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)

<p>Japan may be one of the top three luxury markets in the world but luxury e-commerce is poorly evolved, with much of the focus still on flagships, boutiques and department stores.</p><p>While Rakuten opened its own luxury section last month, a new dedicated luxury platform, Milleporte, which is backed by Goldman Sachs and Itochu Corp, has just launched with the promise to offer both merchants and customers a true luxury experience.</p><p>In marked contrast to the busier online fashion pages of <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a> and <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a>’s new luxury store, where the focus remains on the platform-as-brand at the expense of the merchant, Milleporte strips away the store front to allow customers to focus on the luxury brands themselves.</p><p>The site is a direct challenge to both Zozo and Rakuten.</p>

Japan may be one of the top three luxury markets in the world but luxury e-commerce is poorly evolved, with much of the focus still on flagships, boutiques and department stores.While Rakuten opened its own luxury section last month, a new dedicated luxury platform, Milleporte, which is backed by Goldman Sachs and Itochu Corp, has just launched with the promise to offer both merchants and customers a true luxury experience.In marked contrast to the busier online fashion pages of ZOZO Inc (3092 JP) and Rakuten Inc (4755 JP)’s new luxury store, where the focus remains on the platform-as-brand at the expense of the merchant, Milleporte strips away the store front to allow customers to focus on the luxury brands themselves.The site is a direct challenge to both Zozo and Rakuten.

Milleporte Counters Rakuten and Zozo on Luxury Platform

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.

<p><a href="https://asia.nikkei.com/Business/Energy/Japan-taps-Australia-and-Brunei-for-hydrogen-import-goal" target="_blank" rel="noopener">Momentum is building within East Asia to propel the Hydrogen economy forward</a> as Japan, Korea and China have demonstrated interest in investing heavily in the technology, a call that is being answered by a variety of players through the supply chain. We examine below the key investment opportunities and timelines for these players.</p>

Momentum is building within East Asia to propel the Hydrogen economy forward as Japan, Korea and China have demonstrated interest in investing heavily in the technology, a call that is being answered by a variety of players through the supply chain. We examine below the key investment opportunities and timelines for these players.

Equity Bottom-Up

<ul>
<li>Jade Group has struggled to expand through organic growth based on its core Locondo online mall.</li>
<li>Instead, it is turning itself into an M&amp;A-driven business across both fashion distribution as well as e-commerce.</li>
<li>Is it just buying more volume or quality assets too?</li>
</ul>


Jade Group has struggled to expand through organic growth based on its core Locondo online mall.
Instead, it is turning itself into an M&amp;A-driven business across both fashion distribution as well as e-commerce.
Is it just buying more volume or quality assets too?


