'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Thematic (Sector/Industry)

<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/145/201/original/File%202020-07-10%204%2058%2031.jpeg?1594328270" class="editor-image img-responsive" data-smartkarma-image-id="145201"></figure><div class="content-caption">Source • Our World In Data</div>
COVID-19 RETURNS - The other 'result' reported yesterday was the record daily COVID-19 new case count for Tokyo of 224 and a three-month nationwide high of 354. Japan's 7-day rolling average is now close to that of Italy. Although hospital capacity is no longer an issue and only 216 people are in critical care, the pace of normalisation will have to be readjusted.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/145/202/original/2020-07-10_06-33-39.png?1594330447" class="editor-image img-responsive" data-smartkarma-image-id="145202"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/145/203/original/2020-07-10_06-37-00.png?1594330642" class="editor-image img-responsive" data-smartkarma-image-id="145203"></figure><div class="content-caption">Source • Japan Analytics</div>
NEW LOWS - With three large retailers reporting weak quarters, both our Results Score and Interim Forecast/Revision Score reached new ten-year lows. The Annual Forecast/Revision Score is flattered by a high degree of forecasting reticence at present. The Cabinet Office Leading Indicator of Business Conditions suggests that these Scores will close the 'gap' to the 2009 lows in the next month.
DAILY STATS
</div><hr><div>31 Quarterly Results</div><div><ul>
<li>
Results Score: 7 Positive / 0 Neutral / 24 Negative</li>
<li>
Average Results Score Change: -4.9</li>
<li>
Average % Change in Revenue: -9.6% Quarter YoY / +1.4% Rolling TTM YoY</li>
<li>
Average Operating Profit Margin Change: -0.9ppt</li>
</ul></div><hr><div> 12 Annual • 3 Interim Forecasts/Revisions</div><div><ul>
<li>
Annual Forecast/Revision Score: 5 Positive / 0 Neutral / 7 Negative</li>
<li>
Interim Forecast/Revision Score Change: 1 Positive / 0 Neutral / 2 Negative</li>
<li>
Average Forecast/Revision Score Change: -4.5</li>
</ul></div>


Source • Our World In Data
COVID-19 RETURNS - The other 'result' reported yesterday was the record daily COVID-19 new case count for Tokyo of 224 and a three-month nationwide high of 354. Japan's 7-day rolling average is now close to that of Italy. Although hospital capacity is no longer an issue and only 216 people are in critical care, the pace of normalisation will have to be readjusted.
Source • Japan Analytics
NEW LOWS - With three large retailers reporting weak quarters, both our Results Score and Interim Forecast/Revision Score reached new ten-year lows. The Annual Forecast/Revision Score is flattered by a high degree of forecasting reticence at present. The Cabinet Office Leading Indicator of Business Conditions suggests that these Scores will close the 'gap' to the 2009 lows in the next month.
DAILY STATS
31 Quarterly Results

Results Score: 7 Positive / 0 Neutral / 24 Negative

Average Results Score Change: -4.9

Average % Change in Revenue: -9.6% Quarter YoY / +1.4% Rolling TTM YoY

Average Operating Profit Margin Change: -0.9ppt
 12 Annual • 3 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 5 Positive / 0 Neutral / 7 Negative

Interim Forecast/Revision Score Change: 1 Positive / 0 Neutral / 2 Negative

Average Forecast/Revision Score Change: -4.5


🇯🇵 JAPAN • Results & Revisions 9th July - COVID-19 Returns & New Lows

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

In January this year, <a href="https://www.smartkarma.com/entities/shimachu-co-ltd" target="_blank" data-smartkarma-citation="entities:5235:1" rel="noopener">Shimachu Co Ltd (8184 JP)</a> made an <a href="https://ssl4.eir-parts.net/doc/8184/ir_material3/132556/00.pdf" target="_blank" rel="noopener">announcement</a> of a buyback of up to ¥10bn, buying back up to 4.2mm shares which was 9.9% of the company over the next seven months. I analysed the prospects of the buyback and the company's interesting history of buybacks, and what it meant for trading/execution strategy in <a href="https://www.smartkarma.com/insights/big-shimachu-8184-buyback-an-interesting-trade-profile" target="_blank" data-smartkarma-citation="insights:35726" rel="noopener">BIG Shimachu (8184) Buyback - An Interesting Trade Profile</a> at the time, suggesting they'd only buy 10% of float. <blockquote>
It comes out to 10% of expected ADV from here to end-August - the timeframe of the buyback, but historical buyback patterns show a pattern of buying a higher percentage of market volume in a shorter period. All the previous buybacks have finished well before the allotted timeframe end and have usually completed in 3-4 months. 
Given past patterns, I would expect the buyback to be 15-20+% of ADV for the foreseeable future, possibly going slow in the rest of January then picking up with a vengeance in February.
</blockquote>In fact, the company bought back 60bp of shares out in the first month, then proceeded to speed things up. Today, four months and small change after the announcement, the company <a href="https://ssl4.eir-parts.net/doc/8184/tdnet/1836100/00.pdf" target="_blank" rel="noopener">announced</a> it had completed the buyback.The first piece provided a strategy for dealing with the buyback during the life of the buyback AND for after the end of the buyback. In this insight we look at what happened, where we are left, and what comes next.

