Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/askul-corp" target="_blank" data-smartkarma-citation="entities:16807:1" rel="noopener">Askul Corp (2678 JP)</a> posted the best revenue growth in six quarters as both B2B and consumer product sales accelerated</li>
<li>The corresponding operating income decline of 10% is less welcome but that includes a front-loading of planned growth investments and full year guidance of 1% growth is unchanged</li>
<li>We are tagging this insight as bearish as headlines of a 10% OP decline might not be as well received as the top-line story </li>
</ul>



Askul Corp (2678 JP) posted the best revenue growth in six quarters as both B2B and consumer product sales accelerated
The corresponding operating income decline of 10% is less welcome but that includes a front-loading of planned growth investments and full year guidance of 1% growth is unchanged
We are tagging this insight as bearish as headlines of a 10% OP decline might not be as well received as the top-line story 


Askul Q1 23 Results Reaction: Solid Revenue but OP Down on Front-Loaded Investments

<ul>
<li>Askul posted Q4 results that were largely in-line and issued FY23 targets that are robust for revenue growth (+6%) but accompanied by upfront investment</li>
<li>Management also announced it would prepare subsidiary AlphaPurchase for a public listing although the timing has not been determined</li>
<li>The miss on profitability guidance is not ideal but the acceleration of top-line growth is attractive</li>
</ul>


Askul posted Q4 results that were largely in-line and issued FY23 targets that are robust for revenue growth (+6%) but accompanied by upfront investment
Management also announced it would prepare subsidiary AlphaPurchase for a public listing although the timing has not been determined
The miss on profitability guidance is not ideal but the acceleration of top-line growth is attractive


Askul Corp - Q4 22 Results Reaction: Mixed as Growth Looks Appealing but Profits Light

<ul>
<li>Q3 22 results were in-line/ahead of consensus expectations but shares fell 7% today anyway</li>
<li>Operating profit fell 10% as improvements in operating losses for new businesses like Lohaco and logistics were not enough to make up for higher spending in the core B2B segment</li>
<li>Despite the decline, Askul shares have largely outperformed peers YTD on optimism over the planned launch of quick commerce business Yahoo!Mart announced in late January</li>
</ul>


Q3 22 results were in-line/ahead of consensus expectations but shares fell 7% today anyway
Operating profit fell 10% as improvements in operating losses for new businesses like Lohaco and logistics were not enough to make up for higher spending in the core B2B segment
Despite the decline, Askul shares have largely outperformed peers YTD on optimism over the planned launch of quick commerce business Yahoo!Mart announced in late January


Askul Corp - Q3 22 Results Reaction: Margin Concerns Hold Back Shares Despite Beat

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/askul-corp" target="_blank" data-smartkarma-citation="entities:16807:1" rel="noopener">Askul Corp (2678 JP)</a> today announced a 4.9% buyback, likely via ToSTNeT-3, designed to lower the holding of parent <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>, to meet TSE Prime Tradable Share criteria.</li>
<li>While 5.1% earnings accretive, it will not be enough, and the structure suggests despite significant excess cash, the next tranche won't come immediately.</li>
<li>There is short-term strategy, and there is longer-term positioning. Both may work in this case.</li>
</ul>



Askul Corp (2678 JP) today announced a 4.9% buyback, likely via ToSTNeT-3, designed to lower the holding of parent Z Holdings (4689 JP), to meet TSE Prime Tradable Share criteria.
While 5.1% earnings accretive, it will not be enough, and the structure suggests despite significant excess cash, the next tranche won't come immediately.
There is short-term strategy, and there is longer-term positioning. Both may work in this case.


ASKUL (2678) - Large, Accretive, Not Enough for Prime So Look For More

<ul>
<li>The January 2022 FFW rebalance is not very large - about US$225mm a side. </li>
<li>30% of the interest is in two names - <a href="https://www.smartkarma.com/entities/net-protections-holdings-inc" target="_blank" data-smartkarma-citation="entities:35162:1" rel="noopener">Net Protections (7383 JP)</a> as an add because of its recent IPO and <a href="https://www.smartkarma.com/entities/oracle-corp-japan" target="_blank" data-smartkarma-citation="entities:16787:1" rel="noopener">Oracle Corp Japan (4716 JP)</a> as a sell.</li>
<li>This event may get overshadowed by the TSE Market Structure revamp announced the same day.</li>
</ul>


The January 2022 FFW rebalance is not very large - about US$225mm a side. 
30% of the interest is in two names - Net Protections (7383 JP) as an add because of its recent IPO and Oracle Corp Japan (4716 JP) as a sell.
This event may get overshadowed by the TSE Market Structure revamp announced the same day.


TOPIX January 2022 FFW Rebalance - Much Nothing To Do

Japan

ASKUL Corporation sells office equipment products to medium and small sized business offices via the Internet and facsimiles.  The Company provides next day delivery services throughout Japan.

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Askul Corp (2678 JP)

Askul Q1 23 Results Reaction: Solid Revenue but OP Down on Front-Loaded Investments

Askul posted the best revenue growth in six quarters but one-time growth investments drove corresponding OP down 10%. The good news is the rest of...

Kirk Boodry

Askul Corp - Q4 22 Results Reaction: Mixed as Growth Looks Appealing but Profits Light

Askul is forecasting 6% top-line growth for the coming year, in line with mid-term plans, but like parent Z Holdings, investment to drive its FY25...

Kirk Boodry

Askul Corp - Q3 22 Results Reaction: Margin Concerns Hold Back Shares Despite Beat

Q3 22 results were largely as expected but concerns on near-term margins after a 22% decline in core B2B segment operating income may be weighing...

Kirk Boodry

ASKUL (2678) - Large, Accretive, Not Enough for Prime So Look For More

ASKUL announced a large buyback today, designed to lower parent Z Holdings ownership to be able to meet the TSE Prime Tradable Share Ratio...

Travis Lundy

TOPIX January 2022 FFW Rebalance - Much Nothing To Do

The TSE FFW review for Jan 2022 sees 60 names with changes. Gree's share cancellation would have been big but the TSE offset it with a FFW change....

Travis Lundy

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