'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><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p></div><div>
<p>Tuesday's best and worst pairing is <a href="https://www.smartkarma.com/entities/takara-bio-inc" target="_blank" data-smartkarma-citation="entities:10766:1" rel="noopener">Takara Bio (4974 JP)</a> and staffing agency <a href="https://www.smartkarma.com/entities/temp-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1428:1" rel="noopener">Persol (2181 JP)</a>.  </p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/170/640/original/2020-11-11_05-58-20.png?1605041913" class="editor-image img-responsive" data-smartkarma-image-id="170640"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/170/641/original/2020-11-11_06-01-01.png?1605042074" class="editor-image img-responsive" data-smartkarma-image-id="170641"></figure></section><div><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div></div>
<hr>
<div><p style="text-align: center;"><strong>DAILY STATS</strong></p></div>
<hr>
<div><p style="text-align: center;"><strong>244 Quarterly Results</strong></p></div>
<div><ul style="list-style-type: disc;">
<li><p><strong>Results Score:</strong> 49% Positive / 6% Neutral / 45% Negative</p></li>
<li><p><strong>Average Results Score Change:</strong> -0.1 points</p></li>
<li><p><strong>Average % Change in Revenue:</strong> -5.3% Quarter YoY / -5.9% Rolling TTM YoY </p></li>
<li><p><strong>Average Operating Profit Margin Change:</strong> -1.1 ppt</p></li>
<li><p><strong>Percentage Making Quarterly Losses:</strong> 20%</p></li>
</ul></div>
<hr>
<div><p style="text-align: center;"><strong>111 Annual • 22 Interim Forecasts/Revisions</strong></p></div>
<div><ul style="list-style-type: disc;">
<li><p><strong>Annual Forecast/Revision Score:</strong> 54% Positive / 7% Neutral / 39% Negative</p></li>
<li><p><strong>Interim Forecast/Revision Score Change:</strong> 64% Positive / 0% Neutral / 36% Negative</p></li>
<li><p><strong>Average Forecast/Revision Score Change:</strong> 1.7 points</p></li>
</ul></div>
</div>

• BEST &amp; WORST •
Tuesday's best and worst pairing is Takara Bio (4974 JP) and staffing agency Persol (2181 JP).  
Source for all charts &amp; tables: Japan Analytics

DAILY STATS

244 Quarterly Results

Results Score: 49% Positive / 6% Neutral / 45% Negative
Average Results Score Change: -0.1 points
Average % Change in Revenue: -5.3% Quarter YoY / -5.9% Rolling TTM YoY 
Average Operating Profit Margin Change: -1.1 ppt
Percentage Making Quarterly Losses: 20%


111 Annual • 22 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 54% Positive / 7% Neutral / 39% Negative
Interim Forecast/Revision Score Change: 64% Positive / 0% Neutral / 36% Negative
Average Forecast/Revision Score Change: 1.7 points



🇯🇵 JAPAN • Results & Revisions 11/​​​​​​​​​​​​​​​​​​​​​​​​​10 - Shiseido, FUJIFILM, Otsuka, Persol

