IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/albis-co-ltd" target="_blank" data-smartkarma-citation="entities:16344:1" rel="noopener">Albis Co Ltd (7475 JP)</a> announced a tender offer from <a href="https://www.smartkarma.com/entities/life-corp" target="_blank" data-smartkarma-citation="entities:1743:1" rel="noopener">Life Corp (8194 JP)</a> at JPY3,780, a 51.2% premium to the last close of JPY2,500.  </li>
<li>Despite the lack of an auction and being marginally below book value (P/B of 0.95x), the offer is attractive compared to historical trading ranges and peer multiples.</li>
<li>The offer is above the midpoint of the target IFA’s DCF valuation range. The required minority acceptance rate to meet the lower limit is achievable. This is a done deal. </li>
</ul>



Albis Co Ltd (7475 JP) announced a tender offer from Life Corp (8194 JP) at JPY3,780, a 51.2% premium to the last close of JPY2,500.  
Despite the lack of an auction and being marginally below book value (P/B of 0.95x), the offer is attractive compared to historical trading ranges and peer multiples.
The offer is above the midpoint of the target IFA’s DCF valuation range. The required minority acceptance rate to meet the lower limit is achievable. This is a done deal. 


Albis (7475 JP): Life Corp (8194 JP)’s Tender Offer at JPY3,780

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>There has been a long-term trend of market concentration in Japan's retail sector for more than a decade.</li>
<li>But consolidation is accelerating due to the pressures to find growth in a depopulating market and the winner takes all phenomenon which rewards the leading chains.</li>
<li>With higher growth and greater access to capital for the best retailers, the net result is dramatically higher levels of M&amp;A in sectors like drugstores and even supermarkets.  </li>
</ul>


There has been a long-term trend of market concentration in Japan's retail sector for more than a decade.
But consolidation is accelerating due to the pressures to find growth in a depopulating market and the winner takes all phenomenon which rewards the leading chains.
With higher growth and greater access to capital for the best retailers, the net result is dramatically higher levels of M&amp;A in sectors like drugstores and even supermarkets.  


Japan Retail: Market Concentration Accelerates Through M&A and Organic Growth

<ul>
<li>With food inflation exceeding 8% in December, prices have become the focus for all supermarket retailing. </li>
<li>This is good news for those that are set up for price competition but it presents a serious challenge to the majority of chains.</li>
<li>The net result will be a widening gap in performance between the best and rest, with the former delivering both top line growth and rising margins.</li>
</ul>


With food inflation exceeding 8% in December, prices have become the focus for all supermarket retailing. 
This is good news for those that are set up for price competition but it presents a serious challenge to the majority of chains.
The net result will be a widening gap in performance between the best and rest, with the former delivering both top line growth and rising margins.


Japan's Supermarkets: The Coming Disruption

<ul>
<li>Shoppers are facing a further round of price increases this month, with leading companies raising prices on more than 4,000 items. </li>
<li>Price inflation on FMCG is now at its highest level since the 1980s and there is growing caution among shoppers: 85.3% feel burdened by price hikes according to a Nomura survey.</li>
<li>With incomes falling again, many households are now holding back on all but essential spending, seeking out bargains and avoiding supermarkets that are seen as too expensive.</li>
</ul>


Shoppers are facing a further round of price increases this month, with leading companies raising prices on more than 4,000 items. 
Price inflation on FMCG is now at its highest level since the 1980s and there is growing caution among shoppers: 85.3% feel burdened by price hikes according to a Nomura survey.
With incomes falling again, many households are now holding back on all but essential spending, seeking out bargains and avoiding supermarkets that are seen as too expensive.


More Price Increases Bring Further Challenges for Japan's Retailers

<ul>
<li>Inflation remains the biggest headwind but most retail formats will see growth in 2023 with e-commerce expected to become the largest channel in the next 18 months.</li>
<li>Supermarkets are ripe for consolidation as new competitors emerge from the discount sector and online while convenience stores will consolidate further in a saturated sector.</li>
<li>Department stores will rebound further but only the leading firms will survive in a contracting sector.</li>
</ul>


Inflation remains the biggest headwind but most retail formats will see growth in 2023 with e-commerce expected to become the largest channel in the next 18 months.
Supermarkets are ripe for consolidation as new competitors emerge from the discount sector and online while convenience stores will consolidate further in a saturated sector.
Department stores will rebound further but only the leading firms will survive in a contracting sector.


Japan

Arcs Co Ltd operates supermarket and discount store chain in the Hokkaido area.  The Company mainly retails foodstuffs, clothing, and sundry goods.

Price Gauge
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Arcs Co Ltd (9948 JP)

Albis (7475 JP): Life Corp (8194 JP)’s Tender Offer at JPY3,780

Despite the lack of an auction and being marginally below book value (P/B of 0.95x), the offer is attractive compared to historical trading ranges...

Arun George

Japan Retail: Market Concentration Accelerates Through M&A and Organic Growth

Market concentration in Japan's retail sector has been increasing due to the need for growth in a shrinking market, leading to a surge in M&A...

Michael Causton

Japan's Supermarkets: The Coming Disruption

With Trial's IPO looming and inflation at record highs, Japan's supermarket sector is a sector ripe for disruption as pricing pressures widen the...

Michael Causton

More Price Increases Bring Further Challenges for Japan's Retailers

Price increases on FMCG products are hitting consumer sentiment in Japan with wide ranging implications for retailers. The gap is widening and will...

Michael Causton

Outlook for Japanese Retail in 2023

Most Japanese retailers can look forward to a good year in 2023 but there will be challenges for formats like supermarkets where consolidation is...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Albis (7475 JP): Life Corp (8194 JP)’s Tender Offer at JPY3,780

Despite the lack of an auction and being marginally below book value (P/B of 0.95x), the offer is attractive compared to historical trading ranges...

Arun George

Japan Retail: Market Concentration Accelerates Through M&A and Organic Growth

​Market concentration in Japan's retail sector has been increasing due to the need for growth in a shrinking market, leading to a surge in M&A...

Michael Causton

Japan's Supermarkets: The Coming Disruption

With Trial's IPO looming and inflation at record highs, Japan's supermarket sector is a sector ripe for disruption as pricing pressures widen the...

Michael Causton

More Price Increases Bring Further Challenges for Japan's Retailers

Price increases on FMCG products are hitting consumer sentiment in Japan with wide ranging implications for retailers. The gap is widening and will...

Michael Causton

Outlook for Japanese Retail in 2023

Most Japanese retailers can look forward to a good year in 2023 but there will be challenges for formats like supermarkets where consolidation is...

Michael Causton

Market concentration in Japan's retail sector has been increasing due to the need for growth in a shrinking market, leading to a surge in M&A...