Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/nippon-paint-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7387:1" rel="noopener">Nippon Paint Holdings (4612 JP)</a> has outperformed <a href="https://www.smartkarma.com/entities/kansai-paint-co-ltd" target="_blank" data-smartkarma-citation="entities:13340:1" rel="noopener">Kansai Paint (4613 JP)</a> despite trading in the same sector by a wide margin, mainly due to the difference in the shareholders' composition, sector, and country focus. 
Nippon Paint is no longer a Japan-centric company as its biggest country exposure is in China and it has reduced its exposure in the auto sector and focus to ride on property sector growth in China. Kansai Paint, on the other hand, is still a Japan auto-play with Toyota as one of the top customers and also a shareholder. 
As long as the auto sector outlook remains sluggish and Chinese property companies keep recording sales increase through its online initiative (Heng Fang Tong), Nippon Paint will continue to outperform Kansai Paint for a while despite the valuation gap between the two of them. 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/134/665/original/image_89592220921589990154623.png?1589990155" class="editor-image img-responsive" data-smartkarma-image-id="134665"></figure>
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source: Capital IQ
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Nippon Paint Holdings (4612 JP) has outperformed Kansai Paint (4613 JP) despite trading in the same sector by a wide margin, mainly due to the difference in the shareholders' composition, sector, and country focus. 
Nippon Paint is no longer a Japan-centric company as its biggest country exposure is in China and it has reduced its exposure in the auto sector and focus to ride on property sector growth in China. Kansai Paint, on the other hand, is still a Japan auto-play with Toyota as one of the top customers and also a shareholder. 
As long as the auto sector outlook remains sluggish and Chinese property companies keep recording sales increase through its online initiative (Heng Fang Tong), Nippon Paint will continue to outperform Kansai Paint for a while despite the valuation gap between the two of them. 


source: Capital IQ


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Nippon Paint (4612) Vs Kansai Paint (4613): Gap to Last

'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)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/133/055/original/2020-05-13_05-37-45.png?1589315906" class="editor-image img-responsive" data-smartkarma-image-id="133055"></figure><div class="content-caption">Source • Japan Analytics</div>CASCADE - As expected, with many more of the larger listed companies reporting, our three Scores are falling in unison and at the fastest rate since 2008/9. With still over two-thirds of companies yet to report, there is more 'pain' ahead in this elongated 'season' of announcements. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/133/056/original/2020-05-13_06-21-24.png?1589318495" class="editor-image img-responsive" data-smartkarma-image-id="133056"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/133/057/original/2020-05-13_06-22-14.png?1589318598" class="editor-image img-responsive" data-smartkarma-image-id="133057"></figure><div class="content-caption">Source • Japan Analytics</div>In the DETAIL below, we shall review the results, revisions and initial forecast announcements made by larger-cap (¥75b+) companies yesterday:-<div><ul>
<li>The balance between positive/neutral/negative of the 269 results announcements was 117:23:129. The average change in Results Score was -0.8.</li>
<li>For the 129 revisions/initial forecasts, the split was 39:7:83, and the average Revision Score was -4.6. Of the 213 companies declaring full-year results, 46% made forecasts for the current year.</li>
<li>
313 companies will announce on today, the largest of which by market capitalisation will be <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony (6758 JP)</a>, <a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a>,  and <a href="https://www.smartkarma.com/entities/eisai-co-ltd" target="_blank" data-smartkarma-citation="entities:21001:1" rel="noopener">Eisai (4523 JP)</a>. </li>
<li>Tuesday's 'best' and 'worst' scoring results were from  <a href="https://www.smartkarma.com/entities/gmo-internet-inc" target="_blank" data-smartkarma-citation="entities:13631:1" rel="noopener">GMO Internet (9449 JP)</a>  and <a href="https://www.smartkarma.com/entities/nissin-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:18567:1" rel="noopener">Nissin Electric (6641 JP)</a>, respectively. </li>
</ul></div>

Source • Japan AnalyticsCASCADE - As expected, with many more of the larger listed companies reporting, our three Scores are falling in unison and at the fastest rate since 2008/9. With still over two-thirds of companies yet to report, there is more 'pain' ahead in this elongated 'season' of announcements. Source • Japan AnalyticsIn the DETAIL below, we shall review the results, revisions and initial forecast announcements made by larger-cap (¥75b+) companies yesterday:-
The balance between positive/neutral/negative of the 269 results announcements was 117:23:129. The average change in Results Score was -0.8.
For the 129 revisions/initial forecasts, the split was 39:7:83, and the average Revision Score was -4.6. Of the 213 companies declaring full-year results, 46% made forecasts for the current year.