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/693/original/2020-09-14_09-50-37.png?1600044664" class="editor-image img-responsive" data-smartkarma-image-id="158693"></figure><div class="content-caption">Source for all charts &amp; tables except as stated: Japan Analytics</div><p><strong>EQUITY-DRIVEN</strong> - Japan's aggregate Shareholders' Equity has appreciated by 45% since 2014 - an annual rate of 5.5% and has been one of the key achievements of the 'Abe era'. For the five years before 2012, Shareholders Equity was unchanged, buffeted by the 2008/9 financial crisis and the 3/11.  Although the equity market has responded well to the change in reserves, Japan's PBR has remained within a range of 1.05 to 1.38 over the last decade and is unchanged compared to 2010. In prior post-bubble 'lost' decades, the average PBR was 1.8 times. In other markets, the rise of intangible assets has called the use of Book/Price as a metric and the S&amp;P 500 PBR is now almost three times that of the Japan aggregate having bottomed at 1.78 in March 2009.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/694/original/File%202020-09-14%2010%2007%2037.jpeg?1600045681" class="editor-image img-responsive" data-smartkarma-image-id="158694"></figure><div class="content-caption">Source: multpl.com</div><p><strong>BOOK VALUE PER SHARE </strong>- In this Insight, we shall look at Japan's larger-cap companies (current market value &gt;¥100 billion) through the 'lens' of book value per share. Our focus will be less on the 'winners' and 'losers' than on those companies that have seen the least change in 'BVPS' over the last seven years. Our share count excludes treasury shares which is to the benefit of companies such as <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (9432 JP)</a> which has seen a 20% reduction in Net Shares Outstanding, but only a 9% increase in Shareholders' Equity. A BVPS growth metric does, however, flatter serial issuers of equity with declining share prices, such as <a href="https://www.smartkarma.com/entities/sosei-group-corp" target="_blank" data-smartkarma-citation="entities:770:1" rel="noopener">Sosei (4565 JP)</a>.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/696/original/2020-09-14_10-26-48.png?1600046818" class="editor-image img-responsive" data-smartkarma-image-id="158696"></figure><p><strong>WINNERS</strong> - As many may ask and for the record, our 'winning' thirty companies contains many of Japan's best-performing businesses and 'priciest 'stocks, such as <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" data-smartkarma-citation="entities:15441:1" rel="noopener">Monotaro (3064 JP)</a>, <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 (2413 JP)</a>, <a href="https://www.smartkarma.com/entities/gmo-payment-gateway-inc" target="_blank" data-smartkarma-citation="entities:1492:1" rel="noopener">GMO Payment Gateway (3769 JP)</a>, and <a href="https://www.smartkarma.com/entities/kobe-bussan-co-ltd" target="_blank" data-smartkarma-citation="entities:4701:1" rel="noopener">Kobe Bussan (3038 JP)</a>. Some of the more surprising entries are <a href="https://www.smartkarma.com/entities/mixi-inc" target="_blank" data-smartkarma-citation="entities:602:1" rel="noopener">mixi (2121 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyo-electric-power-co-inc" target="_blank" data-smartkarma-citation="entities:15457:1" rel="noopener">Tokyo Electric Power (9501 JP)</a>.  As an equally-weighted portfolio, this group has outperformed by 30% over one year and by 11% over the last three months.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/697/original/2020-09-14_10-33-13.png?1600047204" class="editor-image img-responsive" data-smartkarma-image-id="158697"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/698/original/2020-09-14_10-33-41.png?1600047231" class="editor-image img-responsive" data-smartkarma-image-id="158698"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/701/original/2020-09-14_10-47-56.png?1600048087" class="editor-image img-responsive" data-smartkarma-image-id="158701"></figure><p><strong>LOSERS</strong> - Our list of losers, who have collectively underperformed by 9% over one year, have many of Japan's weaker business models (shipping, oil &amp; gas, paper, copiers, gaming machines. The list also features some of the less-astute management 'teams' (<a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan (7201 JP)</a>, <a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin (2503 JP)</a>, <a href="https://www.smartkarma.com/entities/lixil-group-corp" target="_blank" data-smartkarma-citation="entities:454:1" rel="noopener">Lixil (5938 JP)</a>, and <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon (8267 JP)</a>).  Also among the latter are two medical-related business - the now remained <a href="https://www.smartkarma.com/entities/h-u-group-holdings-inc" target="_blank" data-smartkarma-citation="entities:16580:1" rel="noopener">H.U. Group (4544 JP)</a> (formerly Miraca) and recent Bain PE target <a href="https://www.smartkarma.com/entities/nichii-gakkan-co" target="_blank" data-smartkarma-citation="entities:6790:1" rel="noopener">Nichii Gakkan (9792 JP)</a>.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/706/original/2020-09-14_10-57-45.png?1600048692" class="editor-image img-responsive" data-smartkarma-image-id="158706"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/707/original/2020-09-14_10-59-22.png?1600048774" class="editor-image img-responsive" data-smartkarma-image-id="158707"></figure><p>In the <strong>DETAIL</strong> section below, we all review the large companies that have seen the least change in BVPS over the last seven years and those with the lowest BVPS volatility over the same period. Our lists contain quite a few surprises.</p>

