Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/nippon-paint-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7387:1" rel="noopener">Nippon Paint Holdings (4612 JP)</a> has outperformed <a href="https://www.smartkarma.com/entities/kansai-paint-co-ltd" target="_blank" data-smartkarma-citation="entities:13340:1" rel="noopener">Kansai Paint (4613 JP)</a> despite trading in the same sector by a wide margin, mainly due to the difference in the shareholders' composition, sector, and country focus. </p>
<p>Nippon Paint is no longer a Japan-centric company as its biggest country exposure is in China and it has reduced its exposure in the auto sector and focus to ride on property sector growth in China. Kansai Paint, on the other hand, is still a Japan auto-play with Toyota as one of the top customers and also a shareholder. </p>
<p>As long as the auto sector outlook remains sluggish and Chinese property companies keep recording sales increase through its online initiative (Heng Fang Tong), Nippon Paint will continue to outperform Kansai Paint for a while despite the valuation gap between the two of them. </p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/134/665/original/image_89592220921589990154623.png?1589990155" class="editor-image img-responsive" data-smartkarma-image-id="134665"></figure>
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<p>source: Capital IQ</p>
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<p><em>Thanks in advance for reading this insight!  Please give this a thumbs up if you find this useful and follow me on Smartkarma for more original and actionable insights; it's free, anonymous, and helpful. Please also feel free to post a comment or message me directly if you have any queries regarding this insight. Your continuing support renders a continuity of more original and actionable insights. </em></p>
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Nippon Paint Holdings (4612 JP) has outperformed Kansai Paint (4613 JP) despite trading in the same sector by a wide margin, mainly due to the difference in the shareholders' composition, sector, and country focus. 
Nippon Paint is no longer a Japan-centric company as its biggest country exposure is in China and it has reduced its exposure in the auto sector and focus to ride on property sector growth in China. Kansai Paint, on the other hand, is still a Japan auto-play with Toyota as one of the top customers and also a shareholder. 
As long as the auto sector outlook remains sluggish and Chinese property companies keep recording sales increase through its online initiative (Heng Fang Tong), Nippon Paint will continue to outperform Kansai Paint for a while despite the valuation gap between the two of them. 


source: Capital IQ


Thanks in advance for reading this insight!  Please give this a thumbs up if you find this useful and follow me on Smartkarma for more original and actionable insights; it's free, anonymous, and helpful. Please also feel free to post a comment or message me directly if you have any queries regarding this insight. Your continuing support renders a continuity of more original and actionable insights. 


Nippon Paint (4612) Vs Kansai Paint (4613): Gap to Last

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>Upside momentum continues to wane for global equities. Price action this week has indeed confirmed lower highs for now in the MSCI ACWI, ACWI ex-US, EAFE, and EM indexes. These lower highs increase the probability for breakdowns and a deeper pullback, but we do not want to get ahead of ourselves. Until we see breakdowns we still view global equities as being in a period of consolidation. We outline important technical levels across markets and highlight actionable set ups within Technology, Health care and Staples.</p>

Upside momentum continues to wane for global equities. Price action this week has indeed confirmed lower highs for now in the MSCI ACWI, ACWI ex-US, EAFE, and EM indexes. These lower highs increase the probability for breakdowns and a deeper pullback, but we do not want to get ahead of ourselves. Until we see breakdowns we still view global equities as being in a period of consolidation. We outline important technical levels across markets and highlight actionable set ups within Technology, Health care and Staples.

