'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)

CAPITAL RAISING - WHOS NEXT? - A number of large capital increases have been announced by large and mid capitalisation Japanese companies in the last few months, the most recent of which have been from <a href="https://www.smartkarma.com/entities/7431" target="_blank" data-smartkarma-citation="entities:7431:1">Outsourcing Inc (2427 JP)</a> and <a href="https://www.smartkarma.com/entities/11796" target="_blank" data-smartkarma-citation="entities:11796:1">Daido Metal (7245 JP)</a>. The response to the dilution has been a predictable decline in share price, although, at least in the case of <a href="https://www.smartkarma.com/entities/7431" target="_blank" data-smartkarma-citation="entities:7431:1">Outsourcing (2427 JP)</a>, a good part of the response occurred before the announcement of the offering, as mentioned in <a href="https://www.smartkarma.com/profiles/713" target="_blank" data-smartkarma-citation="accounts:713">Mio Kato</a>'s note of yesterday - <a href="https://www.smartkarma.com/insights/outsourcing-2427-high-fixed-cost-burden-but-stronger-balance-sheet-opens-up-growth-again" target="_blank" data-smartkarma-citation="insights:23864">High Fixed Cost Burden but Stronger Balance Sheet Opens Up Growth Again</a>. In an attempt to suggest which companies are at risk of similar 'surprises', we have compiled a list of companies with similar financial profiles. 17 larger capitalisation and 22 mid capitalisation companies make the 'cut'.

CAPITAL RAISING - WHOS NEXT? - A number of large capital increases have been announced by large and mid capitalisation Japanese companies in the last few months, the most recent of which have been from Outsourcing Inc (2427 JP) and Daido Metal (7245 JP). The response to the dilution has been a predictable decline in share price, although, at least in the case of Outsourcing (2427 JP), a good part of the response occurred before the announcement of the offering, as mentioned in Mio Kato's note of yesterday - High Fixed Cost Burden but Stronger Balance Sheet Opens Up Growth Again. In an attempt to suggest which companies are at risk of similar 'surprises', we have compiled a list of companies with similar financial profiles. 17 larger capitalisation and 22 mid capitalisation companies make the 'cut'.

OPERATING CASH FLOW REBOUNDS HELPED BY WEAKER ¥ - Operating Cash Flow (OCF) for Japan's listed non-financial companies rebounded sharply in the most recent quarter to ¥13.9 trillion, the second highest quarterly total in seven years. As noted in our previous insight, to sustain aggregate OCF of more than ¥10 trillion requires a ¥/US$ exchange rate of over ¥110 and the currency's move from ¥108 to ¥111 clearly had a positive impact on OCF. Accordingly, the sectors with the most significant positive changes in OCF for the quarter were more export-orientated than domestic. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/062/132/original/2018-08-29_11-32-14.png?1535605391" class="editor-image img-responsive" data-smartkarma-image-id="62132"></figure><div class="content-caption">Source: Japan Analytics</div>INVESTING CASH FLOW RETURNS TO NORMAL - Both Inventory and Fixed Asset Cash Flows reverted to their usual pattern of outflows after the largest seasonal Q1 inventory run down in seven years and unusual reduction in fixed asset investment in the previous quarter, although the total amount invested of ¥5.5 trillion was 28% lower than the same quarter last year. In aggregate 34% of Operating Cash Flow was spent during the quarter, with the Auto sector comprising 21% of the total.4.7% FCF YIELD - As a result of the modest amount of new investment, aggregate Free Cash Flow for the quarter totalled ¥9.1 trillion, the second highest quarterly amount in the last thirty years only exceeded by the previous quarter. Trailing-twelve-month (TTM) Free Cash Flow is now ¥27.5 trillion, which is 4.7% of the current market capitalisation of the 3,562 companies and compares favourably with the long-term average FCF yield in the US of 4%.A TON OF FCF - Non-financial Japan has now generated precisely ¥100t in Free Cash Flow over the last seven years, which is 49% of aggregate cumulative Operating Cash Flow.  58% of this Free Cash Flow has been allocated to shareholders, mainly using cash dividends. As noted in our recent insight <a href="https://www.smartkarma.com/insights/japan-share-buybacks-less-than-meets-the-eye" target="_blank" data-smartkarma-citation="insights:22599">Japan: Share Buybacks - Less Than Meets the Eye</a>, buybacks are a small part of the allocation of Free Cash Flow at less than 4%. Although the cumulative change in cash declined from the previous quarter, Japan's corporate cash pile has grown by ¥37 trillion over the last seven years, although this is still less than 10% of current Net Assets.RECORD-HIGH DIVIDENDS - Q2 is the annual dividend 'peak' and this year saw Japanese companies pay out more in one quarter than ever before, all of ¥5.1 trillion. The combined total for the last four quarters is now ¥10.8 trillion which represents 39% of Free Cash Flow for the period and yield on current market capitalisation of 1.9%.RESERVE ADJUSTMENTS CANCEL OUT BUYBACKS - The net change in Equity &amp; Reserves for the quarter was zero as capital increases and reserve adjustments equalled share buybacks. For the last four quarters combined, the net reduction in Equity &amp; Reserves totals only ¥100 billion, less than 0.02% of market capitalisation. SECTORS AND COMPANIES - This insight also covers sector cash flow trends and provides brief highlights of some of the most significant changes in corporate cash flows over the last three months.