Source for all charts &amp; tables except as stated: Japan AnalyticsEQUITY-DRIVEN - Japan's aggregate Shareholders' Equity has appreciated by 45% since 2014 - an annual rate of 5.5% and has been one of the key achievements of the 'Abe era'. For the five years before 2012, Shareholders Equity was unchanged, buffeted by the 2008/9 financial crisis and the 3/11.  Although the equity market has responded well to the change in reserves, Japan's PBR has remained within a range of 1.05 to 1.38 over the last decade and is unchanged compared to 2010. In prior post-bubble 'lost' decades, the average PBR was 1.8 times. In other markets, the rise of intangible assets has called the use of Book/Price as a metric and the S&amp;P 500 PBR is now almost three times that of the Japan aggregate having bottomed at 1.78 in March 2009.Source: multpl.comBOOK VALUE PER SHARE - In this Insight, we shall look at Japan's larger-cap companies (current market value &gt;¥100 billion) through the 'lens' of book value per share. Our focus will be less on the 'winners' and 'losers' than on those companies that have seen the least change in 'BVPS' over the last seven years. Our share count excludes treasury shares which is to the benefit of companies such as NTT (9432 JP) which has seen a 20% reduction in Net Shares Outstanding, but only a 9% increase in Shareholders' Equity. A BVPS growth metric does, however, flatter serial issuers of equity with declining share prices, such as Sosei (4565 JP).WINNERS - As many may ask and for the record, our 'winning' thirty companies contains many of Japan's best-performing businesses and 'priciest 'stocks, such as Monotaro (3064 JP), M3 (2413 JP), GMO Payment Gateway (3769 JP), and Kobe Bussan (3038 JP). Some of the more surprising entries are mixi (2121 JP) and Tokyo Electric Power (9501 JP).  As an equally-weighted portfolio, this group has outperformed by 30% over one year and by 11% over the last three months.LOSERS - Our list of losers, who have collectively underperformed by 9% over one year, have many of Japan's weaker business models (shipping, oil &amp; gas, paper, copiers, gaming machines. The list also features some of the less-astute management 'teams' (Toshiba (6502 JP), Nissan (7201 JP), Kirin (2503 JP), Lixil (5938 JP), and Aeon (8267 JP)).  Also among the latter are two medical-related business - the now remained H.U. Group (4544 JP) (formerly Miraca) and recent Bain PE target Nichii Gakkan (9792 JP).In the DETAIL section below, we all review the large companies that have seen the least change in BVPS over the last seven years and those with the lowest BVPS volatility over the same period. Our lists contain quite a few surprises.

