Independent Research, US Dominant Players, Investment Talk

Investment Talk

Independent Research, US Dominant Players

Investment Talk is for readers who wish to learn about companies that are potentially outside of their own circle of research, as well as those who are longing to become part of a community of like-minded investors and learn more about investment research. I would describe myself as a long-term investor who typically takes a 3Y to 5Y outlook, before reassessing once that period matures. I follow the adage that one should research, reach a conclusion, and then verify and continue to hold so long as the thesis remains intact. My own investing style is one that seeks to find dominant players within their respective market who have shown signs of monopoly or oligopolistic behaviour, unlikely to be disrupted, in tandem with discovering market disruptors who have a high likelihood of disrupting their respective market. Equally (and weighted accordingly) I seek to discover more nuanced, misunderstood, situations with a shorter time frame.

Equity Bottom-Up

<ul>
<li>The memo I shared about Kura Sushi five days ago had two conclusions.</li>
<li>The fundamentals of the business continue to endure and the company was going to have to raise cash fairly soon.</li>
<li>I noted that “I believe within the next 6-12 months, we may see Kura issue additional stock or tap into their credit line”.</li>
</ul>


The memo I shared about Kura Sushi five days ago had two conclusions.
The fundamentals of the business continue to endure and the company was going to have to raise cash fairly soon.
I noted that “I believe within the next 6-12 months, we may see Kura issue additional stock or tap into their credit line”.


<ul><li>Despite now being valued at ~$635 million (down ~32% from ATHs) Kura Sushi, the small-time restaurant operator with 40 stores across the United States, continues to boast an overzealous market valuation.</li><li>Perhaps it’s their ability to consistently beat expectations. Perhaps it’s because they remain undercovered and somewhat illiquid for their size (the parent organisation owns a considerable amount of outstanding shares).</li><li>I can’t be sure, nor do I really care. After reporting Q4 earnings last week, Kura rounded off the year in style, continuing to demonstrate a healthy recovery in demand for their service.</li></ul>

Despite now being valued at ~$635 million (down ~32% from ATHs) Kura Sushi, the small-time restaurant operator with 40 stores across the United States, continues to boast an overzealous market valuation.Perhaps it’s their ability to consistently beat expectations. Perhaps it’s because they remain undercovered and somewhat illiquid for their size (the parent organisation owns a considerable amount of outstanding shares).I can’t be sure, nor do I really care. After reporting Q4 earnings last week, Kura rounded off the year in style, continuing to demonstrate a healthy recovery in demand for their service.

That's a Wrap, Kura Exits 2022 on a High Note

Research from Mita Securities, Mita Securities

Mita Securities

Research from Mita Securities

Mita Securities provides a full scale diversified investment banking and financial services. A comprehensive investment banking department, specializes in rights offerings advisory, take-over bids agents, M&A etc. Including a proprietary trading desk, and wealth management department that offers brokerage, custody, real estate, and full proxy services.

<ul>
<li>Same-store sales were 108.6% vs. June 2021 (113.6% for May), 101.5% vs. June 2020 (128.0% for May), and 98.9% vs. June 2019 (102.4% for May)</li>
<li>The company ran a Sanrio Characters campaign in June. The prizes featuring popular characters such as "Cinnamoroll" seem to have been well received by the customers</li>
<li>The number of stores at the end of June was 516 in Japan (+2 MoM), 37 in the U.S. (flat MoM), and 46 in Taiwan (+1 MoM). The total number of stores was 599 (+3 MoM)</li>
</ul>


Same-store sales were 108.6% vs. June 2021 (113.6% for May), 101.5% vs. June 2020 (128.0% for May), and 98.9% vs. June 2019 (102.4% for May)
The company ran a Sanrio Characters campaign in June. The prizes featuring popular characters such as "Cinnamoroll" seem to have been well received by the customers
The number of stores at the end of June was 516 in Japan (+2 MoM), 37 in the U.S. (flat MoM), and 46 in Taiwan (+1 MoM). The total number of stores was 599 (+3 MoM)


Kura Sushi (2695): Dominates Sushi Market with Sanrio Power

<ul><li>Kura Sushi (2695, the company) announced 1H FY10/22 (Nov-Apr) results, with sales of 89.312bn yen (+19.7% YoY), OP 323m yen (-24.6% YoY), and RP 3.507bn yen (+196.0% YoY)</li><li>In Japan, 1H sales were 74.995bn yen (+11.8% YoY) and RP was 3.167bn yen (+69.7%YoY). The number of stores was up +8% YoY</li><li>The number of stores at the end of 1H was 593 (+26 from end-FY10/21)</li></ul>

Kura Sushi (2695, the company) announced 1H FY10/22 (Nov-Apr) results, with sales of 89.312bn yen (+19.7% YoY), OP 323m yen (-24.6% YoY), and RP 3.507bn yen (+196.0% YoY)In Japan, 1H sales were 74.995bn yen (+11.8% YoY) and RP was 3.167bn yen (+69.7%YoY). The number of stores was up +8% YoYThe number of stores at the end of 1H was 593 (+26 from end-FY10/21)

Kura Sushi (2695): Aggressive Operations Continued Through 2Q

<ul><li>Same-store sales were in line with the pre-pandemic levels, and our impression is neutral.</li><li>Same-store sales of other revolving sushi formats in April (compared to April 2021 and April 2019) were 105.3% and 104.2% for Sushiro (Food &amp; Life Companies), 108.4% and 94.5% for Genki Sushi, and 103.7% and 87.1% for Kappa Sushi, respectively.</li><li>The number of stores at the end of April was 512 in Japan (+2MoM), 37 in the U.S. (+/-0 MoM), and 45 in Taiwan (+/-0 MoM)</li></ul>

Same-store sales were in line with the pre-pandemic levels, and our impression is neutral.Same-store sales of other revolving sushi formats in April (compared to April 2021 and April 2019) were 105.3% and 104.2% for Sushiro (Food &amp; Life Companies), 108.4% and 94.5% for Genki Sushi, and 103.7% and 87.1% for Kappa Sushi, respectively.The number of stores at the end of April was 512 in Japan (+2MoM), 37 in the U.S. (+/-0 MoM), and 45 in Taiwan (+/-0 MoM)

Kura Sushi (2695): Detective Conan in April, Dragon Ball in May

Japan

KURA CORPORATION operates a revolving sushi restaurant chain based in Osaka. The Company operates its own stores.

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Kura Sushi Inc (2695 JP)

Five Days Later

The memo I shared about Kura Sushi five days ago had two conclusions. The fundamentals of the business continue to endure and the company was going...

Investment Talk

That's a Wrap, Kura Exits 2022 on a High Note

Despite now being valued at ~$635 million (down ~32% from ATHs) Kura Sushi, the small-time restaurant operator with 40 stores across the United...

Investment Talk

Kura Sushi (2695): Dominates Sushi Market with Sanrio Power

The company ran a Sanrio Characters campaign in June. The prizes featuring popular characters such as "Cinnamoroll" seem to have been well received...

Mita Securities

Kura Sushi (2695): Aggressive Operations Continued Through 2Q

Kura Sushi (2695, the company) announced 1H FY10/22 (Nov-Apr) results, with sales of 89.312bn yen (+19.7% YoY), OP 323m yen (-24.6% YoY), and RP...

Mita Securities

Kura Sushi (2695): Detective Conan in April, Dragon Ball in May

Same-store sales were in line with the pre-pandemic levels, and our impression is neutral. Same-store sales of other revolving sushi formats in...

Mita Securities

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