'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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)

<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/145/396/original/2020-07-11_10-05-20.png?1594454466" class="editor-image img-responsive" data-smartkarma-image-id="145396"></figure><div class="content-caption"> Source • Japan Analytics</div>
<p><strong>SMALL CHANGE</strong> - With over half of the companies with February, May, August and November year-ends having reported, the gap between the performance of larger and smaller capitalisation companies is widening again - as was the case prior to the March COVID 'crash'. The former are benefiting from a relatively more robust earnings momentum and the willingness of shareholders to look through to 2022. For the latter, their mostly-retail investor base is focused more on the prolongation of current operating losses despite, in many cases, ample Net Financial Assets.  42% of companies reporting on Friday had net losses for the last three months on an average decline in revenues of 14%. For the next reporting 'cohort' with one less 'normal' month, these statistics will be worse.</p>
<p style="text-align: center;"><strong>DAILY STATS</strong></p>
</div><hr><div><p style="text-align: center;"><strong>83 Quarterly Results</strong></p></div><div><ul>
<li>
<strong>Results Score:</strong> 19 Positive / 3 Neutral / 61 Negative</li>
<li>
<strong>Average Results Score Change:</strong> -4.4</li>
<li>
<strong>Average % Change in Revenue:</strong> -14.2% Quarter YoY / -0.9% Rolling TTM YoY</li>
<li>
<strong>Average Operating Profit Margin Change:</strong> -0.7ppt</li>
<li>
<strong>Percentage Making Quarterly Losses:</strong> 42%</li>
</ul></div><hr><div><p style="text-align: center;"><br><strong>31 Annual • 13 Interim Forecasts/Revisions</strong></p></div><div><ul>
<li>
<strong>Annual Forecast/Revision Score: </strong>13 Positive / 4 Neutral / 14 Negative</li>
<li>
<strong>Interim Forecast/Revision Score Change: </strong>5 Positive / 1 Neutral / 7 Negative</li>
<li>
<strong>Average Forecast/Revision Score Change:</strong> -3.9</li>
</ul></div>


 Source • Japan Analytics
SMALL CHANGE - With over half of the companies with February, May, August and November year-ends having reported, the gap between the performance of larger and smaller capitalisation companies is widening again - as was the case prior to the March COVID 'crash'. The former are benefiting from a relatively more robust earnings momentum and the willingness of shareholders to look through to 2022. For the latter, their mostly-retail investor base is focused more on the prolongation of current operating losses despite, in many cases, ample Net Financial Assets.  42% of companies reporting on Friday had net losses for the last three months on an average decline in revenues of 14%. For the next reporting 'cohort' with one less 'normal' month, these statistics will be worse.
DAILY STATS
83 Quarterly Results

Results Score: 19 Positive / 3 Neutral / 61 Negative

Average Results Score Change: -4.4

Average % Change in Revenue: -14.2% Quarter YoY / -0.9% Rolling TTM YoY

Average Operating Profit Margin Change: -0.7ppt

Percentage Making Quarterly Losses: 42%
 31 Annual • 13 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 13 Positive / 4 Neutral / 14 Negative

Interim Forecast/Revision Score Change: 5 Positive / 1 Neutral / 7 Negative

Average Forecast/Revision Score Change: -3.9


🇯🇵 JAPAN • Results & Revisions 10th July - Small Change

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><em><strong>The following is an in-depth review of the retail sector results for 2018-19 giving investors a quick overview of the strengths and weaknesses in the sector as well as highlighting key winners and losers by sales growth and profit. <a href="https://www.smartkarma.com/insights/japan-retail-highlights-2018-19-sector-by-sector-and-winners-in-each-sector" target="_blank" rel="noopener">In an accompanying Insight, we provide snapshot reviews of each sector to give investors quick guides to seach retail sector's strengths and weaknesses.</a></strong></em></p>
<p>Leading retailers grew sales and share last year and made more money too. Although savings rates rose to their highest level ever in 2018, this also meant that a lot of households had money stored up, providing better retailers and brands with an opportunity to convince them to spend some of it.</p>
<p>Many formats and sectors had a good year including convenience stores, discount chains, drugstores, speciality chains such as in fashion and even consumer electronics (at least for now), but some also contracted, notably GMS chains and department stores.</p>
<p>Retailing also became more profitable last year, up 6% on average for the top 250 retailers, and is expected to grow profits further on the back of new technologies wrought by the pressures of the labour shortage. However, profit growth is slowing as competition increases across different formats.</p>