Global Equity Strategy: Stay Defensive With Technology, Health Care, Staples

'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/000/117/756/original/2020-02-14_05-11-41.png?1581624901" class="editor-image img-responsive" data-smartkarma-image-id="117756"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/117/760/original/2020-02-14_05-38-10.png?1581626321" class="editor-image img-responsive" data-smartkarma-image-id="117760"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>13TH FEBRUARY ROUNDUP</strong> - The penultimate day of this results 'season' saw 402 results and 224 forecast or revision announcements.  Our results Score lost another 7 basis points; however, positive initial annual forecasts from several December year-end companies including <a href="https://www.smartkarma.com/entities/dentsu-inc" target="_blank" data-smartkarma-citation="entities:12434:1" rel="noopener">Dentsu  (4324 JP)</a>, <a href="https://www.smartkarma.com/entities/unicharm-corp" target="_blank" data-smartkarma-citation="entities:6246:1" rel="noopener">Unicharm (8113 JP)</a>, <a href="https://www.smartkarma.com/entities/asahi-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10482:1" rel="noopener">Asahi Group (2502 JP)</a>, <a href="https://www.smartkarma.com/entities/coca-cola-bottlers-japan" target="_blank" data-smartkarma-citation="entities:20051:1" rel="noopener">Coca Cola Bottlers Japan (2579 JP)</a>, <a href="https://www.smartkarma.com/entities/suntory-beverage-food-ltd" target="_blank" data-smartkarma-citation="entities:8218:1" rel="noopener">Suntory Beverage &amp; Food (2587 JP)</a>, and <a href="https://www.smartkarma.com/entities/mcdonald-s-holdings-co-japan" target="_blank" data-smartkarma-citation="entities:985:1" rel="noopener">Mcdonald's Japan (2702 JP)</a> added 34 bps to the Forecast/Revision Score. <strong>The 'gap' between the two Scores is the largest since mid-2016, and a large gap is a precondition for setting a cycle low. </strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/117/757/original/2020-02-14_05-14-40.png?1581625349" class="editor-image img-responsive" data-smartkarma-image-id="117757"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>SECTOR TIMELINE</strong> - These initial forecasts were the prime driver of the on-day changes in our Sector Timeline, which saw gains for <strong>Restaurants,</strong><strong>Media</strong>, <strong>Food, Beverages &amp; Tobacco</strong>, and <strong>Other Consumer Products</strong>. Time will tell if this optimism is well-founded or not.</p>

Source • Japan Analytics13TH FEBRUARY ROUNDUP - The penultimate day of this results 'season' saw 402 results and 224 forecast or revision announcements.  Our results Score lost another 7 basis points; however, positive initial annual forecasts from several December year-end companies including Dentsu  (4324 JP), Unicharm (8113 JP), Asahi Group (2502 JP), Coca Cola Bottlers Japan (2579 JP), Suntory Beverage &amp; Food (2587 JP), and Mcdonald's Japan (2702 JP) added 34 bps to the Forecast/Revision Score. The 'gap' between the two Scores is the largest since mid-2016, and a large gap is a precondition for setting a cycle low. Source • Japan AnalyticsSECTOR TIMELINE - These initial forecasts were the prime driver of the on-day changes in our Sector Timeline, which saw gains for Restaurants,Media, Food, Beverages &amp; Tobacco, and Other Consumer Products. Time will tell if this optimism is well-founded or not.

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 13th February ▲2587 4612 8113 ▼ 7201 4004 4912

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/115/170/original/2020-01-28_05-14-43.png?1580156104" class="editor-image img-responsive" data-smartkarma-image-id="115170"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>TRACKING RESULTS &amp; REVISIONS</strong> - As the 'season' for quarterly results picks up again, this series of daily insights will summarise the announcements released over the previous twenty-four hours and highlight 'winners' and 'losers' using our scoring methodology for both Results and Revisions. Until the number of daily announcements becomes excessive, we shall focus on companies with a market capitalisation fo over ¥50 billion.</p><p><strong>SCORING METHODOLOGY</strong> - <strong>Results Scores</strong> are calculated using the most recent eight quarters of company data for Revenues, Operating Income and Operating Margin and, for each, measure the rate, degree and consistency of change. The score has a maximum of +30 and a minimum of -30 for each period. The <strong>Forecast/Revision Score</strong> is based on both Annual and Interim period company forecasts and compares changes from previous forecasts as well as against the trailing twelve-month (TTM) or previous first-half results, with annual forecasts being double-weighted. This score also has a maximum of +30 and a minimum of -30 for each period.  The combined<strong> Results &amp; Revision Score (RRS)</strong> is the average of the<strong> Results Score</strong> and the<strong> Forecasts/Revision Score</strong>. These scores are then cap-weight aggregated into Sector and Market Composite Scores for which the seventeen-year track record is shown above.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/115/171/original/2020-01-28_05-28-10.png?1580156919" class="editor-image img-responsive" data-smartkarma-image-id="115171"></figure><div class="content-caption">Source • Japan Analytics/Cabinet Office</div><p><strong>TRENDING LOWER</strong> - Although the<strong> Results Score</strong> has been moving sideways since November, the <strong>Forecast/Revision Score</strong> continues to make new ten-year lows. This downward trend is in accord with the <strong>Cabinet Office Business Conditions Leading Indicator</strong> which reached a new post-GFC low in November, before the impact of the Coronavirus.</p><div class="content-highlight"><p><strong>Note that our Scoring of both Results and Forecasts/Revisions has a strong momentum component which may lead reported earnings which tend to be a lagging indicator, hence the tighter correlations with the Leading Indicator and the market.</strong></p></div>