🇯🇵 Japan • Every Shareholder Left Behind - The Book Value Per Share Metric

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a>, <a href="https://www.smartkarma.com/entities/china-vanke-co-ltd-h" target="_blank" data-smartkarma-citation="entities:18368:1" rel="noopener">China Vanke Co Ltd (H) (2202 HK)</a>, <a href="https://www.smartkarma.com/entities/budweiser-brewing-co-apac-ltd" target="_blank" data-smartkarma-citation="entities:28077:1" rel="noopener">Budweiser Brewing Company APAC (1876 HK)</a> and <a href="https://www.smartkarma.com/entities/greentown-service-group-co-ltd" target="_blank" data-smartkarma-citation="entities:22795:1" rel="noopener">Greentown Service Group (2869 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan Dianping (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> and <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>. Shorts covered as the market melted up led by Consumer Discretionary, Financial and Communication Services. Short interest dropped on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan Dianping (3690 HK)</a> following the huge increase the prior week.</p></div><div><p>Japan saw an increase in shorts on <a href="https://www.smartkarma.com/entities/takara-bio-inc" target="_blank" data-smartkarma-citation="entities:10766:1" rel="noopener">Takara Bio Inc (4974 JP)</a>, <a href="https://www.smartkarma.com/entities/familymart-co-ltd" target="_blank" data-smartkarma-citation="entities:320:1" rel="noopener">FamilyMart Co Ltd (8028 JP)</a>, <a href="https://www.smartkarma.com/entities/daito-trust-construct-co-ltd" target="_blank" data-smartkarma-citation="entities:10503:1" rel="noopener">Daito Trust Construct (1878 JP)</a> and <a href="https://www.smartkarma.com/entities/mitsubishi-electric-corp" target="_blank" data-smartkarma-citation="entities:11171:1" rel="noopener">Mitsubishi Electric (6503 JP)</a> and a reduction in shorts on <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a>, <a href="https://www.smartkarma.com/entities/tokyo-gas-co-ltd" target="_blank" data-smartkarma-citation="entities:2332:1" rel="noopener">Tokyo Gas (9531 JP)</a>, <a href="https://www.smartkarma.com/entities/sumitomo-corp" target="_blank" data-smartkarma-citation="entities:5380:1" rel="noopener">Sumitomo Corp (8053 JP)</a> and <a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank Corp (9434 JP)</a>. Sectorally, shorts increased in Real Estate and Financials, while shorts covered their positions in Consumer Discretionary, Consumer Staples, Information Technology and Industrials.</p></div><div><p>Short Interest in Korea decreased led by Information Technology and Health Care.</p></div><div>
<p>Shorts in Taiwan were covered in almost all industry groups led by Technology Hardware, Semiconductors and Consumer Durables.</p>
<p><strong>Short Interest decreased in all four markets covered as markets continued to run up. This has likely left investors underhedged in the market drop and we could see increased short activity over the next week.</strong></p>
</div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on WuXi AppTec Co. Ltd. (2359 HK), China Vanke Co Ltd (H) (2202 HK), Budweiser Brewing Company APAC (1876 HK) and Greentown Service Group (2869 HK) while there was short covering on Meituan Dianping (3690 HK), Alibaba Group (9988 HK), Tencent Holdings (700 HK) and Ping An Insurance (H) (2318 HK). Shorts covered as the market melted up led by Consumer Discretionary, Financial and Communication Services. Short interest dropped on Meituan Dianping (3690 HK) following the huge increase the prior week.Japan saw an increase in shorts on Takara Bio Inc (4974 JP), FamilyMart Co Ltd (8028 JP), Daito Trust Construct (1878 JP) and Mitsubishi Electric (6503 JP) and a reduction in shorts on Fast Retailing (9983 JP), Tokyo Gas (9531 JP), Sumitomo Corp (8053 JP) and Softbank Corp (9434 JP). Sectorally, shorts increased in Real Estate and Financials, while shorts covered their positions in Consumer Discretionary, Consumer Staples, Information Technology and Industrials.Short Interest in Korea decreased led by Information Technology and Health Care.
Shorts in Taiwan were covered in almost all industry groups led by Technology Hardware, Semiconductors and Consumer Durables.
Short Interest decreased in all four markets covered as markets continued to run up. This has likely left investors underhedged in the market drop and we could see increased short activity over the next week.


Asia Short Interest Weekly - Shorts Covered as Markets Melted Up

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. 

