'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 11th August - Softbank, NTT, Workman, Matsu'kiyo,

🇯🇵 JAPAN • Results & Revisions 12th August - PPI, Toshiba, McDonald's, ENEOS

🇯🇵 JAPAN • Results & Revisions 13th August - Asics, FUJIFILM, Dentsu, Mitsubishi Shoji

🇯🇵 JAPAN • Results & Revisions 5th August - Lasertec, Olympus, JAT, Sysmex, Honda, Sharp

🇯🇵 JAPAN • Stress Tests Part 5: Net Working Capital Outliers

🇯🇵 JAPAN • Results & Revisions 6th August - Nintendo, Yamada Denki, Terumo, Toyota, Shiseido

Shiseido(4911 JP): Downward Revision Imminent

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)

Japan Industrials / Thematic (Sector/Industry)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/151/378/original/2020-08-08_12-56-11.png?1596858996" class="editor-image img-responsive" data-smartkarma-image-id="151378"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>30x</strong> - Following Friday's 'peak' in this quarter's results announcements, our prediction that the market multiple would exceed 30 times by months end, occurred in one week, and aggregate forecast operating and net profits are now ¥4.3 trillion and ¥4.6 trillion lower than at the end of last month. A large number of companies that previously had avoided making full-year forecasts three months ago are now doing so, hastening the decline. The last time the market aggregate multiple was above 30 times was just before "3/11" when net income and total market value were both half the current values. Other than the 2008/9 financial crisis, the market multiple rarely exceeded 25 times in the prior decade.  </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/151/387/original/2020-08-08_15-39-59.png?1596868850" class="editor-image img-responsive" data-smartkarma-image-id="151387"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>-40%</strong> - Forecast full-year revenues are 10% lower than a year ago, and forecast operating profits are 40% below the level of August 2019. Forecast operating margins, at 4.8%, are 300 basis points below the peak of September 2018. Net margins are to decline by 318 bps to 2.7% as net income forecasts are half those of a year ago.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/151/388/original/2020-08-08_15-45-35.png?1596869157" class="editor-image img-responsive" data-smartkarma-image-id="151388"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>SECTOR FORECASTS</strong> - Four Sectors are forecasting full-year losses - <strong>Energy</strong>, <strong>Metals</strong>, <strong>Restaurants</strong> and <strong>Consumer Services</strong>, although<strong> Metals</strong> appears to be bottoming out. Only the Healthcare Sector has seen any operating margin improvement; however, that modest change is now well discounted. <strong>Autos</strong>,<strong> Utilities</strong>, and<strong> Transportation</strong> have seen 100 bps year-on-year forecast operating margin declines, but are still expecting to be in the black. The<strong> Information Technology</strong> and<strong> Non-Bank Finance</strong> (mostly Insurance) Sectors are forecasting 'flat'.</p><p style="text-align: center;"><strong>•BEST &amp; WORST 7th AUGUST •</strong></p><p style="text-align: left;">The 'best' of Friday's large-cap announcements came from <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/t-d-holdings-inc" target="_blank" data-smartkarma-citation="entities:3431:1" rel="noopener">T&amp;D Holdings (8795 JP)</a>; the worst from <a href="https://www.smartkarma.com/entities/daiichikosho-co-ltd" target="_blank" data-smartkarma-citation="entities:8629:1" rel="noopener">Daiichikosho (7458 JP)</a> and <a href="https://www.smartkarma.com/entities/kyoritsu-maintenance-co-ltd" target="_blank" data-smartkarma-citation="entities:19645:1" rel="noopener">Kyoritsu Maintenance (9616 JP)</a>.  More extensive coverage follows in the <strong>DETAIL</strong> section below.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/151/389/original/2020-08-08_16-30-24.png?1596871844" class="editor-image img-responsive" data-smartkarma-image-id="151389"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/151/390/original/2020-08-05_07-34-43.png?1596872118" class="editor-image img-responsive" data-smartkarma-image-id="151390"></figure><p></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/151/391/original/2020-08-08_16-37-27.png?1596872258" class="editor-image img-responsive" data-smartkarma-image-id="151391"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/151/392/original/2020-08-08_16-38-12.png?1596872310" class="editor-image img-responsive" data-smartkarma-image-id="151392"></figure><div class="content-caption">Source • Japan Analytics</div><div><hr></div><div><p style="text-align: center;"><strong>DAILY STATS</strong></p></div><hr><div><p><strong>PERCENTAGES</strong> -<strong> 65%</strong> of quarterly results,<strong>  76</strong>% of annual forecasts/revisions and <strong>80</strong>% of interim forecasts have negative Scores and<strong> 28%</strong> of companies reporting lost money for the quarter.</p></div><hr><div><p style="text-align: center;"><strong>663 Quarterly Results</strong></p></div><div><ul>
<li>
<strong>Results Score:</strong> 29% Positive / 6% Neutral / 65% Negative</li>
<li>
<strong>Average Results Score Change:</strong> -3.4 points</li>
<li>
<strong>Average % Change in Revenue:</strong> -10.4% Quarter YoY / -2.2% Rolling TTM YoY </li>
<li>
<strong>Average Operating Profit Margin Change:</strong> -1.3 ppt</li>
<li>
<strong>Percentage Making Quarterly Losses:</strong> 28%</li>
</ul></div><hr><div><p style="text-align: center;"><strong>196 Annual • 123 Interim Forecasts/Revisions</strong></p></div><div><ul>
<li>
<strong>Annual Forecast/Revision Score:</strong> 19% Positive / 5% Neutral / 76% Negative</li>
<li>
<strong>Interim Forecast/Revision Score Change: </strong>19% Positive / 1% Neutral / 80% Negative</li>
<li>
<strong>Average Forecast/Revision Score Change:</strong> -10.9 points</li>
</ul></div>

