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. 

Equity Bottom-Up

<ul>
<li>Ryohin Keikaku's biggest weakness is its unwieldy and expensive supply chains, with hundreds of suppliers across its three main categories of household, apparel and food.</li>
<li>The Muji operator just acquired a large team from one of its principle clothing supply partners, Mitsubishi, to finally streamline its supply chains and improve cost performance in clothing. </li>
<li>This should have a positive impact on its cost of goods, margins and inventory levels, allowing for quicker responses to trends at a lower price at home and overseas.</li>
</ul>


Ryohin Keikaku's biggest weakness is its unwieldy and expensive supply chains, with hundreds of suppliers across its three main categories of household, apparel and food.
The Muji operator just acquired a large team from one of its principle clothing supply partners, Mitsubishi, to finally streamline its supply chains and improve cost performance in clothing. 
This should have a positive impact on its cost of goods, margins and inventory levels, allowing for quicker responses to trends at a lower price at home and overseas.


Ryohin Keikaku: Finally Fixing Its Biggest Weakness?

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation. For companies with "low liquidity" the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation. This affects both TSE-1 incumbents and new entrants (depending on the date of entry). Every April, the application of this liquidity factor is reviewed by the TSE for all TSE1 constituents. Last April, 71 constituents saw their liquidity factors removed causing an increase in their respective FFWs used for index calculation resulting in a TOPIX upweight.This situation opens up interesting opportunities for a basket trade. Below is a discussion regarding the key details of TSE's FFW Calculation Methodology and the candidate stocks which could potentially experience a change in the application of the liquidity factor (including some surprisingly big names).

The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation. For companies with "low liquidity" the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation. This affects both TSE-1 incumbents and new entrants (depending on the date of entry). Every April, the application of this liquidity factor is reviewed by the TSE for all TSE1 constituents. Last April, 71 constituents saw their liquidity factors removed causing an increase in their respective FFWs used for index calculation resulting in a TOPIX upweight.This situation opens up interesting opportunities for a basket trade. Below is a discussion regarding the key details of TSE's FFW Calculation Methodology and the candidate stocks which could potentially experience a change in the application of the liquidity factor (including some surprisingly big names).   

TOPIX Index Upweights: The Big April Basket 2021

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Index Rebalance

<ul>
<li>The Nikkei 225 Rebal for The Next Rebal is, by the nature of its algorithm, basically 93.3% decided for the DELETEs when the previous rebal is announced. </li>
<li>The decision on the ADDs is somewhere between 60-80% complete at that time, dependent on future frothy volume of "young" stocks.  </li>
<li>The parameters of the new Info &amp; Comms classification labels have been applied to a number of Nikkei indices. Still 3 IN, 3 OUT for March 2027.</li>
</ul>


The Nikkei 225 Rebal for The Next Rebal is, by the nature of its algorithm, basically 93.3% decided for the DELETEs when the previous rebal is announced. 
The decision on the ADDs is somewhere between 60-80% complete at that time, dependent on future frothy volume of "young" stocks.  
The parameters of the new Info &amp; Comms classification labels have been applied to a number of Nikkei indices. Still 3 IN, 3 OUT for March 2027.


[Quiddity Index] Nikkei 225 Mar27 Rebal; 3 Tech DELETEs, 2 Info & Comms ADDs, One Consumer Goods

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

INFRONEER Holdings  / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/infroneer-holdings-inc" target="_blank" data-smartkarma-citation="entities:35785:1" rel="noopener">INFRONEER Holdings (5076 JP)</a>  aims to raise around US$800m to fund the acquisition of Swing Corporation.</li>
<li>The acquisition was announced earlier this year, with the company revising its earnings guidance a few months ago. The stock has corrected significantly since the deal was announced.</li>
<li>We had a look at the deal background in our previous note. In this note, we talk about the updates and past large deals performance.</li>
</ul>



INFRONEER Holdings (5076 JP)  aims to raise around US$800m to fund the acquisition of Swing Corporation.
The acquisition was announced earlier this year, with the company revising its earnings guidance a few months ago. The stock has corrected significantly since the deal was announced.
We had a look at the deal background in our previous note. In this note, we talk about the updates and past large deals performance.


