'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 • Revisions & Results 9th April - Communication Breakdown

🇯🇵 JAPAN MARKET (& COVID-19) UPDATE - 12th April • To Each Their Own

Yaskawa – First Peek at FA Earnings Cycle Suggests Recovery but One Which Won’t Justify Valuations

🇯🇵 JAPAN • Revisions & Results Update 7th April - His Finest Hour

🇯🇵 JAPAN • Revisions & Results Update 6th April - The Japanese Experiment

🇯🇵 JAPAN MARKET UPDATE 5th April 2020 • Overshoot

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 Consumer discretionary / Thematic (Sector/Industry)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/200/original/2020-04-09_06-30-15.png?1586381444" class="editor-image img-responsive" data-smartkarma-image-id="127200"></figure><div class="content-caption">Source • NHK</div><p><strong>SOCIAL SPREADING</strong> - As the restrictions are implemented with varying degrees of compliance in the designated prefectures in Japan, Japan's case-count continues to climb and is becoming more widespread geographically. There is anecdotal evidence of movement by those that can afford to do so to other areas of the country, which perhaps explains some of these increases. The Governor of Okinawa, which saw five new cases yesterday, has pleaded with citizens of other parts of Japan not to travel there. Meanwhile, the Mayor of Nagoya has been over-ruled by the Bolsonaro-like Governor of Aichi Prefecture in his request to implement stricter controls. A similar dynamic is playing out between the Governor of Tokyo, which saw a new high of 144 new cases yesterday, and the national government.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/201/original/IMG_1197.jpg?1586382076" class="editor-image img-responsive" data-smartkarma-image-id="127201"></figure><div class="content-caption">Source • NHK</div><p><strong>THE PATH TO 80%</strong> -  Japan's goal is to reduce social mobility by 80% and, as measured by activity on the <em>Yamanote</em> rail loop-line around central Tokyo, this was largely achieved last weekend. The reduction on weekdays at peak times from 30th March to 3rd April is still 40% as is activity at the famous Shibuya 'scramble' crossing as shown above. From personal observation, the public and businesses have yet to respond fully to the government's recommendations and there is still confusion as to which business can stay open and if so under what conditions they should operate. The default position, so far, for most non-leisure-related consumer-facing companies is to remain open with customer-distancing.  As the UK has learned to its cost, consistent and repeated messaging is required to ensure even a minimal level of compliance.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/205/original/2020-04-09_07-03-22.png?1586383423" class="editor-image img-responsive" data-smartkarma-image-id="127205"></figure><div class="content-caption">Source • OECD, Financial Times</div><p><strong>FALLOUT</strong> - Forty-two companies have already declared bankruptcy since the onset of COVID-19, all of which are hotels or tour companies. In light of the unclear messaging on compensation for businesses, a Tokyo taxi company yesterday laid off all of its 600 drivers recommending that claiming unemployment benefit would be the quickest way for them to receive benefits while suggesting they would be rehired at a later date. Unsurprisingly the 'Economy Watchers' survey which measures confidence in an array of 1,812 retail, restaurant and service-industry staff fell to 14.2 in March, the lowest score since the series started in 2002. The more robust Cabinet Office index of consumer confidence covering 6,806 households reached an eleven-year low of 30.9, slightly ahead of the March 2009 low of 29.4 and downgraded its assessment to 'worsening'. The OECD has published some ominous forecasts for the potential impact on GDP broken down by sector. We consider this to be a 'worst-case' scenario in the event of a full shutdown of social activity which the government is trying to avoid at all costs.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/212/original/File%202020-04-09%204%2005%2042.jpeg?1586384975" class="editor-image img-responsive" data-smartkarma-image-id="127212"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/214/original/2020-04-09_03-38-04.png?1586385031" class="editor-image img-responsive" data-smartkarma-image-id="127214"></figure><div class="content-caption">Source • Financial Times</div><div class="content-caption"></div><p><strong>PROPORTIONATE RESPONSE</strong> - In this respect, it is important to reflect that the case and absolute fatality rates from COVID-19 in Japan (as is also true in Taiwan, Singapore and South Korea) are very low. Medical scientists and several recent <strong><a href="https://www.icnarc.org/About/Latest-News/2020/03/22/Report-On-196-Patients-Critically-Ill-With-Covid-19" target="_blank" rel="noopener">studies</a></strong>have posited that these benign outcomes may be related to a variety of physiological and environmental factors such as nutrition, obesity, air quality and exposure to Vitamin-D producing sunlight. Such factors may also explain the outcomes so far in Australia and Argentina relative to Spain and Italy. Having experienced the twin traumas of the 2008 financial crisis and the events of "3/11", the Japanse government and Japanese industry are pursuing a measured response which, we believe, will result in a less traumatic economic outcome than other developed countries may experience. Some Twitter 'wags' have compared the chart above to Hokusai's famous ukiyo-e print "<em>Kanagawa-oki Nami Ura</em>". The natural metaphor is quite apt as is the enduring quality of Fuji-san in the distance.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/216/original/2020-04-09_03-36-31.png?1586386089" class="editor-image img-responsive" data-smartkarma-image-id="127216"></figure><div class="content-caption">Source • Hokusai</div><p>In the <strong>DETAIL</strong> below, we shall review the fourteen results announcements and twelve revisions or initial forecasts. The positive/negative balance for results was 9:5, for revisions and forecasts the split was 2:0:9 continuing the recent trend of pessimistic outlooks for consumer-orientated businesses. </p>

