Baillie Gifford Shin Nippon has published results for the year ended 31 January 2015. The company’s net asset value return lagged that of the MSCI Japan Small Cap Index by 1.5% over the year, returning 11.7% against the Index’s 13.2%. Shareholders suffered as the company’s shares went from a premium to a discount of 6.6% – as a result the share price fell by 2.1%.
Shin Nippon’s underperformance of the Index over the period should be put in the context of it outperforming by 58% over the last three years.
The manager’s report says several stocks did well. Asics has continued to see strong sales growth of its running shoes outside Japan, particularly in developing markets. In the healthcare sector, M3 has been successfully developing additional profitable segments that take advantage of the vast online network of doctors that the company has accumulated around the world. Meanwhile, Sysmex’s advanced blood testing equipment has been selling well in China. One of the earlier new purchases in the financial year, Cookpad, was another strong performer; profits from advertising on the company’s popular recipe website have been advancing quickly. Against this, performance from some of the earlier stage internet related businesses has been disappointing. Profit growth at Yume No Machi, the online takeaway ordering service, and Oisix, the organic online supermarket, has been held back by extra marketing costs incurred to build the companies’ brands.
BGS : Shin Nippon suffers as discount widens