Japan Experts, Extraordinary Performance, Astris Advisory Japan

Astris Advisory Japan

Japan Experts, Extraordinary Performance

Our Corporate Advisory service is designed to give clients access to a wider range of investors. These include Japan specialists as well as global investors. The goal is to help achieve a fair equity valuation.

Equity Bottom-Up

<ul><li>Solid earnings visibility – Q1-3 FY3/24 results were in line with recently revised company guidance, with the core earnings driver being the Profit-Generating Funeral Services segment.</li><li>Positive trends seen in Q2 FY3/24 continued QoQ, with growth in services and high utilization rates from the newly expanded funeral halls.</li><li>The legacy Information segment (print media) relatively underperformed, and the company is continuing cost improvement efforts.</li></ul>

Solid earnings visibility – Q1-3 FY3/24 results were in line with recently revised company guidance, with the core earnings driver being the Profit-Generating Funeral Services segment.Positive trends seen in Q2 FY3/24 continued QoQ, with growth in services and high utilization rates from the newly expanded funeral halls.The legacy Information segment (print media) relatively underperformed, and the company is continuing cost improvement efforts.

KOSAIDO Holdings (7868) - Strong Underlying Momentum Pointing to Sustainable Growth

<ul><li>Capitalizing on growth opportunities – Q1-2 FY3/2024 results were ahead of company guidance, driven by the Funeral Services segment, as attendee numbers and refreshment sales grew, and new funeral hall openings saw higher than expected utilization rates.</li><li>We believe this indicates the strong competitive positioning the company has as the market-leading funeral services operator in the Tokyo metropolitan area.</li><li>With effective cost control in the Information and HR segments, the company has high earnings visibility and raised FY3/2024 company guidance, as well as increasing the planned dividend payout ratio to 32.5% from 30%.</li></ul>

Capitalizing on growth opportunities – Q1-2 FY3/2024 results were ahead of company guidance, driven by the Funeral Services segment, as attendee numbers and refreshment sales grew, and new funeral hall openings saw higher than expected utilization rates.We believe this indicates the strong competitive positioning the company has as the market-leading funeral services operator in the Tokyo metropolitan area.With effective cost control in the Information and HR segments, the company has high earnings visibility and raised FY3/2024 company guidance, as well as increasing the planned dividend payout ratio to 32.5% from 30%.

KOSAIDO Holdings (7868) - Showcasing Growth Through Competitive Advantage

<div><div><div><div><ul><li>Robust barriers to entry and generating attractive returns – KOSAIDO Holdings is the market-leading funeral services operator in the Tokyo metropolitan area, with a 70% market share in cremations.</li><li>The company's robust economic moat is derived from its dominant market position as the primary operator of crematorium services in central Tokyo.</li><li>The low likelihood of new entrants due to stringent legal and political barriers further solidifies its competitive advantage. </li></ul></div></div></div></div>

Robust barriers to entry and generating attractive returns – KOSAIDO Holdings is the market-leading funeral services operator in the Tokyo metropolitan area, with a 70% market share in cremations.The company's robust economic moat is derived from its dominant market position as the primary operator of crematorium services in central Tokyo.The low likelihood of new entrants due to stringent legal and political barriers further solidifies its competitive advantage. 

KOSAIDO Holdings (7868) - Wide Economic Moat Providing a Major Competitive Advantage

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<p>Headquartered in Shanghai, <a href="https://www.smartkarma.com/entities/fu-shou-yuan-international" target="_blank" data-smartkarma-citation="entities:18168:1" rel="noopener">Fu Shou Yuan International (1448 HK)</a> (FSY) is one of the largest funeral home companies worldwide with revenue of US$289mn in 2020.</p>
<p>China has high entry barriers for the death care industry as local governments enforce licensing caps. Coupled with a shortage of burial space, an increasing wealthy portion of the population, and the social stigma attached to the business, FSY enjoys high margins amid a relatively inelastic demand.</p>
<p>Shares are down 12% from the recent high in May. A sound investment or is this dead money?</p>

Headquartered in Shanghai, Fu Shou Yuan International (1448 HK) (FSY) is one of the largest funeral home companies worldwide with revenue of US$289mn in 2020.
China has high entry barriers for the death care industry as local governments enforce licensing caps. Coupled with a shortage of burial space, an increasing wealthy portion of the population, and the social stigma attached to the business, FSY enjoys high margins amid a relatively inelastic demand.
Shares are down 12% from the recent high in May. A sound investment or is this dead money?

Fu Shou Yuan (1448 HK): No Stiff Competition

Travis Lundy

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a>'s subsidiary has <a href="https://www3.nhk.or.jp/news/html/20220930/k10013843881000.html" target="_blank" rel="noopener">reportedly</a> filed its application to become a Bank Holding Company, the definition being a company holding a 50% or greater stake in a bank.</li>
<li>The day after I last wrote, Shinsei <a href="https://www.shinseibank.com/corporate/en/news/pdf/pdf2022/221003_corporatenameLP_e.pdf" target="_blank" rel="noopener">announced</a> it had received approval to change its name to SBI Shinsei Bank as of 4 January 2023.</li>
<li>My expectation is the move above 50% happens sooner rather than later. And in that case, investors should think about their approach. Get your cowbells ready.</li>
</ul>



SBI Holdings (8473 JP)'s subsidiary has reportedly filed its application to become a Bank Holding Company, the definition being a company holding a 50% or greater stake in a bank.
The day after I last wrote, Shinsei announced it had received approval to change its name to SBI Shinsei Bank as of 4 January 2023.
My expectation is the move above 50% happens sooner rather than later. And in that case, investors should think about their approach. Get your cowbells ready.


Thinking Strategically About a Shinsei Position - Things To Do NOW

Japan

KOSAIDO Co., Ltd. provides commercial printing services.  The Company also develops and markets computer software and provides information processing systems.

Kosaido (7868 JP)

KOSAIDO Holdings (7868) - Strong Underlying Momentum Pointing to Sustainable Growth

Solid earnings visibility – Q1-3 FY3/24 results were in line with recently revised company guidance, with the core earnings driver being the Profit...

Astris Advisory Japan

KOSAIDO Holdings (7868) - Showcasing Growth Through Competitive Advantage

We believe this indicates the strong competitive positioning the company has as the market-leading funeral services operator in the Tokyo...

Astris Advisory Japan

KOSAIDO Holdings (7868) - Wide Economic Moat Providing a Major Competitive Advantage

The company's robust economic moat is derived from its dominant market position as the primary operator of crematorium services in central Tokyo.

Astris Advisory Japan

Fu Shou Yuan (1448 HK): No Stiff Competition

Fu Shou Yuan is an attractive business: the largest player in China, high margins, high entry barriers, and relatively low capex needs. One to buy...

David Blennerhassett

Thinking Strategically About a Shinsei Position - Things To Do NOW

Shinsei Bank may be in its last throes of independence. Shareholders usually do not get the chance to pester the Board before a price is...

Travis Lundy