Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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

Toyota put up strong 2Q numbers despite being heavily constrained by semiconductor shortages and production cuts. OP of ¥750bn was its fifth highest quarterly OP generation which is impressive given the conditions mentioned above. Consensus estimates are simply hugging Toyota’s own conservative forecasts and do not account for the significant improvement in profitability we have been touting for the last few years.

Toyota put up strong 2Q numbers despite being heavily constrained by semiconductor shortages and production cuts. OP of ¥750bn was its fifth highest quarterly OP generation which is impressive given the conditions mentioned above. Consensus estimates are simply hugging Toyota’s own conservative forecasts and do not account for the significant improvement in profitability we have been touting for the last few years.

Toyota – Enhanced Profit Structure Confirmed, Large Beat Incoming

Toyota released details on its new bZ4X EV, set for launch in the middle of next year highlighting steer-by-wire, OTA update, digital key and solar roof functions along with a battery system designed for safety and slow degradation. The signs that Toyota has addressed its Achilles heel through Toyota Connected Services in North America are getting stronger.

Toyota released details on its new bZ4X EV, set for launch in the middle of next year highlighting steer-by-wire, OTA update, digital key and solar roof functions along with a battery system designed for safety and slow degradation. The signs that Toyota has addressed its Achilles heel through Toyota Connected Services in North America are getting stronger.

Toyota – BZ4X Gets Toyota’s EV and Autonomous Strategy Rolling

Thematic (Sector/Industry)

<h3>What’s Original?</h3>
In this original, we have discussed some of the key aspects highlighted in Kishida’s policy statements along with the current status of these policies and companies that are likely to benefit.

What’s Original?
In this original, we have discussed some of the key aspects highlighted in Kishida’s policy statements along with the current status of these policies and companies that are likely to benefit.

Kishida as Prime Minister: The Path Ahead

Toyota has been in the news of late as it has decided to <a href="https://pressroom.toyota.com/toyota-charges-into-electrified-future-in-the-u-s-with-10-year-3-4-billion-investment/" target="_blank" rel="noopener">invest $3.4bn in a battery plant in the US</a>, <a href="https://global.toyota/en/newsroom/corporate/36192173.html" target="_blank" rel="noopener">announced a target of 850-900k production units for Nov</a> (vs. 500-600k in Sep and Oct) and <a href="https://asia.nikkei.com/Business/Companies/Nippon-Steel-sues-Toyota-China-s-Baoshan-over-patent-infringement" target="_blank" rel="noopener">gotten embroiled in a dispute between Nippon Steel and Baoshan</a>.

Toyota has been in the news of late as it has decided to invest $3.4bn in a battery plant in the US, announced a target of 850-900k production units for Nov (vs. 500-600k in Sep and Oct) and gotten embroiled in a dispute between Nippon Steel and Baoshan.

Toyota – All-Time High Production Despite “Cuts”, A US Battery Factory and Nippon Steel Dispute

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Among active Global managers, Japan Consumer Discretionary stocks are the 3rd largest country/sector holding in the Asia region.  Average fund weights sit behind Taiwan Tech and Japan Industrials at 1.07%, with 57.1% of the 380 funds in our analysis invested in the sector with combined AUM of $9.18bn.Measured against other Asian country/sectors, changes in fund ownership have been positive and among the highest across all measures over the last 6-months.  Against a backdrop of plummeting exposure in China Consumer Discretionary stocks, average weights, funds invested, cash flows and the balance of buyers vs sellers were all positive for Japan Consumer Discretionary stocks.  Infact, across most ownership metrics, Japan Consumer Discretionary stocks have overtaken, or at least closed to gap to China Consumer Discretionary stocks since the 'Tech Crackdown' in October of 2020.  We can see evidence of this rotation on a fund level, with Aberdeen's Global Unconstrained Fund, LBPAM's Actions Monde and BNY Mellon's Global Opportunities Fund examples of managers rotating from China Consumer Discretionary and into Japan since October 2020.Analysis taken from our Global research, covering 380 active Global strategies with combined AUM of $1.1bn

Among active Global managers, Japan Consumer Discretionary stocks are the 3rd largest country/sector holding in the Asia region.  Average fund weights sit behind Taiwan Tech and Japan Industrials at 1.07%, with 57.1% of the 380 funds in our analysis invested in the sector with combined AUM of $9.18bn.Measured against other Asian country/sectors, changes in fund ownership have been positive and among the highest across all measures over the last 6-months.  Against a backdrop of plummeting exposure in China Consumer Discretionary stocks, average weights, funds invested, cash flows and the balance of buyers vs sellers were all positive for Japan Consumer Discretionary stocks.  Infact, across most ownership metrics, Japan Consumer Discretionary stocks have overtaken, or at least closed to gap to China Consumer Discretionary stocks since the 'Tech Crackdown' in October of 2020.  We can see evidence of this rotation on a fund level, with Aberdeen's Global Unconstrained Fund, LBPAM's Actions Monde and BNY Mellon's Global Opportunities Fund examples of managers rotating from China Consumer Discretionary and into Japan since October 2020.Analysis taken from our Global research, covering 380 active Global strategies with combined AUM of $1.1bn

Japan Consumer Discretionary:  Benefiting from China's Downfall

Japan

Toyota Motor Corporation manufactures, sells, leases, and repairs passenger cars, trucks, buses, and their related parts worldwide. The Company also operates financing services through their subsidiaries. Toyota Motor builds homes, produces pleasure boats, and develops intelligent transportation systems including radar cruise control and electronic toll collection systems.

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Toyota Motor Corp Spon Adr (TM US)

Toyota – Enhanced Profit Structure Confirmed, Large Beat Incoming

Toyota put up strong 2Q numbers despite being heavily constrained by semiconductor shortages and production cuts and significant upside remains vs....

Mio Kato

Toyota – BZ4X Gets Toyota’s EV and Autonomous Strategy Rolling

Toyota released details on its new bZ4X EV and we feel the signs that Toyota has addressed its Achilles heel through Toyota Connected Services in...

Mio Kato

Kishida as Prime Minister: The Path Ahead

In this original, we have discussed some of the key aspects highlighted in Kishida’s policy statements along with the current status of these...

Mio Kato

Toyota – All-Time High Production Despite “Cuts”, A US Battery Factory and Nippon Steel Dispute

Toyota has been in the news as it has decided to invest $3.4bn in a US battery plant, announced a target of 850-900k production units for Nov and...

Mio Kato

Japan Consumer Discretionary: Benefiting from China's Downfall

Against a backdrop of plummeting exposure in China Consumer Discretionary stocks, active Global managers have pivoted towards the Japan Consumer...

Steven Holden

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