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.

Thematic (Sector/Industry)

<h3>What’s Original?</h3>
<p>In this original, we have discussed some of the key aspects highlighted in Kishida’s policy statements along with the current status of these policies and companies that are likely to benefit.</p>

What’s Original?
In this original, we have discussed some of the key aspects highlighted in Kishida’s policy statements along with the current status of these policies and companies that are likely to benefit.

Kishida as Prime Minister: The Path Ahead

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. 

<p>Contraction in apparel consumption aside, Japanese fashion retailers and brands have made dramatic strides to pull in customers online with e-commerce sales up 24% last year according to one survey, faster than the growth in e-commerce overall. Even some wholesalers are succeeding digitally. </p>
<p><strong>What the results show is a breakthrough shift to online with likely further growth this year, taking the online channel’s share above 25% and more than 30% for many of those firms with higher online ratios.</strong></p>

Contraction in apparel consumption aside, Japanese fashion retailers and brands have made dramatic strides to pull in customers online with e-commerce sales up 24% last year according to one survey, faster than the growth in e-commerce overall. Even some wholesalers are succeeding digitally. 
What the results show is a breakthrough shift to online with likely further growth this year, taking the online channel’s share above 25% and more than 30% for many of those firms with higher online ratios.

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<p>Among active Global managers, Japan Consumer Discretionary stocks are the 3rd largest country/sector holding in the Asia region.  Average fund weights sit behind Taiwan Tech and Japan Industrials at 1.07%, with 57.1% of the 380 funds in our analysis invested in the sector with combined AUM of $9.18bn.</p><p>Measured against other Asian country/sectors, changes in fund ownership have been positive and among the highest across all measures over the last 6-months.  Against a backdrop of plummeting exposure in China Consumer Discretionary stocks, average weights, funds invested, cash flows and the balance of buyers vs sellers were all positive for Japan Consumer Discretionary stocks.  </p><p>Infact, across most ownership metrics, Japan Consumer Discretionary stocks have overtaken, or at least closed to gap to China Consumer Discretionary stocks since the 'Tech Crackdown' in October of 2020.  We can see evidence of this rotation on a fund level, with Aberdeen's Global Unconstrained Fund, LBPAM's Actions Monde and BNY Mellon's Global Opportunities Fund examples of managers rotating from China Consumer Discretionary and into Japan since October 2020.</p><p><em>Analysis taken from our Global research, covering 380 active Global strategies with combined AUM of $1.1bn</em></p>

Among active Global managers, Japan Consumer Discretionary stocks are the 3rd largest country/sector holding in the Asia region.  Average fund weights sit behind Taiwan Tech and Japan Industrials at 1.07%, with 57.1% of the 380 funds in our analysis invested in the sector with combined AUM of $9.18bn.Measured against other Asian country/sectors, changes in fund ownership have been positive and among the highest across all measures over the last 6-months.  Against a backdrop of plummeting exposure in China Consumer Discretionary stocks, average weights, funds invested, cash flows and the balance of buyers vs sellers were all positive for Japan Consumer Discretionary stocks.  Infact, across most ownership metrics, Japan Consumer Discretionary stocks have overtaken, or at least closed to gap to China Consumer Discretionary stocks since the 'Tech Crackdown' in October of 2020.  We can see evidence of this rotation on a fund level, with Aberdeen's Global Unconstrained Fund, LBPAM's Actions Monde and BNY Mellon's Global Opportunities Fund examples of managers rotating from China Consumer Discretionary and into Japan since October 2020.Analysis taken from our Global research, covering 380 active Global strategies with combined AUM of $1.1bn

Japan Consumer Discretionary:  Benefiting from China's Downfall

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

Japan Post Holdings / Equity Capital Markets

<div><p>The Japanese government plans to sell over 26% or US$8bn worth of <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post Holdings (6178 JP).</a> We've covered most most aspects of the deal in our previous note, <a href="https://www.smartkarma.com/insights/japan-post-holdings-placement-the-final-us-8bn-countdown-past-deal-didn-t-do-well" target="_blank" rel="noopener">Japan Post Holdings Placement - The Final US$8bn Countdown - Past Deal Didn’t Do Well</a>. </p></div><div><p>In this note, we will talk about the updates and the share price performance so far.</p></div>

The Japanese government plans to sell over 26% or US$8bn worth of Japan Post Holdings (6178 JP). We've covered most most aspects of the deal in our previous note, Japan Post Holdings Placement - The Final US$8bn Countdown - Past Deal Didn’t Do Well. In this note, we will talk about the updates and the share price performance so far.

Japan Post Holdings Placement - The Final US$8bn Countdown - Shaping up Better than the Last Deal

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Equity Bottom-Up

<p>Japan’s largest apparel retailer, <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> delivered 4QFY21 results on 14<sup>th</sup> October 2021 with revenue falling behind the consensus estimate by ¥32.2bn (7%). Operating profit came ¥4.3bn above the consensus estimate of ¥16.9bn. The company’s FY22 revenue and operating profit guidance of ¥2,200bn (3.1% YoY) and ¥270bn (8.4% YoY) are not particularly impressive considering Fast Retailing’s business operations are yet to get back to the pre-COVID level.</p>

Japan’s largest apparel retailer, Fast Retailing (9983 JP) delivered 4QFY21 results on 14th October 2021 with revenue falling behind the consensus estimate by ¥32.2bn (7%). Operating profit came ¥4.3bn above the consensus estimate of ¥16.9bn. The company’s FY22 revenue and operating profit guidance of ¥2,200bn (3.1% YoY) and ¥270bn (8.4% YoY) are not particularly impressive considering Fast Retailing’s business operations are yet to get back to the pre-COVID level.

Fast Retailing: Additional 20% Downside Is Possible As Growth Breaks Down in Uniqlo International

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)

Kishida as Prime Minister: The Path Ahead

In this original, we have discussed some of the key aspects highlighted in Kishida’s policy statements along with the current status of these...

Mio Kato

Japan Online Fashion Sales Soar

Before, the boom in online was just a theory but the numbers now make it clear that Japanese consumers have shifted their spending habits,...

Michael Causton

Japan Consumer Discretionary: Benefiting from China's Downfall

Against a backdrop of plummeting exposure in China Consumer Discretionary stocks, active Global managers have pivoted towards the Japan Consumer...

Steven Holden

Japan Post Holdings Placement - The Final US$8bn Countdown - Shaping up Better than the Last Deal

The Japanese government plans to sell over 26% or US$8bn worth of Japan Post Holdings (6178 JP). In this note, we will talk about the updates and...

Sumeet Singh

Fast Retailing: Additional 20% Downside Is Possible As Growth Breaks Down in Uniqlo International

With Uniqlo International’s growth struggling to get going after the South Korea boycott, Hong Kong protests and COVID-19, we were expecting a...

Oshadhi Kumarasiri

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