313 companies will announce on today, the largest of which by market capitalisation will be Sony (6758 JP), Takeda Pharmaceutical (4502 JP),  and Eisai (4523 JP). 
Tuesday's 'best' and 'worst' scoring results were from  GMO Internet (9449 JP)  and Nissin Electric (6641 JP), respectively. 


🇯🇵 JAPAN • Results & Revisions 12th May - Secom, Shiseido, Toyota, Sysmex, Mitsui Fudosan

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

<div>Toyota (just after the lunch break) and Honda (after the close) both reported FY03/20 results today. Toyota reported strong revenue 1.5% above guidance and 0.9% above consensus at ¥29.9trn and OP of ¥2.44trn fell 2.3% below guidance but beat consensus by 2.1%. FY03/21 guidance looked conservative as usual with Toyota guiding for ¥24.0 trn in revenue and just ¥500bn in OP vs. consensus at ¥27.3trn in revenue (¥25.3trn over the last 28 days) and ¥1.77trn in OP (¥1.33trn over the last 28 days).</div>Honda’s ¥14.9trn in revenue was 1.4% below guidance but beat consensus by 0.2% while OP of ¥634bn was 13.2% below guidance and even fell 7.3% below consensus. Honda declined to issue guidance for the FY and we consider consensus forecasts for revenue of ¥13.9trn (¥13.0trn over the last 28 days) and OP of ¥402bn (¥220bn over the last 28 days) to be extremely difficult to achieve.The underlying fortunes of the two companies are diverging and we consider Toyota’s competitive position to be far superior.

Toyota (just after the lunch break) and Honda (after the close) both reported FY03/20 results today. Toyota reported strong revenue 1.5% above guidance and 0.9% above consensus at ¥29.9trn and OP of ¥2.44trn fell 2.3% below guidance but beat consensus by 2.1%. FY03/21 guidance looked conservative as usual with Toyota guiding for ¥24.0 trn in revenue and just ¥500bn in OP vs. consensus at ¥27.3trn in revenue (¥25.3trn over the last 28 days) and ¥1.77trn in OP (¥1.33trn over the last 28 days).Honda’s ¥14.9trn in revenue was 1.4% below guidance but beat consensus by 0.2% while OP of ¥634bn was 13.2% below guidance and even fell 7.3% below consensus. Honda declined to issue guidance for the FY and we consider consensus forecasts for revenue of ¥13.9trn (¥13.0trn over the last 28 days) and OP of ¥402bn (¥220bn over the last 28 days) to be extremely difficult to achieve.The underlying fortunes of the two companies are diverging and we consider Toyota’s competitive position to be far superior. 

