'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

Former Japan Equity PM with over 30 of experience now providing database-driven analysis of the market, sectors, peer groups and stocks for LightStream Research.

Leveraging data and graphic analysis provided by Japan Analytics, and the related Japan Analytics iPad App, we provide insights on companies are often ignored by the sell-side as well as challenging conventional wisdom on the market overall.

'Quantamental' Japan Specialist

🇯🇵 Japan • Results & Revisions Roundup Part 1 - Mr Market Calls a Bottom

🇯🇵 Japan • Results & Revisions Review - Wishful Thinking

🇯🇵 JAPAN • IT’S A WRAP! Part 2: 2020-Q1 Results & Revision Scores

Readthrough to Japanese FA Sector from Capital's SK Hynix Block Sale

Daifuku: Micro-Quantamental Analysis Points to Overoptimistic Consensus

SK Hynix:  Fund Positioning Ahead of Results

Capital's Hynix Disposal: Stake Δ Tracking, Profit % Calculation & Question of Timing

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. 

Quantitative Analysis

Japan Semiconductors and semiconductor equipment / Quantitative Analysis

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/102/797/original/2019-10-22_07-21-37.png?1571696560" class="editor-image img-responsive" data-smartkarma-image-id="102797"></figure><div class="content-caption">Source: Japan Analytics</div>There has been much discussion on Smartkarma in the last week on the 'overexuberance' in Japan's semiconductor production equipment ("SPE") and factory automation (FA) companies' share prices following a 'spike' in <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive Systems (6324 JP)</a>(HDS) as discussed <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc/discussion?discussion=56418" target="_blank" rel="noopener">here, </a>and Capital Group’s block sale in SK Hynix. <a href="https://www.smartkarma.com/companies/lightstream-research" target="_blank" data-smartkarma-citation="companies:909" rel="noopener">LightStream Research</a> explored the topic in detail in yesterday's <a href="https://www.smartkarma.com/insights/readthrough-to-japanese-fa-sector-from-capital-s-sk-hynix-block-sale" target="_blank" data-smartkarma-citation="insights:33298" rel="noopener">Readthrough to Japanese FA Sector from Capital's SK Hynix Block Sale</a>. As <a href="https://www.smartkarma.com/profiles/raghav-kapoor" target="_blank" data-smartkarma-citation="accounts:2" rel="noopener">Raghav Kapoor</a> noted in the discussion on that note: - "The trends between the pricing of the BI Japan Factory Automation Index (BIAPJAVP Index) and the SOX are strikingly similar."   This Insight will briefly examine these correlations using the Japan Analytic's scoring framework as well as updating our valuation work on <a href="https://www.smartkarma.com/entities/fanuc-corp" target="_blank" data-smartkarma-citation="entities:752:1" rel="noopener">Fanuc (6954 JP)</a>, <a href="https://www.smartkarma.com/entities/yaskawa-electric-corp" target="_blank" data-smartkarma-citation="entities:2458:1" rel="noopener">Yaskawa Electric (6506 JP)</a>, <a href="https://www.smartkarma.com/entities/daifuku-co-ltd" target="_blank" data-smartkarma-citation="entities:10408:1" rel="noopener">Daifuku (6383 JP)</a>, <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive Systems (6324 JP), </a>as well as <a href="https://www.smartkarma.com/entities/tokyo-electron-ltd" target="_blank" data-smartkarma-citation="entities:280:1" rel="noopener">Tokyo Electron (8035 JP)</a>, <a href="https://www.smartkarma.com/entities/advantest-corp" target="_blank" data-smartkarma-citation="entities:18107:1" rel="noopener">Advantest (6857 JP)</a>, and <a href="https://www.smartkarma.com/entities/disco-corp" target="_blank" data-smartkarma-citation="entities:15817:1" rel="noopener">Disco (6146 JP)</a>.     Please refer to our earlier Insight <a href="https://www.smartkarma.com/insights/6954-fanuc-timing-the-cycle" target="_blank" data-smartkarma-citation="insights:29401" rel="noopener">Fanuc • Timing the Cycle</a> for details on our scoring methodology.We conclude that, although we are likely to confirm the cycle bottom in the next few weeks as interim results are announced, the potential for recovery is more than adequately reflected in these group's extreme valuations and relative-to-market stock prices. As we noted in the discussion on HDS, "the market is re-running the playbook of 2009-2010 where earnings momentum recovered sharply [..] we think the better scenario is the more gradual recovery of  2012-2015 which saw the stock trade sideways until the recovery was well-advanced."

Source: Japan AnalyticsThere has been much discussion on Smartkarma in the last week on the 'overexuberance' in Japan's semiconductor production equipment ("SPE") and factory automation (FA) companies' share prices following a 'spike' in Harmonic Drive Systems (6324 JP)(HDS) as discussed here, and Capital Group’s block sale in SK Hynix. LightStream Research explored the topic in detail in yesterday's Readthrough to Japanese FA Sector from Capital's SK Hynix Block Sale. As Raghav Kapoor noted in the discussion on that note: - "The trends between the pricing of the BI Japan Factory Automation Index (BIAPJAVP Index) and the SOX are strikingly similar."   This Insight will briefly examine these correlations using the Japan Analytic's scoring framework as well as updating our valuation work on Fanuc (6954 JP), Yaskawa Electric (6506 JP), Daifuku (6383 JP), Harmonic Drive Systems (6324 JP), as well as Tokyo Electron (8035 JP), Advantest (6857 JP), and Disco (6146 JP).     Please refer to our earlier Insight Fanuc • Timing the Cycle for details on our scoring methodology.We conclude that, although we are likely to confirm the cycle bottom in the next few weeks as interim results are announced, the potential for recovery is more than adequately reflected in these group's extreme valuations and relative-to-market stock prices. As we noted in the discussion on HDS, "the market is re-running the playbook of 2009-2010 where earnings momentum recovered sharply [..] we think the better scenario is the more gradual recovery of  2012-2015 which saw the stock trade sideways until the recovery was well-advanced."

🇯🇵 Japan • FA & SPE - Calling Bottoms and Tops

Japan Semiconductors and Semiconductor Equipment

🇯🇵 Japan • FA & SPE - Calling Bottoms and Tops