'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/693/original/2020-09-14_09-50-37.png?1600044664" class="editor-image img-responsive" data-smartkarma-image-id="158693"></figure><div class="content-caption">Source for all charts &amp; tables except as stated: Japan Analytics</div><p><strong>EQUITY-DRIVEN</strong> - Japan's aggregate Shareholders' Equity has appreciated by 45% since 2014 - an annual rate of 5.5% and has been one of the key achievements of the 'Abe era'. For the five years before 2012, Shareholders Equity was unchanged, buffeted by the 2008/9 financial crisis and the 3/11.  Although the equity market has responded well to the change in reserves, Japan's PBR has remained within a range of 1.05 to 1.38 over the last decade and is unchanged compared to 2010. In prior post-bubble 'lost' decades, the average PBR was 1.8 times. In other markets, the rise of intangible assets has called the use of Book/Price as a metric and the S&amp;P 500 PBR is now almost three times that of the Japan aggregate having bottomed at 1.78 in March 2009.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/694/original/File%202020-09-14%2010%2007%2037.jpeg?1600045681" class="editor-image img-responsive" data-smartkarma-image-id="158694"></figure><div class="content-caption">Source: multpl.com</div><p><strong>BOOK VALUE PER SHARE </strong>- In this Insight, we shall look at Japan's larger-cap companies (current market value &gt;¥100 billion) through the 'lens' of book value per share. Our focus will be less on the 'winners' and 'losers' than on those companies that have seen the least change in 'BVPS' over the last seven years. Our share count excludes treasury shares which is to the benefit of companies such as <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (9432 JP)</a> which has seen a 20% reduction in Net Shares Outstanding, but only a 9% increase in Shareholders' Equity. A BVPS growth metric does, however, flatter serial issuers of equity with declining share prices, such as <a href="https://www.smartkarma.com/entities/sosei-group-corp" target="_blank" data-smartkarma-citation="entities:770:1" rel="noopener">Sosei (4565 JP)</a>.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/696/original/2020-09-14_10-26-48.png?1600046818" class="editor-image img-responsive" data-smartkarma-image-id="158696"></figure><p><strong>WINNERS</strong> - As many may ask and for the record, our 'winning' thirty companies contains many of Japan's best-performing businesses and 'priciest 'stocks, such as <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" data-smartkarma-citation="entities:15441:1" rel="noopener">Monotaro (3064 JP)</a>, <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 (2413 JP)</a>, <a href="https://www.smartkarma.com/entities/gmo-payment-gateway-inc" target="_blank" data-smartkarma-citation="entities:1492:1" rel="noopener">GMO Payment Gateway (3769 JP)</a>, and <a href="https://www.smartkarma.com/entities/kobe-bussan-co-ltd" target="_blank" data-smartkarma-citation="entities:4701:1" rel="noopener">Kobe Bussan (3038 JP)</a>. Some of the more surprising entries are <a href="https://www.smartkarma.com/entities/mixi-inc" target="_blank" data-smartkarma-citation="entities:602:1" rel="noopener">mixi (2121 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyo-electric-power-co-inc" target="_blank" data-smartkarma-citation="entities:15457:1" rel="noopener">Tokyo Electric Power (9501 JP)</a>.  As an equally-weighted portfolio, this group has outperformed by 30% over one year and by 11% over the last three months.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/697/original/2020-09-14_10-33-13.png?1600047204" class="editor-image img-responsive" data-smartkarma-image-id="158697"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/698/original/2020-09-14_10-33-41.png?1600047231" class="editor-image img-responsive" data-smartkarma-image-id="158698"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/701/original/2020-09-14_10-47-56.png?1600048087" class="editor-image img-responsive" data-smartkarma-image-id="158701"></figure><p><strong>LOSERS</strong> - Our list of losers, who have collectively underperformed by 9% over one year, have many of Japan's weaker business models (shipping, oil &amp; gas, paper, copiers, gaming machines. The list also features some of the less-astute management 'teams' (<a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan (7201 JP)</a>, <a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin (2503 JP)</a>, <a href="https://www.smartkarma.com/entities/lixil-group-corp" target="_blank" data-smartkarma-citation="entities:454:1" rel="noopener">Lixil (5938 JP)</a>, and <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon (8267 JP)</a>).  Also among the latter are two medical-related business - the now remained <a href="https://www.smartkarma.com/entities/h-u-group-holdings-inc" target="_blank" data-smartkarma-citation="entities:16580:1" rel="noopener">H.U. Group (4544 JP)</a> (formerly Miraca) and recent Bain PE target <a href="https://www.smartkarma.com/entities/nichii-gakkan-co" target="_blank" data-smartkarma-citation="entities:6790:1" rel="noopener">Nichii Gakkan (9792 JP)</a>.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/706/original/2020-09-14_10-57-45.png?1600048692" class="editor-image img-responsive" data-smartkarma-image-id="158706"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/707/original/2020-09-14_10-59-22.png?1600048774" class="editor-image img-responsive" data-smartkarma-image-id="158707"></figure><p>In the <strong>DETAIL</strong> section below, we all review the large companies that have seen the least change in BVPS over the last seven years and those with the lowest BVPS volatility over the same period. Our lists contain quite a few surprises.</p>