Source • Japan Analytics30x - Following Friday's 'peak' in this quarter's results announcements, our prediction that the market multiple would exceed 30 times by months end, occurred in one week, and aggregate forecast operating and net profits are now ¥4.3 trillion and ¥4.6 trillion lower than at the end of last month. A large number of companies that previously had avoided making full-year forecasts three months ago are now doing so, hastening the decline. The last time the market aggregate multiple was above 30 times was just before "3/11" when net income and total market value were both half the current values. Other than the 2008/9 financial crisis, the market multiple rarely exceeded 25 times in the prior decade.  Source • Japan Analytics-40% - Forecast full-year revenues are 10% lower than a year ago, and forecast operating profits are 40% below the level of August 2019. Forecast operating margins, at 4.8%, are 300 basis points below the peak of September 2018. Net margins are to decline by 318 bps to 2.7% as net income forecasts are half those of a year ago.Source • Japan AnalyticsSECTOR FORECASTS - Four Sectors are forecasting full-year losses - Energy, Metals, Restaurants and Consumer Services, although Metals appears to be bottoming out. Only the Healthcare Sector has seen any operating margin improvement; however, that modest change is now well discounted. Autos, Utilities, and Transportation have seen 100 bps year-on-year forecast operating margin declines, but are still expecting to be in the black. The Information Technology and Non-Bank Finance (mostly Insurance) Sectors are forecasting 'flat'.•BEST &amp; WORST 7th AUGUST •The 'best' of Friday's large-cap announcements came from mixi (2121 JP) and T&amp;D Holdings (8795 JP); the worst from Daiichikosho (7458 JP) and Kyoritsu Maintenance (9616 JP).  More extensive coverage follows in the DETAIL section below.Source • Japan AnalyticsDAILY STATSPERCENTAGES - 65% of quarterly results,  76% of annual forecasts/revisions and 80% of interim forecasts have negative Scores and 28% of companies reporting lost money for the quarter.663 Quarterly Results

Results Score: 29% Positive / 6% Neutral / 65% Negative

Average Results Score Change: -3.4 points

Average % Change in Revenue: -10.4% Quarter YoY / -2.2% Rolling TTM YoY 

Average Operating Profit Margin Change: -1.3 ppt

Percentage Making Quarterly Losses: 28%
196 Annual • 123 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 19% Positive / 5% Neutral / 76% Negative

Interim Forecast/Revision Score Change: 19% Positive / 1% Neutral / 80% Negative

Average Forecast/Revision Score Change: -10.9 points


🇯🇵 JAPAN • Results & Revisions 7th August - MS&AD, Mixi, SMC, Otsuka, Kyoritsu M, Hoshizaki, HDS