'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/000/139/997/original/2020-06-15_11-08-56.png?1592186965" class="editor-image img-responsive" data-smartkarma-image-id="139997"></figure><div class="content-caption">Source: Japan Analytics</div>
STRESS TESTS - This Insight is the second in our Japan Stress Test series in which we endeavour to assess where business risk is concentrated among larger Japanese companies. <a href="https://www.smartkarma.com/insights/japan-stress-tests-part-1-altman-z-scores" target="_blank" data-smartkarma-citation="insights:40180" rel="noopener">Part 1</a> looked at the time-worn Altman-Z Score for both manufacturing and non-manufacturing companies. In Part 2 will we turn our attention to the cash flow statement starting with the 'lifeblood' of all businesses - Operating Cash Flow.
ACCRUAL ACCOUNTING - Despite the sacrosanctity in some quarters of discounted cash flow analysis, for valuation purposes, our preference is to use accrual accounting. As Professor Stephen Penman states, "Accrual accounting brings the future forward in time and anticipates future cash flows."  Nevertheless, cash flow accounting, and the level of accounting accruals, can provide early insights into periodic stress. <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan Motor (7201 JP)'s</a> Accruals (Operating Income less Operating Cash Flow) as a percentage of period-end market capitalisation correlate with the company's Relative Price Score over the last thirty years. Further Insights in this series will continue to 'mine'  the Cash Flow statement by exploring Financing Cash Flows and the Working Capital Cycle.
REFORMULATED CASH FLOWSTATEMENTS - Our Operating Cash Flow calculation is derived from each company's Balance Sheet and Income Statement for periods of up to twenty-eight years. Cash Flow items relating to operating activities are divided into Operating Cash Flow and Investing Cash Flow, which includes Fixed Asset and Inventory Cash Flows.  Cash flows relating to financing activities are divided into Financing Cash Flow and Shareholder Cash Flow. The reformulated Balance Sheets, Income and Cash Flow Statements follow a clean-surplus relationship. All three Statements are fully articulated to include items of Other Comprehensive Income which are added to or subtracted from Shareholders' Equity. 
</div>UNIVERSE - The universe for this Insight comprises the 614 Japanese companies with a market capitalisation excluding Treasury Stock over ¥100 million and for which we have at least two years of cash flow data.  Five non-financial companies, which have significant financial subsidiaries (<a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a>, <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a>, <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post (6178 JP)</a>, <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony (6758 JP)</a>), have been excluded from this analysis.


Source: Japan Analytics
STRESS TESTS - This Insight is the second in our Japan Stress Test series in which we endeavour to assess where business risk is concentrated among larger Japanese companies. Part 1 looked at the time-worn Altman-Z Score for both manufacturing and non-manufacturing companies. In Part 2 will we turn our attention to the cash flow statement starting with the 'lifeblood' of all businesses - Operating Cash Flow.
ACCRUAL ACCOUNTING - Despite the sacrosanctity in some quarters of discounted cash flow analysis, for valuation purposes, our preference is to use accrual accounting. As Professor Stephen Penman states, "Accrual accounting brings the future forward in time and anticipates future cash flows."  Nevertheless, cash flow accounting, and the level of accounting accruals, can provide early insights into periodic stress. Nissan Motor (7201 JP)'s Accruals (Operating Income less Operating Cash Flow) as a percentage of period-end market capitalisation correlate with the company's Relative Price Score over the last thirty years. Further Insights in this series will continue to 'mine'  the Cash Flow statement by exploring Financing Cash Flows and the Working Capital Cycle.
REFORMULATED CASH FLOWSTATEMENTS - Our Operating Cash Flow calculation is derived from each company's Balance Sheet and Income Statement for periods of up to twenty-eight years. Cash Flow items relating to operating activities are divided into Operating Cash Flow and Investing Cash Flow, which includes Fixed Asset and Inventory Cash Flows.  Cash flows relating to financing activities are divided into Financing Cash Flow and Shareholder Cash Flow. The reformulated Balance Sheets, Income and Cash Flow Statements follow a clean-surplus relationship. All three Statements are fully articulated to include items of Other Comprehensive Income which are added to or subtracted from Shareholders' Equity. 
UNIVERSE - The universe for this Insight comprises the 614 Japanese companies with a market capitalisation excluding Treasury Stock over ¥100 million and for which we have at least two years of cash flow data.  Five non-financial companies, which have significant financial subsidiaries (Rakuten (4755 JP), Z Holdings (4689 JP), Japan Post (6178 JP), Softbank Group (9984 JP) and Sony (6758 JP)), have been excluded from this analysis. 