OPERATING CASH FLOW REBOUNDS HELPED BY WEAKER ¥ - Operating Cash Flow (OCF) for Japan's listed non-financial companies rebounded sharply in the most recent quarter to ¥13.9 trillion, the second highest quarterly total in seven years. As noted in our previous insight, to sustain aggregate OCF of more than ¥10 trillion requires a ¥/US$ exchange rate of over ¥110 and the currency's move from ¥108 to ¥111 clearly had a positive impact on OCF. Accordingly, the sectors with the most significant positive changes in OCF for the quarter were more export-orientated than domestic. Source: Japan AnalyticsINVESTING CASH FLOW RETURNS TO NORMAL - Both Inventory and Fixed Asset Cash Flows reverted to their usual pattern of outflows after the largest seasonal Q1 inventory run down in seven years and unusual reduction in fixed asset investment in the previous quarter, although the total amount invested of ¥5.5 trillion was 28% lower than the same quarter last year. In aggregate 34% of Operating Cash Flow was spent during the quarter, with the Auto sector comprising 21% of the total.4.7% FCF YIELD - As a result of the modest amount of new investment, aggregate Free Cash Flow for the quarter totalled ¥9.1 trillion, the second highest quarterly amount in the last thirty years only exceeded by the previous quarter. Trailing-twelve-month (TTM) Free Cash Flow is now ¥27.5 trillion, which is 4.7% of the current market capitalisation of the 3,562 companies and compares favourably with the long-term average FCF yield in the US of 4%.A TON OF FCF - Non-financial Japan has now generated precisely ¥100t in Free Cash Flow over the last seven years, which is 49% of aggregate cumulative Operating Cash Flow.  58% of this Free Cash Flow has been allocated to shareholders, mainly using cash dividends. As noted in our recent insight Japan: Share Buybacks - Less Than Meets the Eye, buybacks are a small part of the allocation of Free Cash Flow at less than 4%. Although the cumulative change in cash declined from the previous quarter, Japan's corporate cash pile has grown by ¥37 trillion over the last seven years, although this is still less than 10% of current Net Assets.RECORD-HIGH DIVIDENDS - Q2 is the annual dividend 'peak' and this year saw Japanese companies pay out more in one quarter than ever before, all of ¥5.1 trillion. The combined total for the last four quarters is now ¥10.8 trillion which represents 39% of Free Cash Flow for the period and yield on current market capitalisation of 1.9%.RESERVE ADJUSTMENTS CANCEL OUT BUYBACKS - The net change in Equity &amp; Reserves for the quarter was zero as capital increases and reserve adjustments equalled share buybacks. For the last four quarters combined, the net reduction in Equity &amp; Reserves totals only ¥100 billion, less than 0.02% of market capitalisation. SECTORS AND COMPANIES - This insight also covers sector cash flow trends and provides brief highlights of some of the most significant changes in corporate cash flows over the last three months.

Japan: Quarterly Cash Flow Update - Yen Weakens > Normal Service Resumed

Japan

Nippon Steel Trading Corporation is a trader of steel products. The Company also produces steel bars, steel sheets, plates, fuels, and nonferrous metals. Nippon Steel Trading operates construction, real estate, warehousing, leasing, and transportation businesses.

Nippon Steel Trading Corporation (9810 JP)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Nippon Steel Trading Corporation (9810 JP)

Japan: Capital Raising - Who's Next?

CAPITAL RAISING - WHOS NEXT? - A number of large capital increases have been announced by large and mid capitalisation Japanese companies in the...

Campbell Gunn

Japan: Quarterly Cash Flow Update - Yen Weakens > Normal Service Resumed

OPERATING CASH FLOW REBOUNDS HELPED BY WEAKER ¥ - Operating Cash Flow (OCF) for Japan's listed non-financial companies rebounded sharply in the...

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)