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>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.


<ul>
<li>OK Super opened its first store in Kansai in November with a second already due in January and at least one more by the end of 2025</li>
<li>But then it will open 10 stores a year in the region aiming to take the lead in Kansai just as it did in Tokyo/Kanto – bigger even than Aeon.</li>
<li>More than 300 people queued to get into the supermarket and OK’s EDLP strategy is certain to prove a hit with customers in the region. Competitors will be hit hard.</li>
</ul>


OK Super opened its first store in Kansai in November with a second already due in January and at least one more by the end of 2025
But then it will open 10 stores a year in the region aiming to take the lead in Kansai just as it did in Tokyo/Kanto – bigger even than Aeon.
More than 300 people queued to get into the supermarket and OK’s EDLP strategy is certain to prove a hit with customers in the region. Competitors will be hit hard.


OK Super Fast Rollout in Kansai a Threat to Kansai Super and Others

<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

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The flip-side of the <a href="https://www.smartkarma.com/insights/toho-takeout-of-rakutenchi-buying-a-real-estate-portfolio-at-a-50-premium-but-0-7x-nav" target="_blank" data-smartkarma-citation="insights:122135" rel="noopener">Toho Takeout of Rakutenchi - Buying a Real Estate Portfolio at a 50% Premium but 0.7x NAV.</a> is the Hankyu-Hanshin deal to buy OS Corp (9637).</li>
<li>Tokyo-Based Toho buys out Kansai-based Hankyu-Hanshin's stake in Tokyo-based Rakutenchi. HH buys out Toho's stake in Kobe-based OS Corp. This is a "TOB Swap". HH owns 21.7% of Toho too.</li>
<li>Like Rakutenchi, it is being done at a PBR higher than 1, but a decent discount to NAV. But this one is horribly, horribly illiquid (1,000 shs/day) </li>
</ul>


The flip-side of the Toho Takeout of Rakutenchi - Buying a Real Estate Portfolio at a 50% Premium but 0.7x NAV. is the Hankyu-Hanshin deal to buy OS Corp (9637).
Tokyo-Based Toho buys out Kansai-based Hankyu-Hanshin's stake in Tokyo-based Rakutenchi. HH buys out Toho's stake in Kobe-based OS Corp. This is a "TOB Swap". HH owns 21.7% of Toho too.
Like Rakutenchi, it is being done at a PBR higher than 1, but a decent discount to NAV. But this one is horribly, horribly illiquid (1,000 shs/day) 


<ul>
<li>Yesterday, <a href="https://www.smartkarma.com/entities/tokyo-rakutenchi-co-ltd" target="_blank" data-smartkarma-citation="entities:2078:1" rel="noopener">Tokyo Rakutenchi (8842 JP)</a>'s #1 shareholder <a href="https://www.smartkarma.com/entities/toho-co-ltd" target="_blank" data-smartkarma-citation="entities:7806:1" rel="noopener">Toho Co Ltd (9602 JP)</a> agreed to buy out the rest of Tokyo Rakutenchi from its #2 and #3 shareholders and minorities.</li>
<li>The Takeover Price is a 51% premium. Which is nice. But the asset is a real estate portfolio, and it was sold as a company, not a real estate portfolio.</li>
<li>The revaluation surplus to market value for the real estate assets is more than net equity, so Takeover PBR &gt;1.0, but Price/NAV of the takeover is 0.7x, without synergies included. </li>
</ul>


Yesterday, Tokyo Rakutenchi (8842 JP)'s #1 shareholder Toho Co Ltd (9602 JP) agreed to buy out the rest of Tokyo Rakutenchi from its #2 and #3 shareholders and minorities.
The Takeover Price is a 51% premium. Which is nice. But the asset is a real estate portfolio, and it was sold as a company, not a real estate portfolio.
The revaluation surplus to market value for the real estate assets is more than net equity, so Takeover PBR &gt;1.0, but Price/NAV of the takeover is 0.7x, without synergies included. 


Toho Takeout of Rakutenchi - Buying a Real Estate Portfolio at a 50% Premium but 0.7x NAV.

Japan

Hankyu Hanshin Holdings, Inc. is a passenger rail company serving the Kansai area.  The Company also provides passenger bus transportation and logistics services.  In addition, Hankyu Hanshin Holdings operates housing and urban development, athletic facilities, theaters, travel agents, hotels, and other leisure-related services.

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52-week Range	0.00 - 0.00
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Hankyu Hanshin Holdings (9042 JP)

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 Fast Rollout in Kansai a Threat to Kansai Super and Others

OK Super has just begun expanding in Kansai, with plans to open multiple stores each year, drawing in customers with its EDLP strategy. OK Super...

Michael Causton

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

Hankyu Hanshin Takeout of OS Corp

TOTALLY ILLIQUID DEAL ALERT - This is the lowest foreign ownership stock in Japan that I've ever seen. Smallcap Tender Offer. Illiquid. 59% corps,...

Travis Lundy

Toho Takeout of Rakutenchi - Buying a Real Estate Portfolio at a 50% Premium but 0.7x NAV.

Toho (9602) is taking out a real estate operations affiliate Tokyo Rakutenchi. It is doing so at 1.2x book but probably 0.7x NAV. And the Board...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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 Fast Rollout in Kansai a Threat to Kansai Super and Others

​OK Super has just begun expanding in Kansai, with plans to open multiple stores each year, drawing in customers with its EDLP strategy. OK Super...

Michael Causton

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

Hankyu Hanshin Takeout of OS Corp

TOTALLY ILLIQUID DEAL ALERT - This is the lowest foreign ownership stock in Japan that I've ever seen. Smallcap Tender Offer. Illiquid. 59% corps,...

Travis Lundy

Toho Takeout of Rakutenchi - Buying a Real Estate Portfolio at a 50% Premium but 0.7x NAV.

Toho (9602) is taking out a real estate operations affiliate Tokyo Rakutenchi. It is doing so at 1.2x book but probably 0.7x NAV. And the Board...

Travis Lundy

OK Super has just begun expanding in Kansai, with plans to open multiple stores each year, drawing in customers with its EDLP strategy. OK Super...

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...