Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

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

<p>Since the beginning of the COVID-19 pandemic, we have been highlighting the fact that <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a>’s consensus estimates have been out of touch with reality. Just three months ago, consensus 4QFY21 revenue and OP were as high as ¥72.6bn and minus ¥5.9bn respectively.</p>
<p>Yet again, the company delivered disappointing results (4QFY21) with ¥33.5bn revenue, missing the most recent consensus estimate and the company guidance by 22.4% and 30.7% respectively. The company’s 4QFY21 operating loss was ¥26.1bn compared to the latest consensus operating loss estimate of ¥17.1bn and the company guidance of ¥31.6bn.</p>

Since the beginning of the COVID-19 pandemic, we have been highlighting the fact that Oriental Land (4661 JP)’s consensus estimates have been out of touch with reality. Just three months ago, consensus 4QFY21 revenue and OP were as high as ¥72.6bn and minus ¥5.9bn respectively.
Yet again, the company delivered disappointing results (4QFY21) with ¥33.5bn revenue, missing the most recent consensus estimate and the company guidance by 22.4% and 30.7% respectively. The company’s 4QFY21 operating loss was ¥26.1bn compared to the latest consensus operating loss estimate of ¥17.1bn and the company guidance of ¥31.6bn.

<p><a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a> delivered 3QFY21 results late last week with revenue surpassing consensus estimate by more than 13.8%. The company’s 3QFY21 operating profit was ¥4.3bn compared to consensus operating loss estimate of ¥5.0bn. The company’s financial performance is yet to bounce back to the pre-COVID-19 level, as 3QFY21 revenue and OP decreased by 45% and 89.2% YoY respectively.</p>

Oriental Land (4661 JP) delivered 3QFY21 results late last week with revenue surpassing consensus estimate by more than 13.8%. The company’s 3QFY21 operating profit was ¥4.3bn compared to consensus operating loss estimate of ¥5.0bn. The company’s financial performance is yet to bounce back to the pre-COVID-19 level, as 3QFY21 revenue and OP decreased by 45% and 89.2% YoY respectively.

Oriental Land: Over-Optimistic 4QFY21 Consensus

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Thematic (Sector/Industry)

<p style="text-align: center;"><strong>• BEST &amp; WORST • </strong></p><p>Our best and worst mega-cap pair from Thursday's 135 results and 64 forecasts/revisions announcements is <a href="https://www.smartkarma.com/entities/japan-exchange-group-inc" target="_blank" data-smartkarma-citation="entities:11266:1" rel="noopener">Japan Exchange (8697 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a>. Amongst large caps, our picks are <a href="https://www.smartkarma.com/entities/paltac-corporation" target="_blank" data-smartkarma-citation="entities:20014:1" rel="noopener">Paltac (8283 JP)</a> and <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl (4921 JP)</a>. 69% of companies had improved Results Scores, and 68% of annual revisions scored positively.  Only 10% of companies posted quarterly losses.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/303/original/2021-01-29_05-38-04.png?1611866299" class="editor-image img-responsive" data-smartkarma-image-id="185303"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/304/original/2021-01-29_05-38-53.png?1611866346" class="editor-image img-responsive" data-smartkarma-image-id="185304"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/305/original/2021-01-29_05-39-46.png?1611866397" class="editor-image img-responsive" data-smartkarma-image-id="185305"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/185/306/original/2021-01-29_05-42-15.png?1611866547" class="editor-image img-responsive" data-smartkarma-image-id="185306"></figure></section><div class="content-caption">   Source for all charts &amp; tables: Japan Analytics</div>

• BEST &amp; WORST • Our best and worst mega-cap pair from Thursday's 135 results and 64 forecasts/revisions announcements is Japan Exchange (8697 JP) and Tokyo Electron (8035 JP). Amongst large caps, our picks are Paltac (8283 JP) and Fancl (4921 JP). 69% of companies had improved Results Scores, and 68% of annual revisions scored positively.  Only 10% of companies posted quarterly losses.   Source for all charts &amp; tables: Japan Analytics

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​​​​​​​​​28 JPX, TEL, Fancl...