Toyota – Based on Results, Long Toyota Short Honda Should Continue to Work

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/132/848/original/2020-05-12_05-39-47.png?1589229610" class="editor-image img-responsive" data-smartkarma-image-id="132848"></figure><div class="content-caption">Source • Japan Analytics</div>NEW INTERIM LOW - As we have noted in earlier Insights in this series, only half of the companies with March year-ends are issuing forecasts for the current year. Of those that do, two-thirds are also providing forecasts for the six months to September 2020. As was the case in 2019, our Interim data series is a clear signal of the depth of this recession.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/132/853/original/2020-05-12_06-49-09.png?1589233760" class="editor-image img-responsive" data-smartkarma-image-id="132853"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/132/854/original/2020-05-12_06-49-50.png?1589233810" class="editor-image img-responsive" data-smartkarma-image-id="132854"></figure><div class="content-caption">Source • Japan Analytics</div>In the DETAIL below, we shall review the results, revisions and initial forecast announcements made by larger-cap (¥75b+) companies yesterday:-<ul>
<li>The balance between positive/neutral/negative of the 238 results announcements was 103:17:118. The average change in Results Score was -0.8.</li>
<li>For the 137 revisions/initial forecasts, the split was 46:12:79, and the average Revision Score was -5.4. Of the 183 companies declaring full-year results, 52% made forecasts for the current year.</li>
<li>263 will announce on Monday, the largest of which by market capitalisation will be <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a>, <a href="https://www.smartkarma.com/entities/honda-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:154:1" rel="noopener">Honda Motor (7267 JP)</a>, and <a href="https://www.smartkarma.com/entities/daikin-industries-ltd" target="_blank" data-smartkarma-citation="entities:16696:1" rel="noopener">Daikin (6367 JP)</a>.</li>
<li>Monday's 'best' and 'worst' scoring results were from  <a href="https://www.smartkarma.com/entities/nissin-foods-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:12548:1" rel="noopener">Nissin Foods (2897 JP)</a>  and amusement centre operator <a href="https://www.smartkarma.com/entities/round-one-corp" target="_blank" data-smartkarma-citation="entities:7057:1" rel="noopener">Round One (4680 JP)</a>, respectively. </li>
</ul>

Source • Japan AnalyticsNEW INTERIM LOW - As we have noted in earlier Insights in this series, only half of the companies with March year-ends are issuing forecasts for the current year. Of those that do, two-thirds are also providing forecasts for the six months to September 2020. As was the case in 2019, our Interim data series is a clear signal of the depth of this recession.Source • Japan AnalyticsIn the DETAIL below, we shall review the results, revisions and initial forecast announcements made by larger-cap (¥75b+) companies yesterday:-
The balance between positive/neutral/negative of the 238 results announcements was 103:17:118. The average change in Results Score was -0.8.
For the 137 revisions/initial forecasts, the split was 46:12:79, and the average Revision Score was -5.4. Of the 183 companies declaring full-year results, 52% made forecasts for the current year.
263 will announce on Monday, the largest of which by market capitalisation will be Toyota Motor (7203 JP), Honda Motor (7267 JP), and Daikin (6367 JP).
Monday's 'best' and 'worst' scoring results were from  Nissin Foods (2897 JP)  and amusement centre operator Round One (4680 JP), respectively. 


🇯🇵 JAPAN • Results & Revisions 11th May - Nissin, Seria, Mitsubishi Electric, Asahi Group

