Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

Softbank Corp. posted a solid Q2 helped by Internet upside, a one-time gain from how it accounts for handset instalment plans and solid upside in enterprise sales as telework/WFH trends boost sales. The company kept FY guidance intact despite H1 outperformance as there could be headwinds from mobile pricing changes and higher spending at Z Holdings but management confidence on the analyst call was high.  Importantly, the company also provided reassurance on the dividend and reduced regulatory exposure.

Softbank Corp. posted a solid Q2 helped by Internet upside, a one-time gain from how it accounts for handset instalment plans and solid upside in enterprise sales as telework/WFH trends boost sales. The company kept FY guidance intact despite H1 outperformance as there could be headwinds from mobile pricing changes and higher spending at Z Holdings but management confidence on the analyst call was high.  Importantly, the company also provided reassurance on the dividend and reduced regulatory exposure. 

Softbank Corp - Q2 20 Results: Positive Financial Report and Dividend Reassurance

Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

<ul>
<li>High-growth, High-return Kakaku.com Inc is a perfect example to demonstrate the case of quality growth;</li>
<li>Meanwhile, Tabelog, one of the company's core businesses, adds to the predictable near-term growth momentum.</li>
</ul>


High-growth, High-return Kakaku.com Inc is a perfect example to demonstrate the case of quality growth;
Meanwhile, Tabelog, one of the company's core businesses, adds to the predictable near-term growth momentum.


Two Things That We Like About Kakaku.com Inc

Equity Analyst, LightStream Research

Supun Walpola

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.

There was hardly anything positive to take away from <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a>’s 2Q FY03/20 financial results except for maybe a quick recovery in the service e-commerce business. Other than this, Z’s core businesses, Yahoo! Shopping and Yahoo! JAPAN, are gradually moving towards saturation, while its new initiatives, such as PayPay Mall and PayPay (mobile payments), are also falling behind expectations.

There was hardly anything positive to take away from Z Holdings (4689 JP)’s 2Q FY03/20 financial results except for maybe a quick recovery in the service e-commerce business. Other than this, Z’s core businesses, Yahoo! Shopping and Yahoo! JAPAN, are gradually moving towards saturation, while its new initiatives, such as PayPay Mall and PayPay (mobile payments), are also falling behind expectations. 

Z Holdings: Core-Businesses Are Getting Closer to Saturation; New Ones Fail to Impress

Z Holdings posted Q2 20 results that were modestly ahead of consensus but its first pass at full-year guidance fell well short of analyst expectations. The difference is renewed investment to leverage solid H1 growth in eCommerce/fintech users. That makes sense but it is harder to justify a 57% YTD run in the shares with FY20 operating income growth of only 5%. Operationally, some moderation in merchandise eCommerce and sluggish ad sales was more than offset by a massive rebound in online travel and continued momentum for cashless payments.

Z Holdings posted Q2 20 results that were modestly ahead of consensus but its first pass at full-year guidance fell well short of analyst expectations. The difference is renewed investment to leverage solid H1 growth in eCommerce/fintech users. That makes sense but it is harder to justify a 57% YTD run in the shares with FY20 operating income growth of only 5%. Operationally, some moderation in merchandise eCommerce and sluggish ad sales was more than offset by a massive rebound in online travel and continued momentum for cashless payments.  

Z Holdings - Q2 20 Results: Travel Business Amazes but Guidance May Be Less Appealing

In our previous note, <a href="https://www.smartkarma.com/insights/zozo-nice-results-but-it-s-just-a-covid-bump" target="_blank" data-smartkarma-citation="insights:41718" rel="noopener">Zozo – Nice Results but It’s Just a COVID Bump</a>, we suggested that <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a>'s strong 1Q results could be a temporary bump due to the stay-at-home demand, and the company could quickly return to its decelerating growth post-lockdowns. ZOZO's 2Q results show early signs of this happening and we expect a correction over the next few quarters as the impact of the stay-at-home demand further subsides and potentially weak winter sales are booked.

In our previous note, Zozo – Nice Results but It’s Just a COVID Bump, we suggested that ZOZO Inc (3092 JP)'s strong 1Q results could be a temporary bump due to the stay-at-home demand, and the company could quickly return to its decelerating growth post-lockdowns. ZOZO's 2Q results show early signs of this happening and we expect a correction over the next few quarters as the impact of the stay-at-home demand further subsides and potentially weak winter sales are booked.

Japan

LY Corporation operates as an internet search engine "Yahoo! JAPAN". The Company provides electronic commerce and settlement finance services for small medium enterprises and individuals. LY also operates media business including search linked advertising and display advertising services.

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LY (4689 JP)

Softbank Corp - Q2 20 Results: Positive Financial Report and Dividend Reassurance

For Q2 20, Softbank beat financial expectations, reassured on the dividend and highlighted how diversification has lowered regulatory exposure.

Kirk Boodry

Two Things That We Like About Kakaku.com Inc

We see Kakaku.com Inc as a superior-quality grower with predictable near-term momentum regarding one of its core product lines.

Steven Chen

Z Holdings: Core-Businesses Are Getting Closer to Saturation; New Ones Fail to Impress

Z’s core businesses are gradually moving towards saturation, while its new initiatives, such as PayPay Mall and PayPay mobile payments, are also...

Supun Walpola

Z Holdings - Q2 20 Results: Travel Business Amazes but Guidance May Be Less Appealing

Newly issued full-year guidance is well below market expectations and driven by renewed investment to build eCommerce and fintech. That is sensible...

Kirk Boodry

ZOZO: Return to Collapsing Growth

ZOZO's 2Q results show early signs of returning to decelerating growth. We expect a correction over the next few quarters as the impact of the stay...

Supun Walpola

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