insights:24727">Toshiba: King Street's Buyback Proposals Lack Required Detail</a></td>
</tr>
</tbody>
</table>


Part 2 of comments on King Street's deck Toshiba | Unlocking Value of October 3rd.
Part 1 was in Toshiba: King Street's Buyback Proposals Lack Required Detail.
Part 2 addresses the Valuation Analysis inputs and assumptions, including their structure and lack of complement. One could think that Newton's Third Law, or the concept of double-entry bookkeeping, have some application when applying dramatic changes to a company's balance sheet or cashflows. There are offsets to actions taken. The deck seems to avoid talking about some of the ugly parts so I do.
Mio Kato, CFA takes a somewhat different tack in looking at the assumptions in his piece Toshiba: King Street Assumptions Look Exceedingly Optimistic, and that too is worth a read. 

Earlier pieces include:



Date
Title


21 May 2018
Modelling Out Toshiba's "Return of Capital to Shareholders"


2 June 2018

New Clarity on Toshiba’s “Return of Capital to Shareholders”



13 June 2018
Toshiba ¥700 Billion Buyback - Bigger*, Better, Faster, Stronger


5 October 2018
Toshiba: King Street's Buyback Proposals Lack Required Detail





Toshiba: King Street's Valuation Analysis Is... Punchy?

Japan

Mitsubishi Electric Corporation develops, manufactures, and markets electronic equipment.  The Company's products include industrial machinery, heavy electric machinery, data communications systems, electronic devices, and consumer electronics.

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Mitsubishi Electric (6503 JP)

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 3rd February ▲8591 6752 3064 ▼6503 4768 6920

3RD FEBRUARY ROUNDUP - The 107 Results and 44 Forecast/Revision announcements yesterday nudged both our Scores lower again as the Total Market...

Campbell Gunn

November Semiconductor Stats Good, But China Inventory Build May Be Misleading

Monthly chip revenues declined slightly in November, according to the SIA. This SmartKarma Insight examines recently-reported industry revenues to...

Jim Handy

Hitachi (6501 JP): A Bold but Risky Acquisition of ABB’s Power Grids

Hitachi Ltd (6501 JP) announced the acquisition of an 80.1% stake in ABB Ltd (ABBN VX)’s power grids business for $6.4 billion. ABB will retain the...

Arun George

Barring Beleaguered Booster Boldness, Baring Buys Pioneer (In a Takeunder)

Pioneer Corp (6773 JP) has been under the cosh for years, and multiple self-directed rescue efforts have been to no avail. In early September it...

Travis Lundy

Toshiba: King Street's Valuation Analysis Is... Punchy?

Part 2 of comments on King Street's deck Toshiba | Unlocking Value of October 3rd. Part 1 was in Toshiba: King Street's Buyback Proposals Lack...

Travis Lundy

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