Global Materials | Industrials | Commodities

Rahul Jain

Equity Bottom-Up

<ul>
<li>Earnings Growth: Non-resource engines (Food, FamilyMart, ICT, Textiles) compounding at double-digit rates; mid- to high-single-digit EPS growth outlook.</li>
<li>Valuation: Trades at ~13× FY2026E P/E, in line with peers, offering steady TSR without a valuation premium.</li>
<li>Capital Returns: ¥200/share dividend + ¥150 bn buybacks underpin 40–50% payout; EPS uplift from share reduction.</li>
</ul>


Earnings Growth: Non-resource engines (Food, FamilyMart, ICT, Textiles) compounding at double-digit rates; mid- to high-single-digit EPS growth outlook.
Valuation: Trades at ~13× FY2026E P/E, in line with peers, offering steady TSR without a valuation premium.
Capital Returns: ¥200/share dividend + ¥150 bn buybacks underpin 40–50% payout; EPS uplift from share reduction.


Itochu (8001 JP) — Structural Growth, Fair Valuation, Solid TSR

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

<ul>
<li>
<a href="https://www.smartkarma.com/entities/citic-ltd" target="_blank" data-smartkarma-citation="entities:20590:1" rel="noopener">Citic Ltd (267 HK)</a> is a well-managed conglomerate trading at a big discount to its constituent parts</li>
<li>Earnings should move up from here and pays a decent dividend while you wait.</li>
<li>A member of both the the Hang Seng Index (HSI INDEX)  and the HSCCI and will attract inflows once institutional money returns</li>
</ul>



Citic Ltd (267 HK) is a well-managed conglomerate trading at a big discount to its constituent parts
Earnings should move up from here and pays a decent dividend while you wait.
A member of both the the Hang Seng Index (HSI INDEX)  and the HSCCI and will attract inflows once institutional money returns


Citic Limited - A Deeply Discounted Conglomerate in the Hang Seng Index

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. 

<ul>
<li>Warren Buffett is investing more in Japan's trading companies for a variety of reasons but Itochu stands alone in its dominance of Japan's fashion sector.</li>
<li>Itochu continues to emphasise investment in consumer brands, particularly fashion and sports, but will now adjust its decades-old playbook, introducing more direct oversight of subsidiaries and affiliates.</li>
<li>This will include a big new push to turn Vivienne Westwood into a luxury brand, upgrading Paul Smith and bringing <a href="https://www.smartkarma.com/entities/descente-ltd" target="_blank" data-smartkarma-citation="entities:8225:1" rel="noopener">Descente Ltd (8114 JP)</a> in-house</li>
</ul>


Warren Buffett is investing more in Japan's trading companies for a variety of reasons but Itochu stands alone in its dominance of Japan's fashion sector.
Itochu continues to emphasise investment in consumer brands, particularly fashion and sports, but will now adjust its decades-old playbook, introducing more direct oversight of subsidiaries and affiliates.
This will include a big new push to turn Vivienne Westwood into a luxury brand, upgrading Paul Smith and bringing Descente Ltd (8114 JP) in-house


Itochu the Fashion Giant Doubles Down on Brand Business

Event-Driven

<ul>
<li>ACT's bid for Seven &amp; I has been withdrawn and Seven will be better off long-term because of it – although we detail here how competitors are catching up fast.</li>
<li>Once York HD has been split off, the company can at last focus on its crucial local CVS operation: Japan makes up 25% of revenues but almost 50% of profits.</li>
<li>The potential is real and we are bullish on the long-term value but we would have been more bullish if the former CEO Ryuichi Isaka was still on board.</li>
</ul>


ACT's bid for Seven &amp; I has been withdrawn and Seven will be better off long-term because of it – although we detail here how competitors are catching up fast.
Once York HD has been split off, the company can at last focus on its crucial local CVS operation: Japan makes up 25% of revenues but almost 50% of profits.
The potential is real and we are bullish on the long-term value but we would have been more bullish if the former CEO Ryuichi Isaka was still on board.