<p style="text-align: center;"><strong>• RELATIVE PRICE SCORE</strong> • </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/226/original/2019-06-13_16-47-07.png?1560412038" class="editor-image img-responsive" data-smartkarma-image-id="90226"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>INTRODUCTION </strong>- The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are thus on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company outlier thresholds are set at<strong> +4</strong> &amp; <strong>-2</strong> and equate to the top and bottom first-to-second percentiles of historical observations from which mean reversion takes a matter of months. RPS outliers with a Score of greater than 10.0 are rare outside of the 2000 tech 'bubble'. <a href="https://www.smartkarma.com/entities/goldwin-inc" target="_blank" data-smartkarma-citation="entities:410:1">Goldwin (8111 JP)</a> has the distinction of being one of only two large-cap RPS 'ten-baggers' since that time.</p><p><strong>This insight updates our list of Overbought and Oversold companies, reviews the best and worst performing companies in terms of RPS over the last three months and adds some specific comments on stocks on each category.</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/196/original/2019-06-13_11-15-27.png?1560392157" class="editor-image img-responsive" data-smartkarma-image-id="90196"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>STATISTICS</strong> - Currently, of the 3,832 listed companies for which daily RPS data is available, 94 companies are 'Overbought', and 131 are 'Oversold' - 2.5% and 3.4%, respectively of the total. For the 758 companies with a market capitalisation of over ¥100b, there are 50 'Overbought' and 18 'Oversold' companies, 6.6% and 5.0%, respectively. As noted the companion Insight, <a href="https://www.smartkarma.com/insights/japan-june-relative-price-scores-market-sectors-peer-groups-more-of-the-same" target="_blank" data-smartkarma-citation="insights:30323">🇯🇵 Japan • June Relative Price Scores: Market, Sectors &amp; Peer Groups - More of The Same</a>, these numbers and percentages are unusual and were last seen in the Japanese market in 2000. </p><hr><p style="text-align: center;"><strong>• RELATIVE PRICE SCORE TOPS •</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/202/original/2019-06-13_13-06-49.png?1560398835" class="editor-image img-responsive" data-smartkarma-image-id="90202"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>RPS 'TOPS'</strong> - In the last two years, 444 companies have achieved an RPS of '4' or more and the average Overbought 'persistence' is 43 days. 1.4% of the total of 1.29 million traded stock days were by companies with an RPS of over 4. For companies with a market capitalisation higher than ¥100b, the numbers are 96 companies and 75 days - demonstrating the superior persistence of large capitalisation companies in this regard. Some examples of RPS mean reversion in the last three months have been <a href="https://www.smartkarma.com/entities/descente-ltd" target="_blank" data-smartkarma-citation="entities:8225:1">Descente (8114 JP)</a>, <a href="https://www.smartkarma.com/entities/alfresa-holdings-corp" target="_blank" data-smartkarma-citation="entities:10610:1">Alfresa (2784 JP)</a>, <a href="https://www.smartkarma.com/entities/320" target="_blank" data-smartkarma-citation="entities:320:1">FamilyMart Uny (8028 JP)</a>, <a href="https://www.smartkarma.com/entities/kikkoman-corp" target="_blank" data-smartkarma-citation="entities:11720:1">Kikkoman (2801 JP)</a>, <a href="https://www.smartkarma.com/entities/kobayashi-pharmaceutical-co" target="_blank" data-smartkarma-citation="entities:14930:1">Kobayashi Pharmaceutical (4967 JP)</a>, and <a href="https://www.smartkarma.com/entities/eiken-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:12675:1">Eiken Chemical (4549 JP)</a>.  </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/201/original/2019-06-13_13-04-38.png?1560398780" class="editor-image img-responsive" data-smartkarma-image-id="90201"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/203/original/2019-06-13_13-08-46.png?1560398945" class="editor-image img-responsive" data-smartkarma-image-id="90203"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/204/original/2019-06-13_13-09-37.png?1560399049" class="editor-image img-responsive" data-smartkarma-image-id="90204"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/205/original/2019-06-13_13-12-01.png?1560399142" class="editor-image img-responsive" data-smartkarma-image-id="90205"></figure><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/316/original/2019-06-15_19-45-47.png?1560595558" class="editor-image img-responsive" data-smartkarma-image-id="90316"></figure><p>Source: Japan Analytics</p>
</div><p><strong>RPS 'BOTTOMS'</strong> - 372 companies have seen their RPS fall to '-2' or below in the last two years, and the average Oversold 'persistence' is 61 days. 1.5% of the total of 1.29 million traded stock days were by companies with an RPS of less than -2.  For larger capitalisation companies, the numbers are 85 companies and 89 days. A recent example of positive RPS mean reversion is <a href="https://www.smartkarma.com/entities/k-o-energy-group-inc" target="_blank" data-smartkarma-citation="entities:17701:1">K&amp;O Energy (1663 JP)</a>.</p><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/207/original/2019-06-13_13-14-03.png?1560399270" class="editor-image img-responsive" data-smartkarma-image-id="90207"></figure><p>Source: Japan Analytics</p>
</div><div class="content-highlight"><p>In the <strong>DETAIL </strong>section below, we list the current very overbought (RPS&gt;5), too late to buy (RPS &gt;4&lt;5) and oversold (RPS &lt;-2) stocks as well as the most substantial three-month positive and negative changes in RPS.</p></div>

