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>Consumer distribution has been transformed since 2020 through accelerated concentration of market share. While some has come about through organic growth, the real drivers have been M&amp;A and MBOs. </li>
<li>The result is a realignment of the retail leader board as companies like PPI, Welcia and Trial buy their way to the top, while others, notably Seven &amp; I, shrink.</li>
<li>Here we identify the retail leaders in driving consolidation going forward, and the intensifying pressure on both smaller retailers and the wholesalers that supply them.</li>
</ul>


Consumer distribution has been transformed since 2020 through accelerated concentration of market share. While some has come about through organic growth, the real drivers have been M&amp;A and MBOs. 
The result is a realignment of the retail leader board as companies like PPI, Welcia and Trial buy their way to the top, while others, notably Seven &amp; I, shrink.
Here we identify the retail leaders in driving consolidation going forward, and the intensifying pressure on both smaller retailers and the wholesalers that supply them.


[Japan M&A] Who Owns Who: The Growing Concentration of Power in Japanese Consumer Markets

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

<ul>
<li>Tailwinds are turning to headwinds for the Japanese Trading companies.</li>
<li>Risks rising in the short term due to JPY strength, weakening commodity prices and the upcoming US recession.</li>
<li>Massive outperformance over the last two years, most recently due to multiple expansion</li>
</ul>


Tailwinds are turning to headwinds for the Japanese Trading companies.
Risks rising in the short term due to JPY strength, weakening commodity prices and the upcoming US recession.
Massive outperformance over the last two years, most recently due to multiple expansion


Risks Ahead for Japanese Trading Companies. Marubeni, Mitsui, Sumitomo, Mitsubishi

Equity Bottom-Up

<ul>
<li>Sojitz is Japan’s strategic gateway to a non‑Chinese rare earth supply</li>
<li>Earnings base continues to move away from the resources business and its inherent volatility</li>
<li>The company's discount to its larger peers will narrow as the market appreciates the changes</li>
</ul>


Sojitz is Japan’s strategic gateway to a non‑Chinese rare earth supply
Earnings base continues to move away from the resources business and its inherent volatility
The company's discount to its larger peers will narrow as the market appreciates the changes


Sojitz (2768.T) — Japan’s Rare Earth Play

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/sun-frontier-fudousan-co-ltd" target="_blank" data-smartkarma-citation="entities:18205:1" rel="noopener">Sun Frontier Fudousan (8934 JP)</a> and <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> signed a capital alliance. As part of that, Itochu is buying up to 6.657mm shares in a partial tender.</li>
<li>It is also buying 5.5mm shares at a discount in a 3rd party placement. Advantage Partners will convert and tender some of its CB. Itochu will own 15-20+% post-deal.</li>
<li>This is Itochu getting into a new position. It's a new career being made. It is possibly a precursor to buying out the founder in a couple of years.</li>
</ul>


Today, Sun Frontier Fudousan (8934 JP) and Itochu Corp (8001 JP) signed a capital alliance. As part of that, Itochu is buying up to 6.657mm shares in a partial tender.
It is also buying 5.5mm shares at a discount in a 3rd party placement. Advantage Partners will convert and tender some of its CB. Itochu will own 15-20+% post-deal.
This is Itochu getting into a new position. It's a new career being made. It is possibly a precursor to buying out the founder in a couple of years.


[Japan Event] Itochu Partial Tender for 13+% of Sun Frontier Fudosan (8934). Tiny Premium. No Min.

<ul>
<li>ACT's bid for Seven &amp; I has been withdrawn and Seven will be better off long-term because of it – although we detail here how competitors are catching up fast.</li>
<li>Once York HD has been split off, the company can at last focus on its crucial local CVS operation: Japan makes up 25% of revenues but almost 50% of profits.</li>
<li>The potential is real and we are bullish on the long-term value but we would have been more bullish if the former CEO Ryuichi Isaka was still on board.</li>
</ul>


ACT's bid for Seven &amp; I has been withdrawn and Seven will be better off long-term because of it – although we detail here how competitors are catching up fast.
Once York HD has been split off, the company can at last focus on its crucial local CVS operation: Japan makes up 25% of revenues but almost 50% of profits.
The potential is real and we are bullish on the long-term value but we would have been more bullish if the former CEO Ryuichi Isaka was still on board.


The Final ACT Comedy of Errors Opens the Way for Real Value to Emerge at Seven & I

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.

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Itochu Corp (8001 JP)

[Japan M&A] Who Owns Who: The Growing Concentration of Power in Japanese Consumer Markets

Consumer distribution has shifted post-2020, with market concentration driven by M&A and MBOs. We identify the leaders of this consolidation,...

Michael Causton

Risks Ahead for Japanese Trading Companies. Marubeni, Mitsui, Sumitomo, Mitsubishi

The investment thesis is starting to work as the reasoning behind the trade is playing out as the Japanese Yen strengthens.

Rikki Malik

Sojitz (2768.T) — Japan’s Rare Earth Play

Lynas extended its agreement with Sojitz until 2038, agreeing to supply 75% of its heavy rare earths to Sojitz with a $110/kg NdPr price floor....

Rikki Malik

[Japan Event] Itochu Partial Tender for 13+% of Sun Frontier Fudosan (8934). Tiny Premium. No Min.

Itochu is buying into a new business. Real estate revitalisation and hotels. 3rd party placement for just under 10%. Partial tender for 13% but...

Travis Lundy

The Final ACT Comedy of Errors Opens the Way for Real Value to Emerge at Seven & I

ACT's bid for Seven & I withdrawn, company to focus on crucial CVS operation in Japan for long-term growth, potential vast but more bullish if...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Japan M&A] Who Owns Who: The Growing Concentration of Power in Japanese Consumer Markets

​Consumer distribution has shifted post-2020, with market concentration driven by M&A and MBOs. We identify the leaders of this consolidation,...

Michael Causton

Risks Ahead for Japanese Trading Companies. Marubeni, Mitsui, Sumitomo, Mitsubishi

The investment thesis is starting to work as the reasoning behind the trade is playing out as the Japanese Yen strengthens.

Rikki Malik

Sojitz (2768.T) — Japan’s Rare Earth Play

Lynas extended its agreement with Sojitz until 2038, agreeing to supply 75% of its heavy rare earths to Sojitz with a $110/kg NdPr price floor....

Rikki Malik

[Japan Event] Itochu Partial Tender for 13+% of Sun Frontier Fudosan (8934). Tiny Premium. No Min.

Itochu is buying into a new business. Real estate revitalisation and hotels. 3rd party placement for just under 10%. Partial tender for 13% but...

Travis Lundy

The Final ACT Comedy of Errors Opens the Way for Real Value to Emerge at Seven & I

​ACT's bid for Seven & I withdrawn, company to focus on crucial CVS operation in Japan for long-term growth, potential vast but more bullish if...

Michael Causton

Consumer distribution has shifted post-2020, with market concentration driven by M&A and MBOs. We identify the leaders of this consolidation,...

ACT's bid for Seven & I withdrawn, company to focus on crucial CVS operation in Japan for long-term growth, potential vast but more bullish if...