The following is an in-depth review of the retail sector results for 2018-19 giving investors a quick overview of the strengths and weaknesses in the sector as well as highlighting key winners and losers by sales growth and profit. In an accompanying Insight, we provide snapshot reviews of each sector to give investors quick guides to seach retail sector's strengths and weaknesses.
Leading retailers grew sales and share last year and made more money too. Although savings rates rose to their highest level ever in 2018, this also meant that a lot of households had money stored up, providing better retailers and brands with an opportunity to convince them to spend some of it.
Many formats and sectors had a good year including convenience stores, discount chains, drugstores, speciality chains such as in fashion and even consumer electronics (at least for now), but some also contracted, notably GMS chains and department stores.
Retailing also became more profitable last year, up 6% on average for the top 250 retailers, and is expected to grow profits further on the back of new technologies wrought by the pressures of the labour shortage. However, profit growth is slowing as competition increases across different formats.

Japan Retail Review and Ranking 2018-19: Profit Growth Slowing as Competition Increases

<p>Fashion is already the largest single category online, but it also a sector that is developing rapidly. While the bulk of sales come from the leading malls, <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon.com Inc (AMZN US)</a>, <a href="https://www.smartkarma.com/entities/31" target="_blank" data-smartkarma-citation="entities:31:1">Rakuten (4755 JP)</a>, <a href="https://www.smartkarma.com/entities/19603" target="_blank" data-smartkarma-citation="entities:19603:1">Yahoo Japan (4689 JP)</a> and <a href="https://www.smartkarma.com/entities/18379" target="_blank" data-smartkarma-citation="entities:18379:1">ZOZO Inc (3092 JP)</a>, more competition is emerging from a growing number of smaller malls.</p><p><strong>There are clear signs of a 2-speed fashion e-commerce market emerging, with a small group of winners among malls and retailers (reviewed below) and the rest slowly catching up behind.</strong></p><p>At the same time, fashion retailers are increasingly looking to add their own, directly controlled online stores.</p><p>For now, there is plenty of room for everyone to expand, but we will increasingly see a two-pronged system emerge, with brands still selling on malls, but also developing exclusive brand lines for their own stores.</p><p>At the same time, they will adapt retail stores to become part of a full omnichannel experience, most likely expanding showrooming stores with big (positive) implications for profitability.</p>

Fashion is already the largest single category online, but it also a sector that is developing rapidly. While the bulk of sales come from the leading malls, Amazon.com Inc (AMZN US), Rakuten (4755 JP), Yahoo Japan (4689 JP) and ZOZO Inc (3092 JP), more competition is emerging from a growing number of smaller malls.There are clear signs of a 2-speed fashion e-commerce market emerging, with a small group of winners among malls and retailers (reviewed below) and the rest slowly catching up behind.At the same time, fashion retailers are increasingly looking to add their own, directly controlled online stores.For now, there is plenty of room for everyone to expand, but we will increasingly see a two-pronged system emerge, with brands still selling on malls, but also developing exclusive brand lines for their own stores.At the same time, they will adapt retail stores to become part of a full omnichannel experience, most likely expanding showrooming stores with big (positive) implications for profitability.

Japan Fashion E-Commerce Review: More Competition Coming for ZOZO and Rakuten

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/paris-miki-holdings-inc" target="_blank" data-smartkarma-citation="entities:15251:1" rel="noopener">Paris Miki Holdings (7455 JP)</a> has recommended a Chairman-led MBO at JPY581, a 48.6% premium to the last close price.</li>
<li>While the offer is arguably light as it is marginally below book value (P/B of 0.99x), it is above the midpoint of the IFA DCF valuation range. </li>
<li>The offer represents a 10-year high. <a target="_blank">Luxottica Group (LUX IM)</a>, the second-largest shareholder, has not signalled whether it will tender, but it would struggle to derail the offer.</li>
</ul>



Paris Miki Holdings (7455 JP) has recommended a Chairman-led MBO at JPY581, a 48.6% premium to the last close price.
While the offer is arguably light as it is marginally below book value (P/B of 0.99x), it is above the midpoint of the IFA DCF valuation range. 
The offer represents a 10-year high. Luxottica Group (LUX IM), the second-largest shareholder, has not signalled whether it will tender, but it would struggle to derail the offer.


