Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>We anticipate a sluggish beginning to the fiscal year with 1Q8/24 earnings reflecting slower growth in Japan, China, and Southeast Asia.</li>
<li>Our forecast for 1Q24 operating profit stands at ¥130 billion, slightly below the consensus estimate of ¥138 billion. Assuming our estimates are accurate, we anticipate a slightly negative share-price reaction.</li>
<li>Our bearish stance on the stock persists, driven by the fact that it trades at a premium to our DCF and at a premium compared to global peers</li>
</ul>


We anticipate a sluggish beginning to the fiscal year with 1Q8/24 earnings reflecting slower growth in Japan, China, and Southeast Asia.
Our forecast for 1Q24 operating profit stands at ¥130 billion, slightly below the consensus estimate of ¥138 billion. Assuming our estimates are accurate, we anticipate a slightly negative share-price reaction.
Our bearish stance on the stock persists, driven by the fact that it trades at a premium to our DCF and at a premium compared to global peers


Fast Retailing (9983) | Q1 Preview - Slight Miss

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>Uniqlo is such a mainstay of Japanese retailing, and indeed life, that its dominance seems inevitable and unchanging. </li>
<li>Yet it has morphed from a mess of poorly judged acquisitions and failed overseas experiments into Japan’s biggest retail export – and still manages to pull off 20% growth.</li>
<li>Its latest target of ¥10 trillion in 10 years is far-fetched but its history of persistent determination suggests continued expansion is a certainty.</li>
</ul>


Uniqlo is such a mainstay of Japanese retailing, and indeed life, that its dominance seems inevitable and unchanging. 
Yet it has morphed from a mess of poorly judged acquisitions and failed overseas experiments into Japan’s biggest retail export – and still manages to pull off 20% growth.
Its latest target of ¥10 trillion in 10 years is far-fetched but its history of persistent determination suggests continued expansion is a certainty.


Fast Retailing: Great Fundamentals for Uniqlo, Shame About the Share Price

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.

<ul>
<li>While domestic revenues may have slowed, Uniqlo's domestic OP shows upside potential driven by gross margin growth and a gradual reduction in SG&amp;A costs.</li>
<li>Meanwhile, we expect Uniqlo’s International business OP to surpass ¥75bn, driven by a rebound in China demand  and strong momentum in South Korea, SE Asia &amp; Ocenia.</li>
<li>Thus, we see the upcoming earnings as a compelling opportunity for trading <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a>.</li>
</ul>


While domestic revenues may have slowed, Uniqlo's domestic OP shows upside potential driven by gross margin growth and a gradual reduction in SG&amp;A costs.
Meanwhile, we expect Uniqlo’s International business OP to surpass ¥75bn, driven by a rebound in China demand  and strong momentum in South Korea, SE Asia &amp; Ocenia.
Thus, we see the upcoming earnings as a compelling opportunity for trading Fast Retailing (9983 JP).


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Minimal changes in the rankings since last time. Socionext (6526), Disco (6146), and a Consumer Goods stock (Zozo (3092) top-ranked, Ryohin Keikaku (7453) a better choice) are ADDs.</li>
<li>The DELETEs are still Takara Holdings (2531), Pacific Metals (5541), Sumitomo Osaka Cement (5232) with a dark horse candidate in Hitachi Zosen (7004) to replace Takara.</li>
<li>There is the upweight to Nitori (9843) AND funkiness with Fast Retailing (9983) to consider. We are right on the threshold. The question is whether it gets "help" in January.</li>
</ul>


Minimal changes in the rankings since last time. Socionext (6526), Disco (6146), and a Consumer Goods stock (Zozo (3092) top-ranked, Ryohin Keikaku (7453) a better choice) are ADDs.
The DELETEs are still Takara Holdings (2531), Pacific Metals (5541), Sumitomo Osaka Cement (5232) with a dark horse candidate in Hitachi Zosen (7004) to replace Takara.
There is the upweight to Nitori (9843) AND funkiness with Fast Retailing (9983) to consider. We are right on the threshold. The question is whether it gets "help" in January.