Source • Japan AnalyticsTRACKING RESULTS &amp; REVISIONS - As the 'season' for quarterly results picks up again, this series of daily insights will summarise the announcements released over the previous twenty-four hours and highlight 'winners' and 'losers' using our scoring methodology for both Results and Revisions. Until the number of daily announcements becomes excessive, we shall focus on companies with a market capitalisation fo over ¥50 billion.SCORING METHODOLOGY - Results Scores are calculated using the most recent eight quarters of company data for Revenues, Operating Income and Operating Margin and, for each, measure the rate, degree and consistency of change. The score has a maximum of +30 and a minimum of -30 for each period. The Forecast/Revision Score is based on both Annual and Interim period company forecasts and compares changes from previous forecasts as well as against the trailing twelve-month (TTM) or previous first-half results, with annual forecasts being double-weighted. This score also has a maximum of +30 and a minimum of -30 for each period.  The combined Results &amp; Revision Score (RRS) is the average of the Results Score and the Forecasts/Revision Score. These scores are then cap-weight aggregated into Sector and Market Composite Scores for which the seventeen-year track record is shown above.Source • Japan Analytics/Cabinet OfficeTRENDING LOWER - Although the Results Score has been moving sideways since November, the Forecast/Revision Score continues to make new ten-year lows. This downward trend is in accord with the Cabinet Office Business Conditions Leading Indicator which reached a new post-GFC low in November, before the impact of the Coronavirus.Note that our Scoring of both Results and Forecasts/Revisions has a strong momentum component which may lead reported earnings which tend to be a lagging indicator, hence the tighter correlations with the Leading Indicator and the market.

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 27th January - Too Early to Call a Bottom

<div class="content-highlight"><p>In my last insight on <a href="https://www.smartkarma.com/entities/nippon-paint-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7387:1" rel="noopener">Nippon Paint Holdings (4612 JP)</a> I discussed how the company is dependant on the Chinese auto sector which some may say it's bottoming out and assuming that the Japanese auto industry is just stagnant. </p></div><p>Toyota, Nissan, Honda, Subaru, Suzuki, Mazda, and Mitsubishi have all reported weaker domestic sales in October 2019. This presents an opportunity for shorting auto suppliers whose share price has recently increase despite the somber outlook. </p><p><a href="https://www.smartkarma.com/entities/sumitomo-electric-industries" target="_blank" data-smartkarma-citation="entities:10496:1" rel="noopener">Sumitomo Electric Industries (5802 JP)</a> , <a href="https://www.smartkarma.com/entities/aisin-seiki-co-ltd" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin Seiki (7259 JP)</a> and <a href="https://www.smartkarma.com/entities/minth-group-ltd" target="_blank" data-smartkarma-citation="entities:9232:1" rel="noopener">Minth Group Ltd (425 HK)</a> are the names for shorting. </p>

In my last insight on Nippon Paint Holdings (4612 JP) I discussed how the company is dependant on the Chinese auto sector which some may say it's bottoming out and assuming that the Japanese auto industry is just stagnant. Toyota, Nissan, Honda, Subaru, Suzuki, Mazda, and Mitsubishi have all reported weaker domestic sales in October 2019. This presents an opportunity for shorting auto suppliers whose share price has recently increase despite the somber outlook. Sumitomo Electric Industries (5802 JP) , Aisin Seiki (7259 JP) and Minth Group Ltd (425 HK) are the names for shorting. 

Japan

NIPPON PAINT HOLDINGS CO., LTD. produces paints for automobiles, ships, and other industrial paints.  The Company also manufactures fine chemicals such as finishing agents and adhesives.

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Nippon Paint Holdings (4612 JP)

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