In January this year, Shimachu Co Ltd (8184 JP) made an announcement of a buyback of up to ¥10bn, buying back up to 4.2mm shares which was 9.9% of the company over the next seven months. I analysed the prospects of the buyback and the company's interesting history of buybacks, and what it meant for trading/execution strategy in BIG Shimachu (8184) Buyback - An Interesting Trade Profile at the time, suggesting they'd only buy 10% of float. 
It comes out to 10% of expected ADV from here to end-August - the timeframe of the buyback, but historical buyback patterns show a pattern of buying a higher percentage of market volume in a shorter period. All the previous buybacks have finished well before the allotted timeframe end and have usually completed in 3-4 months. 
Given past patterns, I would expect the buyback to be 15-20+% of ADV for the foreseeable future, possibly going slow in the rest of January then picking up with a vengeance in February.
In fact, the company bought back 60bp of shares out in the first month, then proceeded to speed things up. Today, four months and small change after the announcement, the company announced it had completed the buyback.The first piece provided a strategy for dealing with the buyback during the life of the buyback AND for after the end of the buyback. In this insight we look at what happened, where we are left, and what comes next.

Shimachu's Buyback Is Done But The Trade Is Not Done

On Thursday 9 January 2020 (can't believe I am writing that year), furniture and home center retailer <a href="https://www.smartkarma.com/entities/shimachu-co-ltd" target="_blank" data-smartkarma-citation="entities:5235:1" rel="noopener">Shimachu Co Ltd (8184 JP)</a><a href="https://ssl4.eir-parts.net/doc/8184/tdnet/1782479/00.pdf" target="_blank" rel="noopener">announced</a> (Japanese only) a very large buyback program. This caused the stock price to jump on the first day after the news by 10.4%. The official parameters of the buyback are that the company will spend up to ¥10 billion buying up to 4.2 million shares, which comes to 9.9% of shares outstanding less treasury shares. The buyback will be conducted on-market, with the buyback period running from today through 31 August 2020.Given the share price pop, and the fact that the limit is ¥10 billion to be spent, one can expect that the percentage of shares to be bought back will be something on the order of 6.0-7.5%. If you have cares in the name, or in the habits of this companies buybacks, read on.

On Thursday 9 January 2020 (can't believe I am writing that year), furniture and home center retailer Shimachu Co Ltd (8184 JP)announced (Japanese only) a very large buyback program. This caused the stock price to jump on the first day after the news by 10.4%. The official parameters of the buyback are that the company will spend up to ¥10 billion buying up to 4.2 million shares, which comes to 9.9% of shares outstanding less treasury shares. The buyback will be conducted on-market, with the buyback period running from today through 31 August 2020.Given the share price pop, and the fact that the limit is ¥10 billion to be spent, one can expect that the percentage of shares to be bought back will be something on the order of 6.0-7.5%. If you have cares in the name, or in the habits of this companies buybacks, read on.

BIG Shimachu (8184) Buyback - An Interesting Trade Profile

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

When Japan's purveyor of hardy clothing and gear for labourers and plumbers became a hit with pregnant women, it was clear that <a href="https://www.smartkarma.com/entities/workman-co-ltd" target="_blank" data-smartkarma-citation="entities:8467:1" rel="noopener">Workman Co Ltd (7564 JP)</a> had successfully bridged the divide between workwear and the wider consumer market.
As a result, Workman’s share price broke ¥10,000 for the first time in mid-December and, as of today, remains above that threshold.
This reflects the extraordinary success of the Beisia-controlled retailer since it launched its consumer-targeted chain, Workman Plus, in October 2018, with same-store sales late last year rising by more than 20% after similar 20%+ increases in the same months the year before.
Its success has spawned new competitors, including from Fast Retailing and home centre retailers like Shimachu and Workman's sister chain, Cainz.
Workman, however, has a strong lead and keeps innovating. As <a href="https://www.smartkarma.com/profiles/oshadhi-kumarasiri" target="_blank" data-smartkarma-citation="accounts:3584" rel="noopener">Oshadhi Kumarasiri</a> pointed quite rightly out in his note <a href="https://www.smartkarma.com/insights/workman-s-work-is-done-and-it-is-time-to-send-him-home" target="_blank" rel="noopener">here</a>, Workman's share price looks expensive but over a five-year time frame, Workman is likely to fulfil all expectations.
The key to future growth is its private brands: Workman's own label merchandise still only accounts for 44% of sales but the ratio is rising fast. Its future success or failure will rest on its ability to generate new lines that appeal to general consumers and outdo the competition – including France's Decathlon chain – including pregnant women of course.
In the end, what makes Workman unique is the absolute integrity of its brand and provenance: No other brand can claim to offer high quality, high function items that have withstood the harsh-use environments of construction workers and fishermen for the last two decades – and at such genuinely low prices.
Japan's seemingly unquenchable thirst for real cost performance product is, in this case, perfectly matched by supply.

