Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

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.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/miniso-group-holdings" target="_blank" data-smartkarma-citation="entities:29673:1" rel="noopener">MINISO Group Holdings (MNSO US)</a> is the leading variety retailer of lifestyle products globally with an aggregate GMV of RMB 19.0 billion (US$2.7 billion) and revenue of RMB 9.0 billion (US$1.3 billion).
Last week, the company filed an updated prospectus with the SEC announcing the price range for the NYSE IPO. The price range was set at $16.50-$18.50 per ADS, which translates to $4.125-$4.625 per share.
MINISO plans to raise $502m-$562m via issuing 16.5m new ADS (122m-140m new shares). An overallotment option, if exercised, could increase the IPO by $75m-$84m (4.6m new ADS).
Previously, we discussed MINISO's business model and financials in <a href="https://www.smartkarma.com/insights/miniso-ipo-long-term-growth-prospects-secured-by-a-sustainable-competitive-advantage" target="_blank" rel="noopener">MINISO IPO: Long Term Growth Prospects Secured By a Sustainable Competitive Advantage</a> and <a href="https://www.smartkarma.com/insights/miniso-ipo-as-appealing-as-miniso-products" target="_blank" rel="noopener">MINISO IPO: As Appealing As MINISO Products</a>.
This insight will focus on valuation and assess if it is worthwhile subscribing to the IPO.

MINISO Group Holdings (MNSO US) is the leading variety retailer of lifestyle products globally with an aggregate GMV of RMB 19.0 billion (US$2.7 billion) and revenue of RMB 9.0 billion (US$1.3 billion).
Last week, the company filed an updated prospectus with the SEC announcing the price range for the NYSE IPO. The price range was set at $16.50-$18.50 per ADS, which translates to $4.125-$4.625 per share.
MINISO plans to raise $502m-$562m via issuing 16.5m new ADS (122m-140m new shares). An overallotment option, if exercised, could increase the IPO by $75m-$84m (4.6m new ADS).
Previously, we discussed MINISO's business model and financials in MINISO IPO: Long Term Growth Prospects Secured By a Sustainable Competitive Advantage and MINISO IPO: As Appealing As MINISO Products.
This insight will focus on valuation and assess if it is worthwhile subscribing to the IPO.

MINISO Valuation: Valued Like MINISO Merchandise - Bang for the Buck

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/miniso-group-holdings" target="_blank" data-smartkarma-citation="entities:29673:1" rel="noopener">MINISO Group Holdings (MNSO US)</a> is the largest global branded variety retailer of lifestyle products, with a 5.2% market share of the GMV of the global branded variety retail market in 2019, according to Frost &amp; Sullivan. Miniso has launched its IPO at a price range of $16.50-18.50 per ADS. At the mid-point of the IPO price range, Miniso will raise net proceeds of $504.2 million. <div><div><div class="content-highlight">In <a href="https://www.smartkarma.com/insights/miniso-group-ipo-initiation-chain-reaction" target="_blank" rel="noopener">our initiation note</a>, we stated that setting aside the short-term negative impact due to COVID-19, Miniso presents a unique opportunity to gain exposure to the global branded variety retail market which is driven by consumers’ increasing focus on product design and value for money. We opined that Miniso’s fundamentals offer more positives than negatives. Overall, our valuation analysis suggests that the IPO price range is attractive.</div></div></div>

MINISO Group Holdings (MNSO US) is the largest global branded variety retailer of lifestyle products, with a 5.2% market share of the GMV of the global branded variety retail market in 2019, according to Frost &amp; Sullivan. Miniso has launched its IPO at a price range of $16.50-18.50 per ADS. At the mid-point of the IPO price range, Miniso will raise net proceeds of $504.2 million. In our initiation note, we stated that setting aside the short-term negative impact due to COVID-19, Miniso presents a unique opportunity to gain exposure to the global branded variety retail market which is driven by consumers’ increasing focus on product design and value for money. We opined that Miniso’s fundamentals offer more positives than negatives. Overall, our valuation analysis suggests that the IPO price range is attractive.

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Thematic (Sector/Industry)

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.The following is an in-depth review of Japan's retail sector, providing:<ul>
<li>An overview of consumer demand and retail performance</li>
<li>Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.</li>
<li>Rankings: <ul>
<li>Market share and size by sector/format</li>
<li>By sales for all retailers with sales over ¥250 billion</li>
<li>By gross and operating margins, split by format and category.</li>
</ul>
</li>
</ul>As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part I which provides a quick overview of all retailing. Part II, which provides snapshot reviews of each format/sector <a href="https://www.smartkarma.com/insights/japan-retail-review-2019-20-part-ii-a-sector-by-sector-review-of-winners-and-losers" target="_blank" rel="noopener">can be read here</a>.