Source • NHKSOCIAL SPREADING - As the restrictions are implemented with varying degrees of compliance in the designated prefectures in Japan, Japan's case-count continues to climb and is becoming more widespread geographically. There is anecdotal evidence of movement by those that can afford to do so to other areas of the country, which perhaps explains some of these increases. The Governor of Okinawa, which saw five new cases yesterday, has pleaded with citizens of other parts of Japan not to travel there. Meanwhile, the Mayor of Nagoya has been over-ruled by the Bolsonaro-like Governor of Aichi Prefecture in his request to implement stricter controls. A similar dynamic is playing out between the Governor of Tokyo, which saw a new high of 144 new cases yesterday, and the national government.Source • NHKTHE PATH TO 80% -  Japan's goal is to reduce social mobility by 80% and, as measured by activity on the Yamanote rail loop-line around central Tokyo, this was largely achieved last weekend. The reduction on weekdays at peak times from 30th March to 3rd April is still 40% as is activity at the famous Shibuya 'scramble' crossing as shown above. From personal observation, the public and businesses have yet to respond fully to the government's recommendations and there is still confusion as to which business can stay open and if so under what conditions they should operate. The default position, so far, for most non-leisure-related consumer-facing companies is to remain open with customer-distancing.  As the UK has learned to its cost, consistent and repeated messaging is required to ensure even a minimal level of compliance.Source • OECD, Financial TimesFALLOUT - Forty-two companies have already declared bankruptcy since the onset of COVID-19, all of which are hotels or tour companies. In light of the unclear messaging on compensation for businesses, a Tokyo taxi company yesterday laid off all of its 600 drivers recommending that claiming unemployment benefit would be the quickest way for them to receive benefits while suggesting they would be rehired at a later date. Unsurprisingly the 'Economy Watchers' survey which measures confidence in an array of 1,812 retail, restaurant and service-industry staff fell to 14.2 in March, the lowest score since the series started in 2002. The more robust Cabinet Office index of consumer confidence covering 6,806 households reached an eleven-year low of 30.9, slightly ahead of the March 2009 low of 29.4 and downgraded its assessment to 'worsening'. The OECD has published some ominous forecasts for the potential impact on GDP broken down by sector. We consider this to be a 'worst-case' scenario in the event of a full shutdown of social activity which the government is trying to avoid at all costs.Source • Financial TimesPROPORTIONATE RESPONSE - In this respect, it is important to reflect that the case and absolute fatality rates from COVID-19 in Japan (as is also true in Taiwan, Singapore and South Korea) are very low. Medical scientists and several recent studieshave posited that these benign outcomes may be related to a variety of physiological and environmental factors such as nutrition, obesity, air quality and exposure to Vitamin-D producing sunlight. Such factors may also explain the outcomes so far in Australia and Argentina relative to Spain and Italy. Having experienced the twin traumas of the 2008 financial crisis and the events of "3/11", the Japanse government and Japanese industry are pursuing a measured response which, we believe, will result in a less traumatic economic outcome than other developed countries may experience. Some Twitter 'wags' have compared the chart above to Hokusai's famous ukiyo-e print "Kanagawa-oki Nami Ura". The natural metaphor is quite apt as is the enduring quality of Fuji-san in the distance.Source • HokusaiIn the DETAIL below, we shall review the fourteen results announcements and twelve revisions or initial forecasts. The positive/negative balance for results was 9:5, for revisions and forecasts the split was 2:0:9 continuing the recent trend of pessimistic outlooks for consumer-orientated businesses. 

🇯🇵 JAPAN • Revisions & Results 8th April - Getting to 80%▼& The GDP Contraction Lottery