The Final ACT Comedy of Errors Opens the Way for Real Value to Emerge at Seven & I

Thematic (Sector/Industry)

<ul>
<li>Consumer distribution has been transformed since 2020 through accelerated concentration of market share. While some has come about through organic growth, the real drivers have been M&amp;A and MBOs. </li>
<li>The result is a realignment of the retail leader board as companies like PPI, Welcia and Trial buy their way to the top, while others, notably Seven &amp; I, shrink.</li>
<li>Here we identify the retail leaders in driving consolidation going forward, and the intensifying pressure on both smaller retailers and the wholesalers that supply them.</li>
</ul>


Consumer distribution has been transformed since 2020 through accelerated concentration of market share. While some has come about through organic growth, the real drivers have been M&amp;A and MBOs. 
The result is a realignment of the retail leader board as companies like PPI, Welcia and Trial buy their way to the top, while others, notably Seven &amp; I, shrink.
Here we identify the retail leaders in driving consolidation going forward, and the intensifying pressure on both smaller retailers and the wholesalers that supply them.


[Japan M&A] Who Owns Who: The Growing Concentration of Power in Japanese Consumer Markets

Japan

ITOCHU Corporation is a general trading firm handling textiles, wood, machinery, metals, food, chemicals, construction materials, commodities, and energy related products such as oil and gas. The Company operates around the world. Itochu diversifies by operating in satellite communication and data communication businesses.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Itochu Corp (8001 JP)

Itochu (8001 JP) — Structural Growth, Fair Valuation, Solid TSR

Article highlights strong earnings growth in non-resource sectors, steady valuation in line with peers, and significant capital returns through...

Rahul Jain

Citic Limited - A Deeply Discounted Conglomerate in the Hang Seng Index

Citic $267 has now broken through the 9/24 highs. It has been a laggard, but its financial subsidiary companies have been doing well (Citic Bank...

Rikki Malik

Itochu the Fashion Giant Doubles Down on Brand Business

Warren Buffett is investing in Japan's trading companies for good reason but only Itochu has a big share of the fashion sector through Itochu...

Michael Causton

The Final ACT Comedy of Errors Opens the Way for Real Value to Emerge at Seven & I

ACT's bid for Seven & I withdrawn, company to focus on crucial CVS operation in Japan for long-term growth, potential vast but more bullish if...

Michael Causton

[Japan M&A] Who Owns Who: The Growing Concentration of Power in Japanese Consumer Markets

Consumer distribution has shifted post-2020, with market concentration driven by M&A and MBOs. We identify the leaders of this consolidation,...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Itochu (8001 JP) — Structural Growth, Fair Valuation, Solid TSR

​Article highlights strong earnings growth in non-resource sectors, steady valuation in line with peers, and significant capital returns through...

Rahul Jain

Citic Limited - A Deeply Discounted Conglomerate in the Hang Seng Index

Citic $267 has now broken through the 9/24 highs. It has been a laggard, but its financial subsidiary companies have been doing well (Citic Bank...

Rikki Malik

Itochu the Fashion Giant Doubles Down on Brand Business

​Warren Buffett is investing in Japan's trading companies for good reason but only Itochu has a big share of the fashion sector through Itochu...

Michael Causton

The Final ACT Comedy of Errors Opens the Way for Real Value to Emerge at Seven & I

​ACT's bid for Seven & I withdrawn, company to focus on crucial CVS operation in Japan for long-term growth, potential vast but more bullish if...

Michael Causton

[Japan M&A] Who Owns Who: The Growing Concentration of Power in Japanese Consumer Markets

​Consumer distribution has shifted post-2020, with market concentration driven by M&A and MBOs. We identify the leaders of this consolidation,...

Michael Causton

Article highlights strong earnings growth in non-resource sectors, steady valuation in line with peers, and significant capital returns through...

Warren Buffett is investing in Japan's trading companies for good reason but only Itochu has a big share of the fashion sector through Itochu...

ACT's bid for Seven & I withdrawn, company to focus on crucial CVS operation in Japan for long-term growth, potential vast but more bullish if...

Consumer distribution has shifted post-2020, with market concentration driven by M&A and MBOs. We identify the leaders of this consolidation,...