When Japan's purveyor of hardy clothing and gear for labourers and plumbers became a hit with pregnant women, it was clear that Workman Co Ltd (7564 JP) had successfully bridged the divide between workwear and the wider consumer market.
As a result, Workman’s share price broke ¥10,000 for the first time in mid-December and, as of today, remains above that threshold.
This reflects the extraordinary success of the Beisia-controlled retailer since it launched its consumer-targeted chain, Workman Plus, in October 2018, with same-store sales late last year rising by more than 20% after similar 20%+ increases in the same months the year before.
Its success has spawned new competitors, including from Fast Retailing and home centre retailers like Shimachu and Workman's sister chain, Cainz.
Workman, however, has a strong lead and keeps innovating. As Oshadhi Kumarasiri pointed quite rightly out in his note here, Workman's share price looks expensive but over a five-year time frame, Workman is likely to fulfil all expectations.
The key to future growth is its private brands: Workman's own label merchandise still only accounts for 44% of sales but the ratio is rising fast. Its future success or failure will rest on its ability to generate new lines that appeal to general consumers and outdo the competition – including France's Decathlon chain – including pregnant women of course.
In the end, what makes Workman unique is the absolute integrity of its brand and provenance: No other brand can claim to offer high quality, high function items that have withstood the harsh-use environments of construction workers and fishermen for the last two decades – and at such genuinely low prices.
Japan's seemingly unquenchable thirst for real cost performance product is, in this case, perfectly matched by supply.

Workman: Success Attracts New Competitors but in the Long-Term Workman Still Wins

Director, Pearl Hill Advisors

Nicholas Tanner

Director

Pearl Hill Advisors

Foreigners own 50% of this name. Although earnings have gone nowhere, and it looks like this will remain the case, the company is cash rich, has been cash flow positive, owns just under 10% in itself and trades at 0.65x book. As such it’s a buy for those with patience and who buy value. Unlocking this may take time, although management are aware of the need to improve returns to shareholders given the uninspiring market in which they operate.This is a furniture (30% of sales) and home centre…

Foreigners own 50% of this name. Although earnings have gone nowhere, and it looks like this will remain the case, the company is cash rich, has been cash flow positive, owns just under 10% in itself and trades at 0.65x book. As such it’s a buy for those with patience and who buy value. Unlocking this may take time, although management are aware of the need to improve returns to shareholders given the uninspiring market in which they operate.This is a furniture (30% of sales) and home centre…

Shimachu (8184) Very Cheap but Where Is It Going ?

Japan

SHIMACHU CO., LTD. operates a furniture store chain and a home center chain based in Saitama Prefecture and the Tokyo metropolitan area.  The Company sells assembly required or Do-It-Yourself goods, household utensils, gardening tools, sporting goods, and leisure items.

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

Shimachu Co Ltd (8184 JP)

🇯🇵 JAPAN • Results & Revisions 9th July - COVID-19 Returns & New Lows

COVID-19 RETURNS - The other 'result' reported yesterday was the record daily COVID-19 new case count for Tokyo of 224 and a three-month...

Campbell Gunn

Shimachu's Buyback Is Done But The Trade Is Not Done

In January this year, Shimachu Co Ltd (8184 JP) made an announcement of a buyback of up to ¥10bn, buying back up to 4.2mm shares which was 9.9% of...

Travis Lundy

BIG Shimachu (8184) Buyback - An Interesting Trade Profile

On Thursday 9 January 2020 (can't believe I am writing that year), furniture and home center retailer Shimachu Co Ltd (8184 JP)announced (Japanese...

Travis Lundy

Workman: Success Attracts New Competitors but in the Long-Term Workman Still Wins

When Japan's purveyor of hardy clothing and gear for labourers and plumbers became a hit with pregnant women, it was clear that Workman Co Ltd...

Michael Causton

Shimachu (8184) Very Cheap but Where Is It Going ?

Foreigners own 50% of this name. Although earnings have gone nowhere, and it looks like this will remain the case, the company is cash rich, has...

Pearl Hill Advisors

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)