• RELATIVE PRICE SCORE • Source: Japan AnalyticsINTRODUCTION - The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are thus on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company outlier thresholds are set at +4 &amp; -2 and equate to the top and bottom first-to-second percentiles of historical observations from which mean reversion takes a matter of months. RPS outliers with a Score of greater than 10.0 are rare outside of the 2000 tech 'bubble'. Goldwin (8111 JP) has the distinction of being one of only two large-cap RPS 'ten-baggers' since that time.This insight updates our list of Overbought and Oversold companies, reviews the best and worst performing companies in terms of RPS over the last three months and adds some specific comments on stocks on each category.Source: Japan AnalyticsSTATISTICS - Currently, of the 3,832 listed companies for which daily RPS data is available, 94 companies are 'Overbought', and 131 are 'Oversold' - 2.5% and 3.4%, respectively of the total. For the 758 companies with a market capitalisation of over ¥100b, there are 50 'Overbought' and 18 'Oversold' companies, 6.6% and 5.0%, respectively. As noted the companion Insight, 🇯🇵 Japan • June Relative Price Scores: Market, Sectors &amp; Peer Groups - More of The Same, these numbers and percentages are unusual and were last seen in the Japanese market in 2000. • RELATIVE PRICE SCORE TOPS •Source: Japan AnalyticsRPS 'TOPS' - In the last two years, 444 companies have achieved an RPS of '4' or more and the average Overbought 'persistence' is 43 days. 1.4% of the total of 1.29 million traded stock days were by companies with an RPS of over 4. For companies with a market capitalisation higher than ¥100b, the numbers are 96 companies and 75 days - demonstrating the superior persistence of large capitalisation companies in this regard. Some examples of RPS mean reversion in the last three months have been Descente (8114 JP), Alfresa (2784 JP), FamilyMart Uny (8028 JP), Kikkoman (2801 JP), Kobayashi Pharmaceutical (4967 JP), and Eiken Chemical (4549 JP).  
Source: Japan Analytics
RPS 'BOTTOMS' - 372 companies have seen their RPS fall to '-2' or below in the last two years, and the average Oversold 'persistence' is 61 days. 1.5% of the total of 1.29 million traded stock days were by companies with an RPS of less than -2.  For larger capitalisation companies, the numbers are 85 companies and 89 days. A recent example of positive RPS mean reversion is K&amp;O Energy (1663 JP).
Source: Japan Analytics
In the DETAIL section below, we list the current very overbought (RPS&gt;5), too late to buy (RPS &gt;4&lt;5) and oversold (RPS &lt;-2) stocks as well as the most substantial three-month positive and negative changes in RPS.