🇯🇵 JAPAN - Stress Tests Part 2 - Operating Cash Flow & Accruals

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Equity Bottom-Up

Symbio Pharmaceuticals / Equity Bottom-Up

SymBio will be presenting data at the European Society of Hematology (EHA) meeting from its pivotal study in Japan of Treakisym (bendamustine) in combination with rituximab for the treatment of diffuse large B-cell lymphoma (DLBCL). The 38-patient, single-arm study showed a 76% overall response rate (ORR), with 47% of patients achieving a complete response (CR). This gives us a high degree of confidence in the label expansion for this population submitted in May 2020.

SymBio will be presenting data at the European Society of Hematology (EHA) meeting from its pivotal study in Japan of Treakisym (bendamustine) in combination with rituximab for the treatment of diffuse large B-cell lymphoma (DLBCL). The 38-patient, single-arm study showed a 76% overall response rate (ORR), with 47% of patients achieving a complete response (CR). This gives us a high degree of confidence in the label expansion for this population submitted in May 2020.


SymBio Pharmaceuticals - Top-line data from registrational DLBCL study

SymBio will be presenting data at the European Society of Hematology (EHA) meeting from its pivotal study in Japan of Treakisym (bendamustine) in combination with rituximab for the treatment of diffuse large B-cell lymphoma (DLBCL). The 38-patient, single-arm study showed a 76% overall response rate (ORR), with 47% of patients achieving a complete response (CR). This gives us a high degree of confidence in the label expansion for this population submitted in May 2020.

SymBio will be presenting data at the European Society of Hematology (EHA) meeting from its pivotal study in Japan of Treakisym (bendamustine) in combination with rituximab for the treatment of diffuse large B-cell lymphoma (DLBCL). The 38-patient, single-arm study showed a 76% overall response rate (ORR), with 47% of patients achieving a complete response (CR). This gives us a high degree of confidence in the label expansion for this population submitted in May 2020.

SymBio announced on 11 May 2020 that it submitted an application to expand the label for Treakisym in Japan to include the treatment of relapsed and refractory diffuse large B-cell lymphoma (DLBCL) in combination with rituximab. This follows the positive results seen in the Phase III study for the combination reported in November 2019. We expect this label expansion to more than double the sales potential for the drug.

SymBio announced on 11 May 2020 that it submitted an application to expand the label for Treakisym in Japan to include the treatment of relapsed and refractory diffuse large B-cell lymphoma (DLBCL) in combination with rituximab. This follows the positive results seen in the Phase III study for the combination reported in November 2019. We expect this label expansion to more than double the sales potential for the drug.

SymBio Pharmaceuticals - Treakisym label expansion submitted

Japan

WAKAMOTO PHARMACEUTICAL CO., LTD. produces and sells prescription and generic drug.  The Company's products include vitamins, external medicine, toothpaste and toothbrushes, and drugs for digestive organs.

MEDRx Co Ltd., is a pharmaceutical company. The Company develops medicines for the pharmaceutical industry based on drug formulation technologies required for Drug Delivery Systems.

Nippon Chemiphar Co., Ltd. produces and sells medicine for medical use.  The Company also produces medical, health, and cosmetics products.  Nippon Chemiphar sterilizes medical instruments for hospitals and operates nursing home for elderly.

RaQualia Pharma, Inc. is a pharmaceutical company. The Company develops compounds for patient studies and sells drugs to pharmaceutical manufacturers. RaQualia also provides research on remedies in gastrointestinal, liver diseases, and pain in general areas.

Taisho Pharmaceutical Holdings Company Ltd. produces and sells pharmaceuticals, foods, and  other related products. The Company also provides insurance agency and information processing services and operates hotel businesses.

Taisho Pharmaceutical Holdings Company Ltd. produces and sells pharmaceuticals, foods, and other related products. The Company also provides insurance and information processing services and operates hotel businesses.