Source for all charts &amp; tables except as stated: Japan AnalyticsEQUITY-DRIVEN - Japan's aggregate Shareholders' Equity has appreciated by 45% since 2014 - an annual rate of 5.5% and has been one of the key achievements of the 'Abe era'. For the five years before 2012, Shareholders Equity was unchanged, buffeted by the 2008/9 financial crisis and the 3/11.  Although the equity market has responded well to the change in reserves, Japan's PBR has remained within a range of 1.05 to 1.38 over the last decade and is unchanged compared to 2010. In prior post-bubble 'lost' decades, the average PBR was 1.8 times. In other markets, the rise of intangible assets has called the use of Book/Price as a metric and the S&amp;P 500 PBR is now almost three times that of the Japan aggregate having bottomed at 1.78 in March 2009.Source: multpl.comBOOK VALUE PER SHARE - In this Insight, we shall look at Japan's larger-cap companies (current market value &gt;¥100 billion) through the 'lens' of book value per share. Our focus will be less on the 'winners' and 'losers' than on those companies that have seen the least change in 'BVPS' over the last seven years. Our share count excludes treasury shares which is to the benefit of companies such as NTT (9432 JP) which has seen a 20% reduction in Net Shares Outstanding, but only a 9% increase in Shareholders' Equity. A BVPS growth metric does, however, flatter serial issuers of equity with declining share prices, such as Sosei (4565 JP).WINNERS - As many may ask and for the record, our 'winning' thirty companies contains many of Japan's best-performing businesses and 'priciest 'stocks, such as Monotaro (3064 JP), M3 (2413 JP), GMO Payment Gateway (3769 JP), and Kobe Bussan (3038 JP). Some of the more surprising entries are mixi (2121 JP) and Tokyo Electric Power (9501 JP).  As an equally-weighted portfolio, this group has outperformed by 30% over one year and by 11% over the last three months.LOSERS - Our list of losers, who have collectively underperformed by 9% over one year, have many of Japan's weaker business models (shipping, oil &amp; gas, paper, copiers, gaming machines. The list also features some of the less-astute management 'teams' (Toshiba (6502 JP), Nissan (7201 JP), Kirin (2503 JP), Lixil (5938 JP), and Aeon (8267 JP)).  Also among the latter are two medical-related business - the now remained H.U. Group (4544 JP) (formerly Miraca) and recent Bain PE target Nichii Gakkan (9792 JP).In the DETAIL section below, we all review the large companies that have seen the least change in BVPS over the last seven years and those with the lowest BVPS volatility over the same period. Our lists contain quite a few surprises.

🇯🇵 Japan • Every Shareholder Left Behind - The Book Value Per Share Metric

<p style="text-align: center;"><strong>•BEST &amp; WORST 13th AUGUST •</strong></p><p>The 'best' of yesterday's large-cap announcements came from <a href="https://www.smartkarma.com/entities/rakus-co-ltd" target="_blank" data-smartkarma-citation="entities:29200:1" rel="noopener">Rakus (3923 JP)</a>, the 'worst' from <a href="https://www.smartkarma.com/entities/asics-corp" target="_blank" data-smartkarma-citation="entities:16287:1" rel="noopener">ASICS Corp (7936 JP)</a>.  More extensive coverage follows in the<strong> DETAIL</strong> section below.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/152/408/original/2020-08-14_05-05-16.png?1597349134" class="editor-image img-responsive" data-smartkarma-image-id="152408"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/152/409/original/2020-08-14_05-05-59.png?1597349190" class="editor-image img-responsive" data-smartkarma-image-id="152409"></figure><div class="content-caption">Source • Japan Analytics</div><hr><div><p style="text-align: center;"><strong>DAILY STATS</strong></p></div><hr><div><p><strong>PERCENTAGES</strong> - <strong>58%</strong> of quarterly results, <strong>48%</strong> of annual forecasts/revisions and <strong>61%</strong> of interim forecasts have negative Scores and <strong>30%</strong> of companies reporting lost money for the quarter.</p></div><hr><div><p style="text-align: center;"><strong>170 Quarterly Results</strong></p></div><div><ul>
<li>
<strong>Results Score:</strong> 29% Positive / 12% Neutral / 58% Negative</li>
<li>
<strong>Average Results Score Change: -</strong>2.7 points</li>
<li>
<strong>Average % Change in Revenue:</strong> -10.8% Quarter YoY / +5.0% Rolling TTM YoY </li>
<li>
<strong>Average Operating Profit Margin Change:</strong> -1.3 ppt</li>
<li>
<strong>Percentage Making Quarterly Losses:</strong> 30%</li>
</ul></div><hr><div><p style="text-align: center;"><strong>56 Annual • 23 Interim Forecasts/Revisions</strong></p></div><div><ul>
<li>Annual Forecast/Revision Score: 38% Positive / 14% Neutral / 48% Negative</li>
<li>Interim Forecast/Revision Score Change: 26% Positive / 13% Neutral / 61% Negative</li>
<li>Average Forecast/Revision Score Change: -2.2 points</li>
</ul></div>

