Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Our neutral and cautious outlook continues to be reinforced by market dynamics that have generally deteriorated over the past week. RS improvement for defensives (Utilities, Staples, Real Estate, and Health Care) continues to make these Sectors attractive. Meanwhile, not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Until supports start to break we cannot be bearish, though we would not be surprised to see ~5% downside with potential for more.

Our neutral and cautious outlook continues to be reinforced by market dynamics that have generally deteriorated over the past week. RS improvement for defensives (Utilities, Staples, Real Estate, and Health Care) continues to make these Sectors attractive. Meanwhile, not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Until supports start to break we cannot be bearish, though we would not be surprised to see ~5% downside with potential for more.

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

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)

Monthly sales data for GMS chains and department store branches was withheld last year as companies were reluctant to reveal just how bad things were. For most GMS chains, however, it turns out CY2020 was a great year and for food supermarkets, the shift to buying more fresh food could endure beyond the pandemic. Department stores did poorly but there were some striking differences in performance between stores.

Monthly sales data for GMS chains and department store branches was withheld last year as companies were reluctant to reveal just how bad things were. For most GMS chains, however, it turns out CY2020 was a great year and for food supermarkets, the shift to buying more fresh food could endure beyond the pandemic. Department stores did poorly but there were some striking differences in performance between stores. 

Department Stores and GMS: A Bit Better than Expected in CY2020

'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.

• RESULTS - 28th MARCH •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/197/770/original/image_57334545521616964192596.png?1616964192" class="editor-image img-responsive" data-smartkarma-image-id="197770"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/197/771/original/image_10738985631616964271545.png?1616964271" class="editor-image img-responsive" data-smartkarma-image-id="197771"></figure>RESULTS - Of Friday's seven results announcements, only <a href="https://www.smartkarma.com/entities/demae-can-co-ltd" target="_blank" data-smartkarma-citation="entities:10524:1" rel="noopener">Demae-Can (2484 JP)</a> saw a significant decline in profitability, although our scoring system gives the company credit for the 210% year-on-year change in revenues - they continue to 'make it up on volume'! • FORECASTS/REVISIONS - 28th MARCH •<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/197/772/original/2021-03-27_08-15-34.png?1616964525" class="editor-image img-responsive" data-smartkarma-image-id="197772"></figure></section>FORECASTS/REVISIONS - Of the 32 annual forecasts and revisions, only 56% scored positively of which <a href="https://www.smartkarma.com/entities/life-corp" target="_blank" data-smartkarma-citation="entities:1743:1" rel="noopener">Life (8194 JP)</a> was the largest cap. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/197/774/original/image_47158678551616964791891.png?1616964792" class="editor-image img-responsive" data-smartkarma-image-id="197774"></figure>Meanwhile, urban railway operator <a href="https://www.smartkarma.com/entities/odakyu-electric-railway-co-ltd" target="_blank" data-smartkarma-citation="entities:5405:1" rel="noopener">Odakyu Electric Railway (9007 JP) </a>is forecasting slightly lower full-year operating income but has added ¥8.3 billion in net losses to February's forecast.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/197/775/original/image_73678410461616964884061.png?1616964884" class="editor-image img-responsive" data-smartkarma-image-id="197775"></figure>

• RESULTS - 28th MARCH •RESULTS - Of Friday's seven results announcements, only Demae-Can (2484 JP) saw a significant decline in profitability, although our scoring system gives the company credit for the 210% year-on-year change in revenues - they continue to 'make it up on volume'! • FORECASTS/REVISIONS - 28th MARCH •FORECASTS/REVISIONS - Of the 32 annual forecasts and revisions, only 56% scored positively of which Life (8194 JP) was the largest cap. Meanwhile, urban railway operator Odakyu Electric Railway (9007 JP) is forecasting slightly lower full-year operating income but has added ¥8.3 billion in net losses to February's forecast.

🇯🇵 JAPAN • Results & Revisions 03/​​​​​​​26 - Demae-Can, Life, Odakyu Electric Railway

The following is a review of how physical retailers are progressing online and includes a unique ranking of the TOP 50 Online Retailers by sales, platforms sold on and growth.
Japanese retailers were famously behind peers in other markets to tackle e-commerce but many have caught up and become world class such as <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> and <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP). </a>
More worrying for those lagging behind such as <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, estimates suggest that online will have some role in 50% of purchasing transactions by 2025.
Despite retailers' efforts, the big three online malls, Amazon, Rakuten and Yahoo! Shopping still control half of the e-commerce market for merchandise.