Taiko Pharmaceutical Co Ltd is a pharmaceutical company that manufactures and sells gastrointestinal pharmaceuticals and general use pharmaceutical products.

Fuso Pharmaceutical Industries, Ltd. produces and sells pharmaceuticals and medical equipment.  The Company's main products are transfusion fluid and artificial kidney dialysis fluid.  Fuso Pharmaceutical Industries also leases real estate properties and operates bowling places.

Daito Pharmaceutical Co Ltd. is a pharmaceutical company. The Company manufactures generic formulations as well as supplies APIs for generic products to generic marketers. Daito serves a broad range of clients including generic medicine suppliers, ethical prescription pharmaceutical companies, healthcare products companies and home delivery medicines groups.

Fuji Pharma Co., Ltd. manufactures and markets generic drugs.  The Company produces hormone agents for the obstetrics and gynecology fields, and chemicals for x-rays and infectious disease diagnosis kits.  Fuji Pharmaceutical also provides pharmaceutical information on after-market research and the effectiveness and safety of medications.

Wai Yuen Tong Medicine Holdings Limited, through its subsidiaries, manufactures and sells Chinese and western pharmaceutical products.

Percheron Therapeutics Limited is a biopharmaceutical drug discovery and development company. The Company creates and develops novel antisense therapeutics for a variety of drug candidates including duchenne muscular dystrophy (DMD), multiple sclerosis (MS), and acromegaly. Percheron Therapeutics serves customers in Australia.

GenMont Biotech Inc. is an ultra-modern biotechnology medicines.

Yung Zip Chemical Ind. Co., Ltd. develops and markets therapeutics to treat infections and related diseases.   The Company sells its products in Taiwan and exports worldwide.

Venus Remedies Limited is a pharmaceutical manufacturing unit. The Company manufactures products such as I.V. fluids, antibiotics, anti-histamines, third and fourth generation Cephalosporins and Oncology drugs.

Chi Sheng Chemical Corporation manufactures and distributes medical medicines and equipments. Some of their products include vitamin injections, oral solutios , cough syrups, stomach medicines as well as externally applied medicines such as contact lens solutions and healthcare food.

Eagle Veterinary Technology Co., Ltd. produces veterinary medicines, such as antibiotics, disinfectants, and vitamins for swine, poultry, bovine, and fish. The Company also produces feeding stuff additives.

Tien Liang Biotech Co., Ltd. produces and sells chemical pharmaceuticals and Chinese herbs.  The Company also develops and manufactures dietary supplements and cosmetic products.

InnoPharmax Inc. is a specialty pharmaceutical company. The Company develops and commercializes products for the treatment of infectious diseases, immunology, and oncology.

Jenburkt Pharmaceuticals Limited manufactures and markets pharmaceuticals formulations and healthcare products.

Symbio Pharmaceuticals Limited develops and commercializes prescription drugs n oncology, hematology and auto-immune disease for Japan and other Asia Pacific markets.

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Symbio Pharmaceuticals (4582 JP)

🇯🇵 JAPAN - Stress Tests Part 2 - Operating Cash Flow & Accruals

STRESS TESTS - This Insight is the second in our Japan Stress Test series in which we endeavour to assess where business risk is concentrated...

Campbell Gunn

SymBio Pharmaceuticals - Top-line data from registrational DLBCL study

SymBio will be presenting data at the European Society of Hematology (EHA) meeting from its pivotal study in Japan of Treakisym (bendamustine) in...

Edison Investment Research

SymBio Pharmaceuticals - Top-line data from registrational DLBCL study

SymBio will be presenting data at the European Society of Hematology (EHA) meeting from its pivotal study in Japan of Treakisym (bendamustine) in...

Edison Investment Research

SymBio Pharmaceuticals - Treakisym label expansion submitted

SymBio announced on 11 May 2020 that it submitted an application to expand the label for Treakisym in Japan to include the treatment of relapsed...

Edison Investment Research

SymBio Pharmaceuticals - Treakisym label expansion submitted

SymBio announced on 11 May 2020 that it submitted an application to expand the label for Treakisym in Japan to include the treatment of relapsed...

Edison Investment Research

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