The Malaysian auto sector rightly suffered during Q1 2020 due to the COVID-19 induced Movement Control Order (lockdown), forcing various non-essential businesses to close. However, the demand for Proton <a href="https://www.smartkarma.com/entities/drb-hicom-bhd" target="_blank" data-smartkarma-citation="entities:19627:1" rel="noopener">DRB-Hicom Bhd (DRB MK)</a> was very strong - illuminating the preference shift from sedan to SUV in Malaysia. 
DRB share price took a tumble although its sales actually grew and the potential for gaining market share is quite high given the Malaysian strongly prefer SUV and Proton's X70 and X50 are sold at a relatively affordable pricing point. 
After the 53% erosion of market value in mid-March 2020, investing in DRB presents an unprecedented opportunity to gain 40% in the Malaysian auto segment. 
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Related Insights
</div>
<a href="https://www.smartkarma.com/insights/drb-hi-com-drb-value-unlocking-part-ii" target="_blank" data-smartkarma-citation="insights:36766" rel="noopener">DRB Hi Com (DRB): Value Unlocking-Part II</a> 
<a href="https://www.smartkarma.com/insights/drb-hi-com-drb-value-unlocking-part-i" target="_blank" data-smartkarma-citation="insights:36758" rel="noopener">DRB Hi Com (DRB): Value Unlocking-Part I</a> 
<a href="https://www.smartkarma.com/insights/drb-hicom-drb-proton-to-china" target="_blank" data-smartkarma-citation="insights:23229" rel="noopener">DRB Hicom (DRB): Proton to China</a> 
<a href="https://www.smartkarma.com/insights/drb-hicom-the-knife-is-out" target="_blank" data-smartkarma-citation="insights:16301" rel="noopener">DRB Hicom: The Knife Is Out</a> 
<a href="https://www.smartkarma.com/insights/drb-hi-com-more-fsps-please" target="_blank" data-smartkarma-citation="insights:10307" rel="noopener">DRB Hi-Com: More FSPs Please!</a> 
<a href="https://www.smartkarma.com/insights/proton-the-rise-of-the-machine" target="_blank" data-smartkarma-citation="insights:8787" rel="noopener">Proton: The Rise of the Machine?</a> 
<a href="https://www.smartkarma.com/insights/proton-the-rise-of-the-machine-part-deux" target="_blank" data-smartkarma-citation="insights:9037" rel="noopener">Proton:The Rise of the Machine-Part Deux</a> 
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Thanks in advance for reading this insight!  Please give this a thumbs up if you find this useful and follow me on Smartkarma for more original and actionable insights; it's free, anonymous, and helpful. Please also feel free to post a comment or message me directly if you have any queries regarding this insight. Your continuing support renders a continuity of more original and actionable insights.  
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The Malaysian auto sector rightly suffered during Q1 2020 due to the COVID-19 induced Movement Control Order (lockdown), forcing various non-essential businesses to close. However, the demand for Proton DRB-Hicom Bhd (DRB MK) was very strong - illuminating the preference shift from sedan to SUV in Malaysia. 
DRB share price took a tumble although its sales actually grew and the potential for gaining market share is quite high given the Malaysian strongly prefer SUV and Proton's X70 and X50 are sold at a relatively affordable pricing point. 
After the 53% erosion of market value in mid-March 2020, investing in DRB presents an unprecedented opportunity to gain 40% in the Malaysian auto segment. 

Related Insights

DRB Hi Com (DRB): Value Unlocking-Part II 
DRB Hi Com (DRB): Value Unlocking-Part I 
DRB Hicom (DRB): Proton to China 
DRB Hicom: The Knife Is Out 
DRB Hi-Com: More FSPs Please! 
Proton: The Rise of the Machine? 
Proton:The Rise of the Machine-Part Deux 

Thanks in advance for reading this insight!  Please give this a thumbs up if you find this useful and follow me on Smartkarma for more original and actionable insights; it's free, anonymous, and helpful. Please also feel free to post a comment or message me directly if you have any queries regarding this insight. Your continuing support renders a continuity of more original and actionable insights.  


DRB Hi Com: Winner in COVID-19 Malaysian Auto Segment

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 (7203 JP)

Nippon Paint (4612) Vs Kansai Paint (4613): Gap to Last

Nippon Paint Holdings (4612 JP) has outperformed Kansai Paint (4613 JP) despite trading in the same sector by a wide margin, mainly due to the...

Henry Soediarko

🇯🇵 JAPAN • Results & Revisions 12th May - Secom, Shiseido, Toyota, Sysmex, Mitsui Fudosan

CASCADE - As expected, with many more of the larger listed companies reporting, our three Scores are falling in unison and at the fastest rate...

Campbell Gunn

Toyota – Based on Results, Long Toyota Short Honda Should Continue to Work

Toyota (just after the lunch break) and Honda (after the close) both reported FY03/20 results today. Toyota reported strong revenue 1.5% above...

Mio Kato

🇯🇵 JAPAN • Results & Revisions 11th May - Nissin, Seria, Mitsubishi Electric, Asahi Group

NEW INTERIM LOW - As we have noted in earlier Insights in this series, only half of the companies with March year-ends are issuing forecasts for...

Campbell Gunn

DRB Hi Com: Winner in COVID-19 Malaysian Auto Segment

The Malaysian auto sector rightly suffered during Q1 2020 due to the COVID-19 induced Movement Control Order (lockdown), forcing various...

Henry Soediarko

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