Aequitas:Infroneer Holding Placement Updates- Correction Done, past Large Primary Deals Have Done Ok

Japan Specialist

Mark Chadwick

<ul>
<li>Expecting Beat: We forecast Q3 revenue of ¥1,007bn, +6% above consensus, driven by accelerating Uniqlo Japan sales and strong International performance.</li>
<li>Margin Outlook: We model 18.3% EBIT margin, broadly in line with consensus, as SG&amp;A efficiencies and International OPM gains offset yen-driven gross margin pressure.</li>
<li>Watch List: Monitor China recovery, US/EU store productivity, and FY guidance commentary — we see upside risk to consensus OP of ¥705bn.</li>
</ul>


Expecting Beat: We forecast Q3 revenue of ¥1,007bn, +6% above consensus, driven by accelerating Uniqlo Japan sales and strong International performance.
Margin Outlook: We model 18.3% EBIT margin, broadly in line with consensus, as SG&amp;A efficiencies and International OPM gains offset yen-driven gross margin pressure.
Watch List: Monitor China recovery, US/EU store productivity, and FY guidance commentary — we see upside risk to consensus OP of ¥705bn.


Fast Retailing (9983) | Strong Execution Expected

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)

Ryohin Keikaku: Finally Fixing Its Biggest Weakness?

Muji operator Ryohin Keikaku looks set to improve its supply chains and cost performance in clothing by acquiring a team from Mitsubishi, leading...

Michael Causton

TOPIX Index Upweights: The Big April Basket 2021

TOPIX does an annual exercise to adjust Liquidity Factor. The time for trades around that is upon us. This insight looks at the best trade around...

Janaghan Jeyakumar, CFA

[Quiddity Index] Nikkei 225 Mar27 Rebal; 3 Tech DELETEs, 2 Info & Comms ADDs, One Consumer Goods

After the updates to the Nikkei 225, Nikkei 500, and JPX Nikkei 400 classifications, we have a better idea of what is "Info & Comms" and what...

Travis Lundy

Aequitas:Infroneer Holding Placement Updates- Correction Done, past Large Primary Deals Have Done Ok

INFRONEER Holdings (5076 JP) aims to raise around US$800m to fund the acquisition of Swing Corporation. In this note, we look at the deal updates.

Sumeet Singh

Fast Retailing (9983) | Strong Execution Expected

Q3 revenue forecast for Uniqlo Japan and strong International performance drive expected growth, with margin outlook in line with consensus and...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Ryohin Keikaku: Finally Fixing Its Biggest Weakness?

​Muji operator Ryohin Keikaku looks set to improve its supply chains and cost performance in clothing by acquiring a team from Mitsubishi, leading...

Michael Causton

TOPIX Index Upweights: The Big April Basket 2021

TOPIX does an annual exercise to adjust Liquidity Factor. The time for trades around that is upon us. This insight looks at the best trade around...

Janaghan Jeyakumar, CFA

[Quiddity Index] Nikkei 225 Mar27 Rebal; 3 Tech DELETEs, 2 Info & Comms ADDs, One Consumer Goods

After the updates to the Nikkei 225, Nikkei 500, and JPX Nikkei 400 classifications, we have a better idea of what is "Info & Comms" and what...

Travis Lundy

Aequitas:Infroneer Holding Placement Updates- Correction Done, past Large Primary Deals Have Done Ok

INFRONEER Holdings (5076 JP) aims to raise around US$800m to fund the acquisition of Swing Corporation. In this note, we look at the deal updates.

Sumeet Singh

Fast Retailing (9983) | Strong Execution Expected

​Q3 revenue forecast for Uniqlo Japan and strong International performance drive expected growth, with margin outlook in line with consensus and...

Mark Chadwick

Muji operator Ryohin Keikaku looks set to improve its supply chains and cost performance in clothing by acquiring a team from Mitsubishi, leading...

Q3 revenue forecast for Uniqlo Japan and strong International performance drive expected growth, with margin outlook in line with consensus and...