Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/seino-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:13248:1" rel="noopener">Seino Holdings (9076 JP)</a>, based in Gifu Prefecture (two prefectures east of Kyoto, directly north of Nagoya), is a combination transportation logistics company and car dealer, with a few other local specialties tacked on.It has 10 auto sales branches in Gifu, Shiga (next door between Gifu and Kyoto), Aichi (just south), and Tokyo, plus a unit in the Philippines, and together they sell about US$1bn of autos a year. Most of its transportation business is warehouses/logistics and truck transport but in the last couple of years it has started executing a "modal shift" to increase domestic transport by rail and ship. It has started working with partners to reduce its carbon footprint in everything it does. <h2>The NEW News</h2>Yesterday, the company reported its <a href="https://www.seino.co.jp/seino/media/pdf-lib/20200513-03.pdf" target="_blank" rel="noopener">full-year earnings</a> (Japanese only) to March 31, with revenue +1.4%yoy, OP -5.7%, and Net Profit +21%.Somewhat unusually, it provided a forecast for the year to March 31, 2021. And it isn't pretty. Revenue is scheduled to drop 10.4%, OP is scheduled to drop nearly 55%, and Net Profit is guided to fall 71%. Given the quantum of this move, and given the fact that few of their customers seem willing to forecast their own revenues, this guidance has to be seen as speculative at best, even though it is the kind of company with extremely stable revenues normally. To mitigate the potential damage from this, the company announced (also only in Japanese) <a href="https://www.seino.co.jp/seino/media/pdf-lib/20200513-05.pdf" target="_blank" rel="noopener">a large buyback</a> today. A very large buyback. It is up to 20 million shares for up to 20 billion yen, to be executed between 14 May 2020 and 23 December 2020. The oddly-specific end-date is somewhat unusual, but it is possible this leaves room to buy back more shares if needed in fiscal Q4 if the shares remain under pressure. This is, after all, a VERY cash-rich company.

Seino Holdings (9076 JP), based in Gifu Prefecture (two prefectures east of Kyoto, directly north of Nagoya), is a combination transportation logistics company and car dealer, with a few other local specialties tacked on.It has 10 auto sales branches in Gifu, Shiga (next door between Gifu and Kyoto), Aichi (just south), and Tokyo, plus a unit in the Philippines, and together they sell about US$1bn of autos a year. Most of its transportation business is warehouses/logistics and truck transport but in the last couple of years it has started executing a "modal shift" to increase domestic transport by rail and ship. It has started working with partners to reduce its carbon footprint in everything it does. The NEW NewsYesterday, the company reported its full-year earnings (Japanese only) to March 31, with revenue +1.4%yoy, OP -5.7%, and Net Profit +21%.Somewhat unusually, it provided a forecast for the year to March 31, 2021. And it isn't pretty. Revenue is scheduled to drop 10.4%, OP is scheduled to drop nearly 55%, and Net Profit is guided to fall 71%. Given the quantum of this move, and given the fact that few of their customers seem willing to forecast their own revenues, this guidance has to be seen as speculative at best, even though it is the kind of company with extremely stable revenues normally. To mitigate the potential damage from this, the company announced (also only in Japanese) a large buyback today. A very large buyback. It is up to 20 million shares for up to 20 billion yen, to be executed between 14 May 2020 and 23 December 2020. The oddly-specific end-date is somewhat unusual, but it is possible this leaves room to buy back more shares if needed in fiscal Q4 if the shares remain under pressure. This is, after all, a VERY cash-rich company. 

Seino Holdings (9076) - Delivering Cash Back in BIG BUYBACK, May Be an MBO Candidate

'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/000/115/943/original/2020-02-01_07-00-20.png?1580599138" class="editor-image img-responsive" data-smartkarma-image-id="115943"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/115/944/original/2020-02-02_08-38-57.png?1580600364" class="editor-image img-responsive" data-smartkarma-image-id="115944"></figure><div class="content-caption">Source • Japan Analytics</div>30TH JANUARY ROUNDUP - The downward trends in both our Results Score and Forecast/Revision Scores that have been building all week are now more apparent last Friday. On the second-busiest day of this quarter's 'calendar', there were 407 results and 114 forecasts or revisions announcements. The Results Score declined by nine basis points to 0.68, the lowest since April 2017 while the Forecast/Revision Score fell by 15bps and was last this low in December 2016. The 'upside gap' between the market and both Scores is still larger than at any time since our data series commenced and needs to close further. The Bank of Japan bought ETFs on three days last week and will be back in action on Monday.<hr>• SECTOR TIMELINE •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/115/946/original/2020-02-02_09-01-27.png?1580601710" class="editor-image img-responsive" data-smartkarma-image-id="115946"></figure><div class="content-caption">Source • Japan Analytics</div>SECTOR TIMELINE - This quarter's Sector winners and losers are now emerging.  The former are lead by Banks, Non-Bank Finance, Machinery, Technology Hardware, and Electrical Equipment, with the losers being Transportation, Consumer Services, Healthcare, Utilities and Building Materials.  Of the top ten positive changes in all-cap Results Score on Friday, eight were in the financial sectors. A shift in earnings momentum leadership from consumer to finance and technology-related Sectors is in train.

