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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: Elmer who wrote (3359)	6/23/2003 9:58:13 AM
From: Crossy	Respond to of 3902

Elmer, finally the BOJ is almost forced to reflate. Makes economic sense - despite many strcutural problems of Japan - especially in the macroeconomic governance system that still need to be fixed.. On the microeconomic frontier however I do see great improvements. Just as the 80ies taught American firms how to restructure, cut waste and concentrate on core competences and the FASB brought "truth in liabilities" to items such as Pension Obligations, we see similar forces at work in Japan. This is not glamourous biz but every day decisions that either do fall or do not go into the right direction. I like to tune in to Jap. company PR's in English and to the Nikkei headlines. Often you see deals either to buy out minority stakes outright, or to unwind cross shareholdings by disposal or in "round trip" fashion. Pension liabilities are either tackled gradually (incrementally special write offs over 5-10 years) or all at once - with the latter certainly being the more aggressive way to do this (makes good sense, one time charge, getting over with it immediately) Even US style successes in business strategy are either adapted or ag least given a look. I see many corporate portfolio restructurings - keeping cash cows and stars and shedding or shutting down underperformers. I see many changes in firms' remuneration systems to increase INDIVIDUAL creativity and responsibility. Even balanced scorecard type of agreements are not the extraordinary in Japan of the 21st century.. One of my holdings, NIEC - Nihon Inter (6974.J) is exactly such a situation. Sort of applying the formulae of IRF (International Rectifier) in a japanese context. No wonder, Mr. McGee is now amongst rank & file management of NIEC.. best rgrds CROSSY

To: Elmer who wrote (3359)	6/24/2003 8:16:46 AM
From: John Madarasz	Read Replies (1) \| Respond to of 3902

From that Barron's Roundtable discussion published in the latest edition, ... Felix Zulauf: I have shorted some bonds. But the big trade here is shorting the JGB [Japanese government bond]. This is the top of the Japanese bond market. It is the sell of a generation. Short JGBs, buy the Nikkei. The Japanese market is underrated. There are important changes going on in Japan. The corporate sector enjoys a financial surplus. Japanese corporations have much stronger balance sheets today than the U.S. or Europe. Twenty years ago it was just the reverse. The recent decision by the Bank of Japan to buy corporate bonds and asset-backed securities is also great news. They are pushing liquidity into the corporate sector. Again, this is very bad for JGBs. This morning the 10-year was yielding 0.43%. I think we have a relatively straight move to 2%. [Indeed, the trade already has paid off. Ten-year bonds plunged late last week to their lowest level in months, pushing yields up to 0.73% in Thursday's session.] The Nikkei fell 80% over 13 years. In April it was around 7600. Now it's up to 9000. The next move could lead us quickly to 12,000. I see a lot of great news for the world. It's been rare in recent years that I had something bullish to mention. Or, as offered on June 16 by UPI Business and Economics Editor Martin Hutchinson, ... As for Japan, that country may now have purged its 1980s bubble and be ready to expand again. Gross Domestic Product figures for the first quarter have come out higher than expected, while Japanese corporate profits, particularly for the larger companies (which one would expect to benefit first in an upturn) have also improved significantly over the past year. It can thus be hoped, with some degree of realism, that over the next couple of years Japan will, quietly and unobtrusively and to general disbelief, lead the world out of the present unpleasantness and, after several more years of purging, into renewed economic growth for the United States and Europe. www.piraz.com

To: Elmer who wrote (3359)	6/25/2003 7:39:20 AM
From: Crossy	Respond to of 3902

re: JAPAN - Ticker: JP:2511 Marusan-ai, traded on the NAGOYA stock exchange, now around 430 Yen I found this company in Japan when looking for a clone of "Medifast" (Amex: MED) a maker of nutritional products and "fitness nutraceutics" in the us. MEdifast has been a highflyer, rising from $1 to $13 and emerged from the OTC to the Amex during the last 12 months. It's ratios are quite expensive as a result of it's fantastic ride - Price/Book of 17, Price/Sales of 5. Not exactly cheap.. That prompted me to look for alternatives. One interesting firm in this regard is the Japanese company "Marusan-Ai" - carrying the Japanese Stock number 2551 trading around 430 Yen in Nagoya, the 3rd biggest market in Japan. They are among the world's biggest Soya Drink manufacturers. Heavily active in OTHER SOYA PRODUCTS also. Gross margin around 30-40% - very high for a food and beverage operation. In the US they own 1/3 to 1/4 of "American Soy Products" the BIGGEST (!) US based Soy Drink producer. Annual Sales around 17-bn Yen, around $150m USD. PSR of 0.26, PBK around 2. If you compare this to Medifast (Amex: MED, PBK 14, PSR 7) one would scratch on his head why not invest into Marusan. YahooJapan and Bigcharts allow you to plot a stock chart of your choice on japan stocks. For FY 2003 Marusan earned around 33 Yen per Share - Yahoo Japan features this but Wright Investor's have not yet updated their data with the FY2003 results : biz.yahoo.co.jp IMHO this has potential for at least a 5-bagger in 1-2 years. Driving force behind the new popularity of Soya drinks and products seems to be fitness, wellness and the realization that good parts of the western population do suffer from obesity. Wright Profile - Ticker: 2551 2002 Sales: 16,996,000,000 Yen Primary SIC: Food preparations (2099) Major Industry: Food & Beverages Sub Industry: Miscellaneous Food Country: Japan Currency: Japanese Yen Website: marusanai.co.jp Fiscal Year ends: September Employees: 369 Market Capitalization: 4,387,487,900 Total Shares Outstanding: 10,572,260 Closely Held Shares: 6,485,380 Company Description Marusan-Ai Company Limited. The Group's principal activity is to manufacture processed foods of soybeans. The Group also develops and conducts research on soybeans and micro organisms. Soybean drinks accounted for 55% of fiscal 2002 revenues, Soybean paste, 38% and Other, 7%. Competitor Analysis Marusan-Ai Company Limited operates within the Food preparations sector. This analysis compares Marusan-Ai Company Limited with three other companies in this sector in Japan: Nichiro Sunfoods Co., Ltd. (2002 sales of 14.43 billion Japanese Yen [US$121.06 million] of which 55% was Processed Foods), OHMORIYA Co., Ltd. (16.75 billion Japanese Yen [US$140.51 million] of which 40% was Home-Use Nori), and Yutaka Foods Corporation (18.57 billion Japanese Yen [US$155.80 million] of which 38% was Instant Noodles). Ratios are very good for Marusan-Ai - EPS FY2003 are 33 Yen, EPS FY2004 will be 35 Yen or better. Trailing PE of 13 but improved earnings from International exposure (American Soy) could translate into a nice windfall over the next 2 years. Price/Book under 2 now, PRice/Sales only 0.25. Pays a dividend of 6 Yen per year. Gross margin around 33-38%. Compares favourably with US food related operations. Debt/Equity is a little high right now, around 2.6 however improved profitability will allow the company to deleverage further which will translate into a nice improved earnings potential also. To me this looks like a compelling valuation and was enough for me to buy in. More DD I posted here: Message 19059285 rgrds CROSSY