March 2024 Nikkei 225 Rebal - Socionext, Disco, and a Consumer Goods Stock to ADD and ¥1trn To Trade

<ul>
<li>We once called Uniqlo the Toyota of clothing. And this remains apposite. Its consistent, reliable quality, focus on supply chain efficiency, and increasingly global renown make it a solid bet.</li>
<li>The majority of the growth last year came from overseas markets, including even the US and Europe and the appointment of Daisuke Tsukagoshi as president will boost overseas performance further.</li>
<li>Fast Retailing is talking up the potential of GU, which should make up for lower domestic growth from Uniqlo but also now thinks it can make it a global brand.</li>
</ul>


We once called Uniqlo the Toyota of clothing. And this remains apposite. Its consistent, reliable quality, focus on supply chain efficiency, and increasingly global renown make it a solid bet.
The majority of the growth last year came from overseas markets, including even the US and Europe and the appointment of Daisuke Tsukagoshi as president will boost overseas performance further.
Fast Retailing is talking up the potential of GU, which should make up for lower domestic growth from Uniqlo but also now thinks it can make it a global brand.


Fast Retailing: On to the Next (Bigger) Stage

Japan

FAST RETAILING CO., LTD. operates a chain of clothing stores, UNIQLO, throughout Japan and in other markets overseas including UK, China, Hong Kong, South Korea, US, France, Singapore and Russia.  The Company designs, manufactures, and retails its own line of casual clothing.

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Fast Retailing (9983 JP)

Fast Retailing (9983) | Q1 Preview - Slight Miss

Anticipating slow growth in Japan, China, and Southeast Asia, 1Q8/24 earnings are expected to be sluggish, leading to a slightly negative share...

Mark Chadwick

Fast Retailing: Earnings Preview

Uniqlo's domestic OP shows potential with margin growth and cost reduction, while international OP is expected to surpass ¥75bn due to rebounding...

Oshadhi Kumarasiri

March 2024 Nikkei 225 Rebal - Socionext, Disco, and a Consumer Goods Stock to ADD and ¥1trn To Trade

The March 2024 Nikkei 225 Rebalance is aiming at JPY 1 trillion to trade. The big one to the buy side is Disco (6146) but there are several large...

Travis Lundy

Fast Retailing: On to the Next (Bigger) Stage

Uniqlo's reliable quality, efficient supply chain, and global recognition make it a solid choice. Fast Retailing now sees GU compensating for...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Fast Retailing (9983) | Q1 Preview - Slight Miss

​Anticipating slow growth in Japan, China, and Southeast Asia, 1Q8/24 earnings are expected to be sluggish, leading to a slightly negative share...

Mark Chadwick

Fast Retailing: Great Fundamentals for Uniqlo, Shame About the Share Price

Insights summarises Uniqlo's strong long-term fundamentals that are providing the basis for the recent results but which are often forgotten as...

Michael Causton

Fast Retailing: Earnings Preview

​Uniqlo's domestic OP shows potential with margin growth and cost reduction, while international OP is expected to surpass ¥75bn due to rebounding...

Oshadhi Kumarasiri

March 2024 Nikkei 225 Rebal - Socionext, Disco, and a Consumer Goods Stock to ADD and ¥1trn To Trade

The March 2024 Nikkei 225 Rebalance is aiming at JPY 1 trillion to trade. The big one to the buy side is Disco (6146) but there are several large...

Travis Lundy

Fast Retailing: On to the Next (Bigger) Stage

​Uniqlo's reliable quality, efficient supply chain, and global recognition make it a solid choice. Fast Retailing now sees GU compensating for...

Michael Causton

Anticipating slow growth in Japan, China, and Southeast Asia, 1Q8/24 earnings are expected to be sluggish, leading to a slightly negative share...

Uniqlo's domestic OP shows potential with margin growth and cost reduction, while international OP is expected to surpass ¥75bn due to rebounding...

Uniqlo's reliable quality, efficient supply chain, and global recognition make it a solid choice. Fast Retailing now sees GU compensating for...