<p style="text-align: center;"><strong>• RELATIVE PRICE SCORE OUTLIERS •</strong></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/304/original/2021-01-18_07-21-17.png?1611015356" class="editor-image img-responsive" data-smartkarma-image-id="183304"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/305/original/2021-01-19_09-18-35.png?1611015525" class="editor-image img-responsive" data-smartkarma-image-id="183305"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div></section><p><strong>POLES APART</strong><strong>&amp; ECHOES OF 2000</strong>- As the Japanese equity market continues to rise the 'spread' between the percentage of listed companies that are OverSold (Relative Price Score &lt;-2.0) and those that are OverBought (RPS &gt; 4.0) remains at extreme levels as does the spread in terms of market weight. 7.2% of listed companies are Oversold; while 2.2% are OverBought, but the latter account for 13.7% of market value; the former just 5.4%. The last time both pairs of metrics were at these levels was the 2000 technology bubble.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/321/original/2021-01-19_10-25-51.png?1611019564" class="editor-image img-responsive" data-smartkarma-image-id="183321"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/323/original/2021-01-19_10-27-10.png?1611019660" class="editor-image img-responsive" data-smartkarma-image-id="183323"></figure></section><p><strong>BLOW OUT</strong> - As was the case in 2000, the total number of Sectors either OverBought or Oversold is also at an extreme level having peaked at 13 in December. This number has been exceeded only twice in the last fifty years  - in December 1999 (16) and February 2000 (14).   </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/363/original/2021-01-19_12-45-46.png?1611027961" class="editor-image img-responsive" data-smartkarma-image-id="183363"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/183/367/original/2021-01-19_13-09-06.png?1611029374" class="editor-image img-responsive" data-smartkarma-image-id="183367"></figure></section><div><p>In the<strong> DETAIL</strong> section below, we provide an update on  Sector, Peer Group and individual company Relative Price Score trends and outliers and make some stock-specific recommendations.</p></div><div><div><div class="content-highlight"><p><strong>THE JAPAN ANALYTICS RELATIVE PRICE SCORE</strong> -  The Relative Price Score (RPS) is a measure of price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices over the last 28 years and 24 months, respectively. As all companies on a comparable scale, 'Overbought' and 'Oversold' outliers and short-term changes in scoring can offer some trading opportunities. The data for all 3,919 currently-listed Companies is cap-weight-aggregated into Relative Price Scores for our 328 Peer Groups and 30 Sectors. The Overbought and Oversold outlier 'thresholds are set' at +4 &amp; -2 for Companies, +3 &amp; -1.5 for Peer Groups and +2 and -1 for Sectors, respectively. These thresholds equate with the top and bottom percentiles of over 3.2 million observations.</p></div></div></div>

• RELATIVE PRICE SCORE OUTLIERS •Source for all charts &amp; tables: Japan AnalyticsPOLES APART&amp; ECHOES OF 2000- As the Japanese equity market continues to rise the 'spread' between the percentage of listed companies that are OverSold (Relative Price Score &lt;-2.0) and those that are OverBought (RPS &gt; 4.0) remains at extreme levels as does the spread in terms of market weight. 7.2% of listed companies are Oversold; while 2.2% are OverBought, but the latter account for 13.7% of market value; the former just 5.4%. The last time both pairs of metrics were at these levels was the 2000 technology bubble.BLOW OUT - As was the case in 2000, the total number of Sectors either OverBought or Oversold is also at an extreme level having peaked at 13 in December. This number has been exceeded only twice in the last fifty years  - in December 1999 (16) and February 2000 (14).   In the DETAIL section below, we provide an update on  Sector, Peer Group and individual company Relative Price Score trends and outliers and make some stock-specific recommendations.THE JAPAN ANALYTICS RELATIVE PRICE SCORE -  The Relative Price Score (RPS) is a measure of price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices over the last 28 years and 24 months, respectively. As all companies on a comparable scale, 'Overbought' and 'Oversold' outliers and short-term changes in scoring can offer some trading opportunities. The data for all 3,919 currently-listed Companies is cap-weight-aggregated into Relative Price Scores for our 328 Peer Groups and 30 Sectors. The Overbought and Oversold outlier 'thresholds are set' at +4 &amp; -2 for Companies, +3 &amp; -1.5 for Peer Groups and +2 and -1 for Sectors, respectively. These thresholds equate with the top and bottom percentiles of over 3.2 million observations.