Paris Miki (7455 JP): Chairman-Led MBO Likely Done Despite Luxottica’s Unclear Intentions

<ul>
<li>Intermestic, operator of the eyewear retailer, Zoff, has acquired Megane Super for ¥19 billion. </li>
<li>WIth 620 stores, the combined new eyewear chain is larger than JINS, but the latter still has higher sales, at least for now.</li>
<li>Zoff will use Megane Super’s expertise to take more share in the contact lens market but will also use its new scale to expand its own chain.</li>
</ul>


Intermestic, operator of the eyewear retailer, Zoff, has acquired Megane Super for ¥19 billion. 
WIth 620 stores, the combined new eyewear chain is larger than JINS, but the latter still has higher sales, at least for now.
Zoff will use Megane Super’s expertise to take more share in the contact lens market but will also use its new scale to expand its own chain.


Intermestic (Zoff) Doubles Stores to 600 with Megane Super Purchase

Japan

JINS HOLDINGS Inc. sells eyeglass products. The Company mainly distributes thin aspheric lenses and other products. JINS Holdings also provides medial products, apparels, and other products.

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JINS Inc (3046 JP)

🇯🇵 JAPAN • Results & Revisions 10th July - Small Change

SMALL CHANGE - With over half of the companies with February, May, August and November year-ends having reported, the gap between the performance...

Campbell Gunn

Japan Retail Review and Ranking 2018-19: Profit Growth Slowing as Competition Increases

The following is an in-depth review of the retail sector results for 2018-19 giving investors a quick overview of the strengths and weaknesses in...

Michael Causton

Japan Fashion E-Commerce Review: More Competition Coming for ZOZO and Rakuten

Fashion is already the largest single category online, but it also a sector that is developing rapidly. While the bulk of sales come from the...

Michael Causton

Paris Miki (7455 JP): Chairman-Led MBO Likely Done Despite Luxottica’s Unclear Intentions

The offer represents a 10-year high. Luxottica, the second-largest shareholder, has not signalled whether it will tender, but it would struggle to...

Arun George

Intermestic (Zoff) Doubles Stores to 600 with Megane Super Purchase

Intermestic's acquisition of Megane Super for ¥19 billion creates a larger eyewear chain to compete with JINS, with plans to expand in the contact...

Michael Causton

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52-week Range

Market Cap (USDm)

P/E

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🇯🇵 JAPAN • Results & Revisions 10th July - Small Change

SMALL CHANGE - With over half of the companies with February, May, August and November year-ends having reported, the gap between the performance...

Campbell Gunn

Japan Retail Review and Ranking 2018-19: Profit Growth Slowing as Competition Increases

The following is an in-depth review of the retail sector results for 2018-19 giving investors a quick overview of the strengths and weaknesses in...

Michael Causton

Japan Fashion E-Commerce Review: More Competition Coming for ZOZO and Rakuten

Fashion is already the largest single category online, but it also a sector that is developing rapidly. While the bulk of sales come from the...

Michael Causton

Paris Miki (7455 JP): Chairman-Led MBO Likely Done Despite Luxottica’s Unclear Intentions

The offer represents a 10-year high. Luxottica, the second-largest shareholder, has not signalled whether it will tender, but it would struggle to...

Arun George

Intermestic (Zoff) Doubles Stores to 600 with Megane Super Purchase

​Intermestic's acquisition of Megane Super for ¥19 billion creates a larger eyewear chain to compete with JINS, with plans to expand in the contact...

Michael Causton

Intermestic's acquisition of Megane Super for ¥19 billion creates a larger eyewear chain to compete with JINS, with plans to expand in the contact...