Source • Japan Analytics30TH JANUARY ROUNDUP - The downward trends in both our Results Score and Forecast/Revision Scores that have been building all week are now more apparent last Friday. On the second-busiest day of this quarter's 'calendar', there were 407 results and 114 forecasts or revisions announcements. The Results Score declined by nine basis points to 0.68, the lowest since April 2017 while the Forecast/Revision Score fell by 15bps and was last this low in December 2016. The 'upside gap' between the market and both Scores is still larger than at any time since our data series commenced and needs to close further. The Bank of Japan bought ETFs on three days last week and will be back in action on Monday.• SECTOR TIMELINE •Source • Japan AnalyticsSECTOR TIMELINE - This quarter's Sector winners and losers are now emerging.  The former are lead by Banks, Non-Bank Finance, Machinery, Technology Hardware, and Electrical Equipment, with the losers being Transportation, Consumer Services, Healthcare, Utilities and Building Materials.  Of the top ten positive changes in all-cap Results Score on Friday, eight were in the financial sectors. A shift in earnings momentum leadership from consumer to finance and technology-related Sectors is in train.

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 31st January ►6861 ▲9433 8473 ▼3099 9062 4922

Independent Insight Provider, Japanese equities, LightStream Research

Scott Foster

Independent Insight Provider, Japanese equities

Equity Bottom-Up

Hitachi Transport System / Equity Bottom-Up

The shares of Hitachi Transport System have had a good run, more than doubling over three years to an all-time high of ¥3,545 on July 2, 2019 before dropping back 11% to close at ¥3,165 on September 27. At this price, they are selling at 16x management's EPS guidance for FY Mar-20 and 1.6x book value as of the end of June. These valuations are near the top of their 5-year ranges, but calculations by Japan Analytics indicate 10% potential upside to a forecast-based no-growth valuation (see charts below). The rise in the share price has been driven by efficiency gains in the company's domestic and global logistics businesses. In the four fiscal years to Mar-19, revenues increased 4.5% to ¥708.8 billion, operating profit increased 45.3% to ¥31.2 billion, the operating margin rose from 3.2% to 4.4%, and ROE rose from 7.6% to 10.2%. In the three months to June, operating profit increased 7.0% year-on-year on a 2.9% decline in revenues. Revenues declined due to a change in the scope of consolidation, declining volumes in the auto parts business and the appreciation of the yen. For FY Mar-20 as a whole, management is guiding for a 1.0% increase in operating profit to ¥31.5 billion on a 1.2% decline in revenues to ¥700 billion, resulting in an operating margin of 4.5%. By FY Mar-22, management expects operating profit to reach ¥36.0 billion on revenues of ¥720 billion, the operating margin rising to 5.0% due to a combination of growth and further improvements in the cost structure.  M&amp;A could lift revenues to ¥800 billion, although the timing of acquisitions and their profitability are uncertain.1Q results suggest that full-year guidance is conservative, while further outsourcing of global supply chain management - perhaps accelerated by the changes forced on supply chains by the trade war - should support management's longer-term plans. The biggest risks to those plans and to investors appear to be recession and yen appreciation.

The shares of Hitachi Transport System have had a good run, more than doubling over three years to an all-time high of ¥3,545 on July 2, 2019 before dropping back 11% to close at ¥3,165 on September 27. At this price, they are selling at 16x management's EPS guidance for FY Mar-20 and 1.6x book value as of the end of June. These valuations are near the top of their 5-year ranges, but calculations by Japan Analytics indicate 10% potential upside to a forecast-based no-growth valuation (see charts below). The rise in the share price has been driven by efficiency gains in the company's domestic and global logistics businesses. In the four fiscal years to Mar-19, revenues increased 4.5% to ¥708.8 billion, operating profit increased 45.3% to ¥31.2 billion, the operating margin rose from 3.2% to 4.4%, and ROE rose from 7.6% to 10.2%. In the three months to June, operating profit increased 7.0% year-on-year on a 2.9% decline in revenues. Revenues declined due to a change in the scope of consolidation, declining volumes in the auto parts business and the appreciation of the yen. For FY Mar-20 as a whole, management is guiding for a 1.0% increase in operating profit to ¥31.5 billion on a 1.2% decline in revenues to ¥700 billion, resulting in an operating margin of 4.5%. By FY Mar-22, management expects operating profit to reach ¥36.0 billion on revenues of ¥720 billion, the operating margin rising to 5.0% due to a combination of growth and further improvements in the cost structure.  M&amp;A could lift revenues to ¥800 billion, although the timing of acquisitions and their profitability are uncertain.1Q results suggest that full-year guidance is conservative, while further outsourcing of global supply chain management - perhaps accelerated by the changes forced on supply chains by the trade war - should support management's longer-term plans. The biggest risks to those plans and to investors appear to be recession and yen appreciation.