🇯🇵 JAPAN • January Relative Price Scores -  Actionable Mean Reversion Trades

<ul>
<li>
<a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a>, the operator of Tokyo Disney Resorts, is one of the worse affected in Japan from the COVID-19 crisis as the company had to temporarily close down its theme parks, Tokyo Disneyland and Tokyo DisneySea throughout March-June 2020. Even though the company’s theme parks and hotels reopened on 1<sup>st</sup> of July 2020 (with capacity restrictions), Oriental Land’s revenue for the quarter ended September 2020 was just ¥53.0 billion, compared to ¥128.0 billion in the same period previous year. The quarterly operating loss was ¥8.5 billion compared to an Operating Profit of ¥29.0 billion in the same period of the previous year.</li>
<li>However, things were heading in the right direction since reopening of theme parks as the rate of revenue decline decelerated from 94.9% YoY in 1QFY21 to 58.6% YoY in 2QFY21. The operating loss narrowed from ¥15.6 billion in 1QFY21 to ¥8.9 billion in 2QFY21.</li>
<li>Yesterday, The Japanese government said that they are considering declaring a state of emergency in and around Tokyo area. A state of emergency could enforce another temporary park closure and have a significant impact on the likelihood of meeting Oriental Land’s FY03/21 revenue and OP targets.</li>
</ul>



Oriental Land (4661 JP), the operator of Tokyo Disney Resorts, is one of the worse affected in Japan from the COVID-19 crisis as the company had to temporarily close down its theme parks, Tokyo Disneyland and Tokyo DisneySea throughout March-June 2020. Even though the company’s theme parks and hotels reopened on 1st of July 2020 (with capacity restrictions), Oriental Land’s revenue for the quarter ended September 2020 was just ¥53.0 billion, compared to ¥128.0 billion in the same period previous year. The quarterly operating loss was ¥8.5 billion compared to an Operating Profit of ¥29.0 billion in the same period of the previous year.
However, things were heading in the right direction since reopening of theme parks as the rate of revenue decline decelerated from 94.9% YoY in 1QFY21 to 58.6% YoY in 2QFY21. The operating loss narrowed from ¥15.6 billion in 1QFY21 to ¥8.9 billion in 2QFY21.
Yesterday, The Japanese government said that they are considering declaring a state of emergency in and around Tokyo area. A state of emergency could enforce another temporary park closure and have a significant impact on the likelihood of meeting Oriental Land’s FY03/21 revenue and OP targets.


Oriental Land: Downside Risks Mount as Japan Considers Declaring a State of Emergency

Japan

ORIENTAL LAND CO., LTD. operates Tokyo Disney Resort.  The Company also operates restaurants within the complex and sells Disney merchandise.

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Oriental Land (4661 JP)

Oriental Land: Misses Again

Oriental Land delivered disappointing 4QFY21 results with ¥33.5bn revenue, missing the most recent consensus estimate and the company guidance by...

Oshadhi Kumarasiri

Oriental Land: Over-Optimistic 4QFY21 Consensus

Oriental Land delivered 3QFY21 results late last week with revenue surpassing consensus estimate by more than 13.8%. The company’s 3QFY21 operating...

Oshadhi Kumarasiri

🇯🇵 JAPAN • Results & Revisions 01/28 JPX, TEL, Fancl...

69% of companies had improved Results Scores, and 68% of annual revisions scored positively. Only 10% of companies posted quarterly losses.

Campbell Gunn

🇯🇵 JAPAN • January Relative Price Scores - Actionable Mean Reversion Trades

As the Japanese equity market continues to rise the 'spread' between the percentage of listed companies that are OverSold and those that are...

Campbell Gunn

Oriental Land: Downside Risks Mount as Japan Considers Declaring a State of Emergency

A state of emergency could enforce another temporary park closure and have a significant impact on the likelihood of meeting Oriental Land’s FY03...

Oshadhi Kumarasiri

Price Gauge

52-week Range

Market Cap (USDm)

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Dividend (Yield)

Oriental Land: Misses Again

Oriental Land delivered disappointing 4QFY21 results with ¥33.5bn revenue, missing the most recent consensus estimate and the company guidance by...

Oshadhi Kumarasiri

Oriental Land: Over-Optimistic 4QFY21 Consensus

Oriental Land delivered 3QFY21 results late last week with revenue surpassing consensus estimate by more than 13.8%. The company’s 3QFY21 operating...

Oshadhi Kumarasiri

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​​​​​​​​​28 JPX, TEL, Fancl...

69% of companies had improved Results Scores, and 68% of annual revisions scored positively. Only 10% of companies posted quarterly losses.

Campbell Gunn

🇯🇵 JAPAN • January Relative Price Scores - Actionable Mean Reversion Trades

As the Japanese equity market continues to rise the 'spread' between the percentage of listed companies that are OverSold and those that are...

Campbell Gunn

Oriental Land: Downside Risks Mount as Japan Considers Declaring a State of Emergency

A state of emergency could enforce another temporary park closure and have a significant impact on the likelihood of meeting Oriental Land’s FY03...

Oshadhi Kumarasiri

🇯🇵 JAPAN • Results & Revisions 01/28 JPX, TEL, Fancl...