Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Two and a half years ago, <a href="https://www.smartkarma.com/entities/h2o-retailing-corp" target="_blank" data-smartkarma-citation="entities:17562:1" rel="noopener">H2O Retailing (8242 JP)</a> the 10.9% owner, arranged to merge its own units into <a href="https://www.smartkarma.com/entities/kansai-super-market-ltd" target="_blank" data-smartkarma-citation="entities:15519:1" rel="noopener">Kansai Super Market (9919 JP)</a> to get control. OK Corp complained.</li>
<li>
OK Corp offered to double the price in a Tender Offer but wouldn't go hostile. KSM/KFM said no go. Shares popped to ¥2,000+ then when the deal failed, they fell. </li>
<li>
H₂O ended up with 58% (64.9% of votes now). The ultimate goal was to swallow it paying zero premium. On 15 May, it announced the merger to do just that. </li>
</ul>


Two and a half years ago, H2O Retailing (8242 JP) the 10.9% owner, arranged to merge its own units into Kansai Super Market (9919 JP) to get control. OK Corp complained.

OK Corp offered to double the price in a Tender Offer but wouldn't go hostile. KSM/KFM said no go. Shares popped to ¥2,000+ then when the deal failed, they fell. 

H₂O ended up with 58% (64.9% of votes now). The ultimate goal was to swallow it paying zero premium. On 15 May, it announced the merger to do just that. 


Kansai Food Market (9919) Minorities Get Squeezed into H2O Retailing (8242)

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>The following is an in-depth review of the Japanese retail sector in 2021-22 and is designed to provide a complete overview for any investor in Japanese retail/consumer markets.</li>
<li>FY2021-22 proved a rebound year for retailers at the sector level. But on a company by company basis, there has been radical divergence between the best and the rest. </li>
<li>We look at the reasons for this divergence and the implications for Japanese retail and consumer firms in the years ahead.</li>
</ul>


The following is an in-depth review of the Japanese retail sector in 2021-22 and is designed to provide a complete overview for any investor in Japanese retail/consumer markets.
FY2021-22 proved a rebound year for retailers at the sector level. But on a company by company basis, there has been radical divergence between the best and the rest. 
We look at the reasons for this divergence and the implications for Japanese retail and consumer firms in the years ahead.


Japanese Retailing 2021-22: What's Really Going on and What's Next?

<ul>
<li>Results for FY2022-23 provide a snapshot of winners and losers in Japan's retail sector.</li>
<li>The data shows a big improvement in performance for retailers with sales of ¥250 billion or more and the outlook is positive for most, particularly for profits.</li>
<li>This also means that market concentration is intensifying, particularly in sectors like drugstores but also now in supermarkets. We highlight the winners in each sector.</li>
</ul>


Results for FY2022-23 provide a snapshot of winners and losers in Japan's retail sector.
The data shows a big improvement in performance for retailers with sales of ¥250 billion or more and the outlook is positive for most, particularly for profits.
This also means that market concentration is intensifying, particularly in sectors like drugstores but also now in supermarkets. We highlight the winners in each sector.


Equity Bottom-Up

<ul>
<li>Deep discounter OK Super’s entry into the Kansai market is causing local competitors real headaches –one estimate says it has taken 10% share around its first store already. </li>
<li>OK has exposed just how derivative most existing chains have become and, with the introduction of genuine price competition at a time when consumers are increasingly price sensitive</li>
<li>While OK Super is a private company, some of the competitors are listed like Kansai Food Market who, without new ideas, will suffer in the next three years.</li>
</ul>


Deep discounter OK Super’s entry into the Kansai market is causing local competitors real headaches –one estimate says it has taken 10% share around its first store already. 
OK has exposed just how derivative most existing chains have become and, with the introduction of genuine price competition at a time when consumers are increasingly price sensitive
While OK Super is a private company, some of the competitors are listed like Kansai Food Market who, without new ideas, will suffer in the next three years.


OK Super: Disrupting Kansai Supermarket Sector

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>The food and beverage sector stands out for its aggressive dual approach—raising prices while driving internal efficiencies—which could position it for earnings outperformance if input cost inflation stabilizes.</li>
<li>Alcoholic beverage makers are facing near-term consumption risks post-price hikes. Yet they are pursuing structural cost improvements to safeguard margins.</li>
<li>Department store operators are balancing strong recent performance and structural transformation with near-term headwinds from remodeling and softer inbound trends.</li>
</ul>


The food and beverage sector stands out for its aggressive dual approach—raising prices while driving internal efficiencies—which could position it for earnings outperformance if input cost inflation stabilizes.
Alcoholic beverage makers are facing near-term consumption risks post-price hikes. Yet they are pursuing structural cost improvements to safeguard margins.
Department store operators are balancing strong recent performance and structural transformation with near-term headwinds from remodeling and softer inbound trends.


Japan Consumer Sector Update: Q4 FY2025 Wrap-Up and FY2026 Outlook

Japan

H2O RETAILING CORPORATION founded in Osaka in 1929, operates railway terminal department stores.  The Company's main store is located at Hankyu terminal in Umeda (Osaka) and sells clothing, foods, sundry goods, furniture, and household utensils.  H2O Retailing also operates restaurants and coffee shops.

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H2O Retailing (8242 JP)

Kansai Food Market (9919) Minorities Get Squeezed into H2O Retailing (8242)

Kansai Super Market (aka Kansai Food Market) was the vehicle for an RTO in late 2021 to the detriment of minorities. Now minorities are being...

Travis Lundy

Japanese Retailing 2021-22: What's Really Going on and What's Next?

There is increasing divergence between the winners and losers in Japanese retailing and the following in-depth review looks at performance in the...

Michael Causton

Japan's Best Performing Retailers

There were strong improvements in both sales and profits for leading retailers last year and the following insight looks at the main winners and...

Michael Causton

OK Super: Disrupting Kansai Supermarket Sector

OK Super's entry into the Kansai market is shaking up local competitors with its deep discounts, posing a threat to existing chains lacking...

Michael Causton

Japan Consumer Sector Update: Q4 FY2025 Wrap-Up and FY2026 Outlook

Food and beverage sector raising prices and driving efficiencies for potential earnings outperformance, while alcoholic beverage makers face...

Oshadhi Kumarasiri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Kansai Food Market (9919) Minorities Get Squeezed into H2O Retailing (8242)

Kansai Super Market (aka Kansai Food Market) was the vehicle for an RTO in late 2021 to the detriment of minorities. Now minorities are being...

Travis Lundy

Japanese Retailing 2021-22: What's Really Going on and What's Next?

There is increasing divergence between the winners and losers in Japanese retailing and the following in-depth review looks at performance in the...

Michael Causton

Japan's Best Performing Retailers

There were strong improvements in both sales and profits for leading retailers last year and the following insight looks at the main winners and...

Michael Causton

OK Super: Disrupting Kansai Supermarket Sector

​OK Super's entry into the Kansai market is shaking up local competitors with its deep discounts, posing a threat to existing chains lacking...

Michael Causton

Japan Consumer Sector Update: Q4 FY2025 Wrap-Up and FY2026 Outlook

​Food and beverage sector raising prices and driving efficiencies for potential earnings outperformance, while alcoholic beverage makers face...

Oshadhi Kumarasiri

OK Super's entry into the Kansai market is shaking up local competitors with its deep discounts, posing a threat to existing chains lacking...

Food and beverage sector raising prices and driving efficiencies for potential earnings outperformance, while alcoholic beverage makers face...