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.The following is an in-depth review of Japan's retail sector, providing:
An overview of consumer demand and retail performance
Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.
Rankings: 
Market share and size by sector/format
By sales for all retailers with sales over ¥250 billion
By gross and operating margins, split by format and category.


As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part I which provides a quick overview of all retailing. Part II, which provides snapshot reviews of each format/sector can be read here.

The Japan Retail Review: Winners and Losers in Japanese Retailing (Part I)

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.
Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.
Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.
The following is an in-depth review of Japan's retail sector, providing:
<ul>
<li>An overview of consumer demand and retail performance</li>
<li>Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.</li>
<li>Rankings:
<ul>
<li>Market share and size by sector/format</li>
<li>By sales for all retailers with sales over ¥250 billion</li>
<li>By gross and operating margins, split by format and category.</li>
</ul>
</li>
</ul>
As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. <a href="https://www.smartkarma.com/insights/the-japan-retail-review-winners-and-losers-in-japanese-retailing-part-i" target="_blank" rel="noopener">Part I, which provides a quick overview of all retailing, can be read here</a>.

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.
Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.
Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.
The following is an in-depth review of Japan's retail sector, providing:

An overview of consumer demand and retail performance
Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.
Rankings:

Market share and size by sector/format
By sales for all retailers with sales over ¥250 billion
By gross and operating margins, split by format and category.



As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. Part I, which provides a quick overview of all retailing, can be read here.

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

Event-Driven

<a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> has completed its buyout of Familymart (see <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy's</a> insights <a href="https://www.smartkarma.com/insights/itochu-gets-the-famima-hunnypot-and-now-things-get-funky" target="_blank" rel="noopener">here</a>, <a href="https://www.smartkarma.com/insights/itochu-haz-opinionz-about-familymart" target="_blank" rel="noopener">here</a>, <a href="https://www.smartkarma.com/insights/japan-needs-more-cowbell" target="_blank" rel="noopener">here</a> and <a href="https://www.smartkarma.com/insights/the-amended-familymart-document-is-a-must-read-for-investor-stewards" target="_blank" rel="noopener">here</a>). Itochu has clearly taken full advantage of a depressed Familymart share price and an opportunity for the trading house to begin more adventurous diversification of the convenience store business.
This will include moving into more types of food format, including its nascent hybrid store collaborations with supermarkets and drugstores and an upcoming push into e-commerce, but will also mean more integration with Itochu's food wholesale business – which when combined is bigger than that of its arch rival, <a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi Corp (8058 JP).</a>
Mitsubishi and Itochu have been playing catch-up with each other for the last two decades in a race to build Japan's first integrated food wholesale-retail businesses.
Now that Itochu has succeeded in its bid, the question remains whether Mitsubishi will now look to consolidate its own food retail assets like <a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson Inc (2651 JP)</a> and <a href="https://www.smartkarma.com/entities/life-corp" target="_blank" data-smartkarma-citation="entities:1743:1" rel="noopener">Life Corp (8194 JP).</a>

Itochu Corp (8001 JP) has completed its buyout of Familymart (see Travis Lundy's insights here, here, here and here). Itochu has clearly taken full advantage of a depressed Familymart share price and an opportunity for the trading house to begin more adventurous diversification of the convenience store business.
This will include moving into more types of food format, including its nascent hybrid store collaborations with supermarkets and drugstores and an upcoming push into e-commerce, but will also mean more integration with Itochu's food wholesale business – which when combined is bigger than that of its arch rival, Mitsubishi Corp (8058 JP).
Mitsubishi and Itochu have been playing catch-up with each other for the last two decades in a race to build Japan's first integrated food wholesale-retail businesses.
Now that Itochu has succeeded in its bid, the question remains whether Mitsubishi will now look to consolidate its own food retail assets like Lawson Inc (2651 JP) and Life Corp (8194 JP).

Familymart: What's Next? And Will Mitsubishi React?

Japan

Pan Pacific International Holdings Corporation operates discount stores which sell consumer electronics, daily necessities, groceries, watches, and sporting goods. The Company mostly operates small scale stores based in Tokyo.

Pan Pacific International Holdings (7532 JP)

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Pan Pacific International Holdings (7532 JP)

MINISO Valuation: Valued Like MINISO Merchandise - Bang for the Buck

MINISO Group Holdings is the leading variety retailer of lifestyle products globally with an aggregate GMV of RMB 19.0 billion (US$2.7 billion) and...

Oshadhi Kumarasiri

MINISO Group IPO: Valuation Insights

MINISO Group Holdings (MNSO US) is the largest global branded variety retailer of lifestyle products, with a 5.2% market share of the GMV of the...

Arun George

The Japan Retail Review: Winners and Losers in Japanese Retailing (Part I)

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of...

Michael Causton

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of...

Michael Causton

Familymart: What's Next? And Will Mitsubishi React?

Itochu initiated a buyout for an additional 10% of Familymart shares over the summer. The move is widely seen as Itochu taking full advantage of a...

Michael Causton

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