Hitachi Transport System (9086 JP): Uptrend Should Resume

TREASURY SHARES IN JAPAN - As a prelude to an upcoming insight on share buybacks in Japan, this note is a fork of <a href="https://www.smartkarma.com/profiles/342" target="_blank" data-smartkarma-citation="accounts:342">Douglas Kim</a> 's quick note on Korean Companies with Highest Levels of Treasury Shares. We highlight the Japanese companies with the highest percentage of Treasury Shares to shares in issue as well as those larger capitalisation stocks that have forgone the pleasure of buybacks.2.7% OF SHARES HELD IN TREASURY - As is the case in Korea, most Japanese companies do not cancel shares after…

TREASURY SHARES IN JAPAN - As a prelude to an upcoming insight on share buybacks in Japan, this note is a fork of Douglas Kim 's quick note on Korean Companies with Highest Levels of Treasury Shares. We highlight the Japanese companies with the highest percentage of Treasury Shares to shares in issue as well as those larger capitalisation stocks that have forgone the pleasure of buybacks.2.7% OF SHARES HELD IN TREASURY - As is the case in Korea, most Japanese companies do not cancel shares after…

Japan: Treasury Share 'Kings' and 'Paupers'

Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

Earnings will start in earnest in the next couple of weeks and so we thought we would take a look at 1- companies that have recently revised full-year EPS guidance 2- names where there is a significant gap between guidance and consensus and 3- names where there is a big variance in consensus estimates.First we looked at names that have revised up full-year EPS guidance in the last 2 months. On the positive side, <a href="https://www.smartkarma.com/entities/359" target="_blank" data-smartkarma-citation="entities:359:1">Japan Post Holdings Co Ltd (6178 JP)</a> revised up EPS guidance by 13%, <a href="https://www.smartkarma.com/entities/638" target="_blank" data-smartkarma-citation="entities:638:1">JX Holdings Inc</a>…

Earnings will start in earnest in the next couple of weeks and so we thought we would take a look at 1- companies that have recently revised full-year EPS guidance 2- names where there is a significant gap between guidance and consensus and 3- names where there is a big variance in consensus estimates.First we looked at names that have revised up full-year EPS guidance in the last 2 months. On the positive side, Japan Post Holdings Co Ltd (6178 JP) revised up EPS guidance by 13%, JX Holdings Inc…

With Earnings About to Start, Names that Have Recently Revised or Have Analysts Still Confused....

Japan

Yamato Holdings Co., Ltd. mainly provides door-to-door parcel delivery services. The Company has developed a nationwide delivery system specializing in time-specified delivery. Yamato Holdings offers moving services and other comprehensive transportation services including logistics services for both domestic and overseas customers as well as financial and autoworks services.

SG Holdings Co., Ltd. offers courier services. The Company provides goods delivery, cargo logistics, goods pickup, and other services. SG Holdings also operates real estate development, human resources management, and other businesses.

Maruwa Unyu Kikan Co. Ltd. provides logistical transportation services. The Company conducts normal temperature logistics, low-temperature food distribution, and pharmaceuticals and medical logistics. Maruwa Unyu Kikan also provides logistics consulting and warehousing services.

Konoike Transport Co Ltd operates production and distribution processes and plant equipment installation service at clients' work cites. Clients range from the basic materials industry to consumer staples, airline and medical industries. The company also operates logistics business domestically and intern ationally.

MITSUI-SOKO Holdings Co., Ltd. provides warehousing and marine, land, and air freight transportation services.  The Company also operates a real estate business of leasing its own land and buildings.

SBS Holdings, Inc. provides integrated logistic services. The Company's services include one-stop marketing such as logistic consulting, logistic management and logistic development, special transportation, and low-temperature logistic. SBS Holdings also offers human resources and information technologies services.

Yasuda Logistics Corp operates warehouses in Tokyo, Yokohama, and their surrounding areas.  The Company also provides trucking services, handles marine cargo, and leases real estate.  The Yasuda Warehouse operates international air, land, and sea intermodal transportation as well.

The Shibusawa Warehouse Co., Ltd. provides warehousing and inland and marine transportation services.  The Company also provides moving services and international transportation services.  The Shibusawa Warehouse operates real estate leasing businesses as well.