The following is a review of how physical retailers are progressing online and includes a unique ranking of the TOP 50 Online Retailers by sales, platforms sold on and growth.
Japanese retailers were famously behind peers in other markets to tackle e-commerce but many have caught up and become world class such as Fast Retailing (9983 JP) and Nitori Holdings (9843 JP). 
More worrying for those lagging behind such as Seven &amp; I Holdings (3382 JP), estimates suggest that online will have some role in 50% of purchasing transactions by 2025.
Despite retailers' efforts, the big three online malls, Amazon, Rakuten and Yahoo! Shopping still control half of the e-commerce market for merchandise.

Tip of the Iceberg: Omnichannel 50% of Japan Retail in 2025

Penetration (the share of total retail sales) of e-commerce in Japan increased sharply in the past few years but still varies significantly by category.
The following insight looks at each consumer product category and how penetration has grown in the last few years and provides estimates of trends to 2025.
Even with these relatively cautious rates of growth, penetration rates are set to expand significantly in apparel, household &amp; interior, books &amp; media, and stationery but only retailers with form in successful online marketing will benefit from this with major negative implications for the many retailers that have failed to tackle the threat from online. This includes even major retailers like <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> which lags behind <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP), </a><a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a><a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">  and </a><a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a> in the race to lead the battle for leadership in online food retailing.

Penetration (the share of total retail sales) of e-commerce in Japan increased sharply in the past few years but still varies significantly by category.
The following insight looks at each consumer product category and how penetration has grown in the last few years and provides estimates of trends to 2025.
Even with these relatively cautious rates of growth, penetration rates are set to expand significantly in apparel, household &amp; interior, books &amp; media, and stationery but only retailers with form in successful online marketing will benefit from this with major negative implications for the many retailers that have failed to tackle the threat from online. This includes even major retailers like Seven &amp; I Holdings (3382 JP) which lags behind Aeon Co Ltd (8267 JP), Rakuten Inc (4755 JP)  and Amazon.com Inc (AMZN US) in the race to lead the battle for leadership in online food retailing.

E-Commerce Penetration Increasing in All Retail Categories

Japan

LIFE CORPORATION operates a supermarket chain mainly in Kansai and Kanto areas. The Company sells mainly groceries, and also clothing, and household utensils.

Price Gauge
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Life Corp (8194 JP)

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

Our cautious outlook is reinforced by ongoing developments. Relative strength improvement for defensives (Utilities, Staples, Real Estate, Health...

Vermilion Research

Department Stores and GMS: A Bit Better than Expected in CY2020

A review of the 2020 performance of Japanese GMS chains and department stores. There is more growth for food-based GMS retailers but department...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 03/26 - Demae-Can, Life, Odakyu Electric Railway

Of Friday's seven results announcements, only Demae-Can (2484 JP) saw a significant decline in profitability - they continue to 'make it up on...

Campbell Gunn

Tip of the Iceberg: Omnichannel 50% of Japan Retail in 2025

We have compiled a unique ranking of the top 50 E-commerce retailers in Japan and provide an analysis of winners and losers among retailers now and...

Michael Causton

E-Commerce Penetration Increasing in All Retail Categories

A review of online market share in all key consumer categories in Japan, with forecasts for e-commerce market share to 2025 –the sharp growth will...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Crude Oil and Copper Breakdowns Reinforce Our Concerns; Defensive Sectors Remain Attractive

Our cautious outlook is reinforced by ongoing developments. Relative strength improvement for defensives (Utilities, Staples, Real Estate, Health...

Vermilion Research

Department Stores and GMS: A Bit Better than Expected in CY2020

A review of the 2020 performance of Japanese GMS chains and department stores. There is more growth for food-based GMS retailers but department...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 03/​​​​​​​26 - Demae-Can, Life, Odakyu Electric Railway

Of Friday's seven results announcements, only Demae-Can (2484 JP) saw a significant decline in profitability - they continue to 'make it up on...

Campbell Gunn

Tip of the Iceberg: Omnichannel 50% of Japan Retail in 2025

We have compiled a unique ranking of the top 50 E-commerce retailers in Japan and provide an analysis of winners and losers among retailers now and...

Michael Causton

E-Commerce Penetration Increasing in All Retail Categories

A review of online market share in all key consumer categories in Japan, with forecasts for e-commerce market share to 2025 –the sharp growth will...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 03/26 - Demae-Can, Life, Odakyu Electric Railway