🇯🇵 Japan • Relative Price Scores - Overbought & Oversold Companies - June 2019

Asia Healthcare Analyst, Pathology Associates Limited

Dion Stéfan Büchner M.D., FCAP

Asia Healthcare Analyst

Pathology Associates Limited

<p><strong>Japan CAR-T therapy - Competitive landscape</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/065/356/original/Japan%20CAR-T%20landscape.JPG?1538128874" class="editor-image img-responsive" data-smartkarma-image-id="65356"></figure><p><strong>Japan pharma catching-up with global players… but a large gap remains</strong></p><ul>
<li>
<a href="https://www.smartkarma.com/entities/26851" target="_blank" data-smartkarma-citation="entities:26851:1">Novartis AG (NOVN SE)</a>’ <strong>Kymriah</strong> and <a href="https://www.smartkarma.com/entities/973" target="_blank" data-smartkarma-citation="entities:973:1">Gilead Sciences (GILD US)</a>/ <a href="https://www.smartkarma.com/entities/20664" target="_blank" data-smartkarma-citation="entities:20664:1">Kite Pharma Inc (KITE US)</a>’s <strong>Yescarta</strong> are the two approved CAR-T cell therapies in the US and EU.</li>
<li>Furthermore, Novartis’s Kymriah is expected to secure Japan approval in 1Q FY19e (filed in April 2018).</li>
<li>Despite being the frontrunners amongst Japan pharma majors developing CAR-T therapy for the domestic market<strong>, <a href="https://www.smartkarma.com/entities/3014" target="_blank" data-smartkarma-citation="entities:3014:1">Daiichi Sankyo (4568 JP)</a></strong>, <a href="https://www.smartkarma.com/entities/12292" target="_blank" data-smartkarma-citation="entities:12292:1">Otsuka Holdings (4578 JP)</a><strong>/ <a href="https://www.smartkarma.com/entities/10766" target="_blank" data-smartkarma-citation="entities:10766:1">Takara Bio Inc (4974 JP)</a></strong> and <a href="https://www.smartkarma.com/entities/8979" target="_blank" data-smartkarma-citation="entities:8979:1">Ono Pharmaceutical (4528 JP)</a> still have a long way to commercialization.</li>
</ul><p><strong>Japan CAR-T market opportunity and key beneficiaries</strong></p><ul>
<li>Globally CAR-T is a $10b+ opportunity in hematologic malignancies, however, since most of the Japanese pharma companies have in-licensed Asia/Japan rights, we estimate the domestic CAR-T opportunity to be between <strong>$3-$5b</strong> (depending on pricing).</li>
<li>As far as the Japan market is concerned, the focus is on patients who fail to respond to 2L or 3L treatment for <strong>leukemia-like acute lymphocytic leukemia/lymphoma</strong> (ALL, Japan population 5000, R/R population 20%) and <strong>diffuse large B-cell lymphoma</strong> (DLBCL, Japan population 18000-22000, R/R population 33%).  </li>
<li>Having said that, multiple myeloma (significantly larger opportunity) targeted clinical trials are progressing well</li>
<li>Furthermore, preliminary data from Ph I clinical trials studying CAR-T therapy for solid tumors is expected to report over the next 2-3 years</li>
<li>
<strong>Daiichi Sankyo</strong> and <strong>Otsuka </strong>in-licensed CAR-T therapy assets from Kite Therapeutics (now part of Gilead) and Takara Bio respectively and are well positioned to capitalize on the opportunity.</li>
<li>However, US approval of Kite’s Yescarta for DLBCL can help accelerate enrollment/review of the Japanese clinical trial (based on US data), thereby significantly increasing its probability of success.</li>
<li>Consequently, Daiichi Sankyo could be the second company (after Novartis) to launch CAR-T therapy in Japan, securing it a strong position in the Japanese CAR-T therapy market.</li>
</ul>

Japan CAR-T therapy - Competitive landscapeJapan pharma catching-up with global players… but a large gap remains

Novartis AG (NOVN SE)’ Kymriah and Gilead Sciences (GILD US)/ Kite Pharma Inc (KITE US)’s Yescarta are the two approved CAR-T cell therapies in the US and EU.
Furthermore, Novartis’s Kymriah is expected to secure Japan approval in 1Q FY19e (filed in April 2018).
Despite being the frontrunners amongst Japan pharma majors developing CAR-T therapy for the domestic market, Daiichi Sankyo (4568 JP), Otsuka Holdings (4578 JP)/ Takara Bio Inc (4974 JP) and Ono Pharmaceutical (4528 JP) still have a long way to commercialization.
Japan CAR-T market opportunity and key beneficiaries
Globally CAR-T is a $10b+ opportunity in hematologic malignancies, however, since most of the Japanese pharma companies have in-licensed Asia/Japan rights, we estimate the domestic CAR-T opportunity to be between $3-$5b (depending on pricing).
As far as the Japan market is concerned, the focus is on patients who fail to respond to 2L or 3L treatment for leukemia-like acute lymphocytic leukemia/lymphoma (ALL, Japan population 5000, R/R population 20%) and diffuse large B-cell lymphoma (DLBCL, Japan population 18000-22000, R/R population 33%).  
Having said that, multiple myeloma (significantly larger opportunity) targeted clinical trials are progressing well
Furthermore, preliminary data from Ph I clinical trials studying CAR-T therapy for solid tumors is expected to report over the next 2-3 years

Daiichi Sankyo and Otsuka in-licensed CAR-T therapy assets from Kite Therapeutics (now part of Gilead) and Takara Bio respectively and are well positioned to capitalize on the opportunity.
However, US approval of Kite’s Yescarta for DLBCL can help accelerate enrollment/review of the Japanese clinical trial (based on US data), thereby significantly increasing its probability of success.
Consequently, Daiichi Sankyo could be the second company (after Novartis) to launch CAR-T therapy in Japan, securing it a strong position in the Japanese CAR-T therapy market.


Japan

TAKARA BIO INC. is a biopharmaceutical company.  The Company researches and develops reagents for genome engineering and analysis, technology used for gene therapy, and natural health food products using mushrooms and seaweed body and extracts.

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