AIT CORPORATION provides comprehensive international cargo and container booking services.  The Company mainly operates its business in Japan, China and other major Asian cities.

Chuo Warehouse Co., Ltd., based in Kyoto prefecture, is a warehouse operator specializing in storage of synthetic textiles.  The Company handles imported cargo and operates its business in the Tokai and Tokyo areas as well.

Sinotrans Limited provides integrated logistics services with core service of sea, air, rail and road freight forwarding, express services and shipping agency services.  The Company also provides support services of storage and terminal services, trucking and marine transportation services.

Mainfreight Limited provides and supplies freight, warehousing and logistics services throughout New Zealand and Australia.  The Company provides freight forwarding services by road, rail, sea and air along with providing international freight forwarding services, customs clearance services and specialized handling of hazardous substances.

Compania de Distribucion Integral Logista Holdings, S.A. operates as an international logistical solution provider. The Company offers logistics, parcel and express courier transport, industrial parcel transport, and long distance and full truck load transport management services.

International Distributions Services plc provides postal and delivery services. The Company offers letter and parcel delivery services. International Distributions Services serves consumers, sole traders, SMEs, large businesses, and access operators worldwide.

International Distributions Services (IDS LN)

Blue Dart Express Limited operates a courier service and an integrated express package distribution company.  The Company offers delivery of packages and documents in India and throughout the world.

Atlas Air Worldwide Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides aircraft, crew, commercial and military charter, maintenance, and insurance freighter aircraft to major airlines around the world.

Atlas Air Worldwide Holdings, Inc (AAWW US)

Hub Group, Inc. is a full-service transportation provider, offering intermodal, truck brokerage, and logistics services.  The Company arranges for the movement of its customers' freight in containers and trailers over long distances.  Hub Group operates through a nationwide network of hubs, located near significant concentrations of shipping customers and railheads.

Yunda Holding Co Ltd operates as a holding company. The Company, through its subsidiaries, provides industrial investment, enterprise management, business consulting, car rental, technical development, information technology, and advertising services. Yunda Holding serves customers in China.

ID Logistics Group offers various logistics services. The Company provides warehousing, supply chain, storage and transportation solutions.

Oesterreichische Post AG offers mail delivery services.  The Company delivers mail and parcels and operates post offices.

Nippon Express Holdings, Inc. offers logistics services. The Company provides freight vehicle transportation, railway transportation, air transportation, sea transportation, port transportation, warehousing, and other services. Nippon Express Holdings provides its services throughout Japan.

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Nippon Express Holdings (9147 JP)

Seino Holdings (9076) - Delivering Cash Back in BIG BUYBACK, May Be an MBO Candidate

Seino Holdings (9076 JP), based in Gifu Prefecture (two prefectures east of Kyoto, directly north of Nagoya), is a combination transportation...

Travis Lundy

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 31st January ►6861 ▲9433 8473 ▼3099 9062 4922

30TH JANUARY ROUNDUP - The downward trends in both our Results Score and Forecast/Revision Scores that have been building all week are now more...

Campbell Gunn

Hitachi Transport System (9086 JP): Uptrend Should Resume

The shares of Hitachi Transport System have had a good run, more than doubling over three years to an all-time high of ¥3,545 on July 2, 2019...

Scott Foster

With Earnings About to Start, Names that Have Recently Revised or Have Analysts Still Confused....

Earnings will start in earnest in the next couple of weeks and so we thought we would take a look at 1- companies that have recently revised...

Custom Products Group

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Seino Holdings (9076) - Delivering Cash Back in BIG BUYBACK, May Be an MBO Candidate

Seino Holdings (9076 JP), based in Gifu Prefecture (two prefectures east of Kyoto, directly north of Nagoya), is a combination transportation...

Travis Lundy

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 31st January ►6861 ▲9433 8473 ▼3099 9062 4922

30TH JANUARY ROUNDUP - The downward trends in both our Results Score and Forecast/Revision Scores that have been building all week are now more...

Campbell Gunn

Hitachi Transport System (9086 JP): Uptrend Should Resume

The shares of Hitachi Transport System have had a good run, more than doubling over three years to an all-time high of ¥3,545 on July 2, 2019...

Scott Foster

Japan: Treasury Share 'Kings' and 'Paupers'

TREASURY SHARES IN JAPAN - As a prelude to an upcoming insight on share buybacks in Japan, this note is a fork of Douglas Kim 's quick note on...

Campbell Gunn

With Earnings About to Start, Names that Have Recently Revised or Have Analysts Still Confused....

Earnings will start in earnest in the next couple of weeks and so we thought we would take a look at 1- companies that have recently revised...

Custom Products Group