Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sre-holdings-corp" target="_blank" data-smartkarma-citation="entities:29672:1" rel="noopener">SRE Holdings Corp (2980 JP)</a> last week announced an offering of new shares and a secondary share sale by <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> of the bulk of its holdings.</li>
<li>The Z Holdings sale coincides with a "new business alliance" between SRE and Yahoo. At first glance, it appears as if both sides have decided to rejig what they do.</li>
<li>SRE has an interesting business model which is quite growthy. It is growthier than it planned and others expected, but the stock has fallen 70% in 3mos. It's a buy.</li>
</ul>



SRE Holdings Corp (2980 JP) last week announced an offering of new shares and a secondary share sale by Z Holdings (4689 JP) of the bulk of its holdings.
The Z Holdings sale coincides with a "new business alliance" between SRE and Yahoo. At first glance, it appears as if both sides have decided to rejig what they do.
SRE has an interesting business model which is quite growthy. It is growthier than it planned and others expected, but the stock has fallen 70% in 3mos. It's a buy.


SRE Holdings (2980 JP) Offering - New Higher Growth at New Lower Multiple

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)

<ul>
<li>This is an in-depth review of Japanese e-commerce in the last 18 months, a time when e-commerce expanded rapidly and by 2023, e-commerce will be Japan’s single biggest retail channel.</li>
<li>We are now riding a wave of change as retailers integrate the e-commerce channel into their businesses, increasingly approaching a true omnichannel model.</li>
<li>And this is important in Japan because, although e-commerce penetration appears low, this overlooks the importance, convenience and ease of access to physical shops and integration with online.</li>
</ul>


This is an in-depth review of Japanese e-commerce in the last 18 months, a time when e-commerce expanded rapidly and by 2023, e-commerce will be Japan’s single biggest retail channel.
We are now riding a wave of change as retailers integrate the e-commerce channel into their businesses, increasingly approaching a true omnichannel model.
And this is important in Japan because, although e-commerce penetration appears low, this overlooks the importance, convenience and ease of access to physical shops and integration with online.


<ul>
<li>Analysts are expecting cashless payments in Japan for 2021 to show further accelerated growth in the use of mobile payment apps.</li>
<li>Surveys suggest consumers rapidly increased their use of mobile payments and are even expressing frustration when the service is unavailable. </li>
<li>PayPay is utterly dominant with nearly 50% share based on survey responses. We expect consolidation below from NTT, Mercari, Rakuten and KDDI.</li>
</ul>


Analysts are expecting cashless payments in Japan for 2021 to show further accelerated growth in the use of mobile payment apps.
Surveys suggest consumers rapidly increased their use of mobile payments and are even expressing frustration when the service is unavailable. 
PayPay is utterly dominant with nearly 50% share based on survey responses. We expect consolidation below from NTT, Mercari, Rakuten and KDDI.


Growth in Cashless Payments Surges in Japan – PayPay Totally Dominant

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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 Bottom-Up

<ul>
<li>Mercari opened down 11.7% and has now recovered to be down “only” 8.5%. </li>
<li>While our impression of results yesterday was negative the intensity of the move is overdone in our view. </li>
<li>We still believe that momentum is likely to be muted for a while but the current price is not unattractive.</li>
</ul>


Mercari opened down 11.7% and has now recovered to be down “only” 8.5%. 
While our impression of results yesterday was negative the intensity of the move is overdone in our view. 
We still believe that momentum is likely to be muted for a while but the current price is not unattractive.


<ul>
<li>We got this wrong, expecting a beat on margins in spite of weak GMV, whereas Mercari actually fell into the red for the first time in six quarters. </li>
<li>The culprit is extremely aggressive promotional spend which looks to have hit all time highs in both Japan and the US. </li>
<li>The shift to an investment stance is not in and of itself a bad thing but the growth relative to the spend is disappointing so far.</li>
</ul>


We got this wrong, expecting a beat on margins in spite of weak GMV, whereas Mercari actually fell into the red for the first time in six quarters. 
The culprit is extremely aggressive promotional spend which looks to have hit all time highs in both Japan and the US. 
The shift to an investment stance is not in and of itself a bad thing but the growth relative to the spend is disappointing so far.


Japan

Mercari, Inc. operates as an electronic commercial company. The Company offers electronic commercial software, operation management, marketing planning, and other marketplace services. Mercari serves customers worldwide.

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Mercari (4385 JP)

SRE Holdings (2980 JP) Offering - New Higher Growth at New Lower Multiple

SRE and Yahoo are re-jigging their business tie-up, and Yahoo is selling most of its shares in SRE. Shares are down 70% from 14 weeks ago. That's...

Travis Lundy

E-Commerce in Japan: The Big Review

Japan's e-commerce sector expanded rapidly in the last 18 months. The following is a complete review and analysis of the major trends as well as...

Michael Causton

Growth in Cashless Payments Surges in Japan – PayPay Totally Dominant

Japan is shifting from 80-90% cash retail transactions to 40-50% cashless in the blink of an eye. Softbank/Z HD dominates with nearly 50% share and...

Michael Causton

Mercari – Don’t Panic Sell

Mercari opened down 11.7% and has now recovered to be down “only” 8.5%. While our impression of results yesterday was negative the intensity of the...

Mio Kato

Mercari – Margin Miss Not Beat

We got this wrong, expecting a beat on margins whereas Mercari actually fell into the red. A shift to an investment stance is not bad but the...

Mio Kato

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