•BEST &amp; WORST 13th AUGUST •The 'best' of yesterday's large-cap announcements came from Rakus (3923 JP), the 'worst' from ASICS Corp (7936 JP).  More extensive coverage follows in the DETAIL section below.Source • Japan AnalyticsDAILY STATSPERCENTAGES - 58% of quarterly results, 48% of annual forecasts/revisions and 61% of interim forecasts have negative Scores and 30% of companies reporting lost money for the quarter.170 Quarterly Results

Results Score: 29% Positive / 12% Neutral / 58% Negative

Average Results Score Change: -2.7 points

Average % Change in Revenue: -10.8% Quarter YoY / +5.0% Rolling TTM YoY 

Average Operating Profit Margin Change: -1.3 ppt

Percentage Making Quarterly Losses: 30%
56 Annual • 23 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 38% Positive / 14% Neutral / 48% Negative
Interim Forecast/Revision Score Change: 26% Positive / 13% Neutral / 61% Negative
Average Forecast/Revision Score Change: -2.2 points


🇯🇵 JAPAN • Results & Revisions 13th August - Asics, FUJIFILM, Dentsu, Mitsubishi Shoji

Japan

ITOCHU Corporation is a general trading firm handling textiles, wood, machinery, metals, food, chemicals, construction materials, commodities, and energy related products such as oil and gas. The Company operates around the world. Itochu diversifies by operating in satellite communication and data communication businesses.

Price Gauge
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Itochu Corp (8001 JP)

Milleporte Counters Rakuten and Zozo on Luxury Platform

Japan is the 3rd biggest luxury market but has no dedicated luxury online platform. Until now. Rakuten launched last month a new mall just launched...

Michael Causton

Asia’s Hydrogen Economy

China's increasing favour towards hydrogen is starting to generate investor interest in potential hydrogen economy and FCV plays. We examine...

Mio Kato

Jade Plans ¥10bn M&A a Year

Jade Group shifts focus from organic growth to M&A strategy in fashion distribution and e-commerce, raising questions about asset quality.

Michael Causton

🇯🇵 JAPAN • Results & Revisions 13th August - Asics, FUJIFILM, Dentsu, Mitsubishi Shoji

•BEST & WORST 13th AUGUST •The 'best' of yesterday's large-cap announcements came from Rakus (3923 JP), the 'worst' from ASICS Corp (7936 JP). ...

Campbell Gunn

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52-week Range

Market Cap (USDm)

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Milleporte Counters Rakuten and Zozo on Luxury Platform

Japan is the 3rd biggest luxury market but has no dedicated luxury online platform. Until now. Rakuten launched last month a new mall just launched...

Michael Causton

Asia’s Hydrogen Economy

China's increasing favour towards hydrogen is starting to generate investor interest in potential hydrogen economy and FCV plays. We examine...

Mio Kato

Jade Plans ¥10bn M&A a Year

​Jade Group shifts focus from organic growth to M&A strategy in fashion distribution and e-commerce, raising questions about asset quality.

Michael Causton

🇯🇵 Japan • Every Shareholder Left Behind - The Book Value Per Share Metric

EQUITY-DRIVEN - Japans

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 13th August - Asics, FUJIFILM, Dentsu, Mitsubishi Shoji

•BEST & WORST 13th AUGUST •The 'best' of yesterday's large-cap announcements came from Rakus (3923 JP), the 'worst' from ASICS Corp (7936 JP). ...

Campbell Gunn

Jade Group shifts focus from organic growth to M&A strategy in fashion distribution and e-commerce, raising questions about asset quality.