Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Merger synergies such as integrated purchasing will result in higher gross margins. A more efficient cost structure and sales synergies will boost the bottom line </li>
<li>We expect consumption to normalize in Japan as people get used to "living with covid."  Higher foot traffic will drive a resumption of high margin cosmetics </li>
<li>Inbound travel should be partially normalized this year and we believe the market will quickly price this in once borders reopen. We see 21% upside </li>
</ul>


Merger synergies such as integrated purchasing will result in higher gross margins. A more efficient cost structure and sales synergies will boost the bottom line 
We expect consumption to normalize in Japan as people get used to "living with covid."  Higher foot traffic will drive a resumption of high margin cosmetics 
Inbound travel should be partially normalized this year and we believe the market will quickly price this in once borders reopen. We see 21% upside 


MatsukiyoCocokara (3088) | Triple Booster of Merger Synergies, Domestic Recovery, & Tourism

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. 

<ul>
<li>Last month, Welcia announced the acquisition of Kokumin, the 30th ranked drugstore that runs a well-respected chain stretching across the country. </li>
<li>As the newly formed Matsukiyo Cocokara group continues to struggle, another year of high growth means Welcia will be only just behind when FY2021 results come in.</li>
<li>Overall growth in the drugstore sector remains strong and could even overtake convenience stores in the near future.</li>
</ul>


Last month, Welcia announced the acquisition of Kokumin, the 30th ranked drugstore that runs a well-respected chain stretching across the country. 
As the newly formed Matsukiyo Cocokara group continues to struggle, another year of high growth means Welcia will be only just behind when FY2021 results come in.
Overall growth in the drugstore sector remains strong and could even overtake convenience stores in the near future.


Welcia's Purchase of Kokumin: Watch Out Matsukiyo Cocokara

<ul>
<li>The Matsumotokiyoshi and Cocokara Fine merger is now complete following almost two years of dealing, planning and company bonding.</li>
<li>The combined business creates the single biggest drugstore group in Japan, although the Tokyo-based partners have lost ground in the past year while others have grown strongly.</li>
<li>As a result, the lead is smaller than they previously expected – and will likely get smaller still. The good news is that profits should soar.</li>
</ul>


The Matsumotokiyoshi and Cocokara Fine merger is now complete following almost two years of dealing, planning and company bonding.
The combined business creates the single biggest drugstore group in Japan, although the Tokyo-based partners have lost ground in the past year while others have grown strongly.
As a result, the lead is smaller than they previously expected – and will likely get smaller still. The good news is that profits should soar.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: ARA Logos/ESR-REIT, Z Energy, Ausnutria, MatsukiyoCocokara

Travis Lundy

Nearly 21 months after starting talks to merge when a rival had made a bid for <a href="https://www.smartkarma.com/entities/cocokara-fine-inc" target="_blank" data-smartkarma-citation="entities:15447:1" rel="noopener">Cocokara Fine (3098 JP)</a>, Cocokara and Matsumoto Kiyoshi Holdings (3088 JP) <a href="https://www.smartkarma.com/entities/matsumotokiyoshi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2259:1" rel="noopener"></a>announced a merger in February 2021 which undervalued Cocokara, to the chagrin of my earlier ratio guesstimates and activist investors disappointed with how cheaply Matsumoto Kiyoshi acquired control. I discussed the merger in <a href="https://www.smartkarma.com/insights/matsukiyococokara-co-the-merger" target="_blank" data-smartkarma-citation="insights:48652" rel="noopener">MatsukiyoCocokara &amp; Co - The Merger</a> and then <a href="https://www.smartkarma.com/insights/matsukiyococokara-merger-and-implied-forward-forecasts" target="_blank" data-smartkarma-citation="insights:48679" rel="noopener">MatsuKiyoCocokara Merger and Implied Forward Forecasts</a> then the activist noise in <a href="https://www.smartkarma.com/insights/matsukiyo-cocokara-situation-gets-its-activist-noise-started" target="_blank" data-smartkarma-citation="insights:49024" rel="noopener">Matsukiyo-Cocokara Situation Gets Its Activist Noise Started</a>. The activist noise - as expected in this case - came to nothing, but the shares gained, lost ground, and have since regained some ground as the merger date came closer. The two companies merged and became <a href="https://www.smartkarma.com/entities/matsumotokiyoshi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2259:1" rel="noopener">Matsumotokiyoshi Holdings Co., Ltd. (3088 JP)</a>.I was, at the time, quite bullish on the prospects for the combined entity. And there were interesting events to come, associated with the deal. The stock has done well-ish.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/853/original/Screenshot+2021-10-13+at+6.07.19+PM.png?1634119663" class="editor-image img-responsive" data-smartkarma-image-id="234853"></figure></section>I think that is not the end of the story. There is more to come.More below the fold.

Nearly 21 months after starting talks to merge when a rival had made a bid for Cocokara Fine (3098 JP), Cocokara and Matsumoto Kiyoshi Holdings (3088 JP) announced a merger in February 2021 which undervalued Cocokara, to the chagrin of my earlier ratio guesstimates and activist investors disappointed with how cheaply Matsumoto Kiyoshi acquired control. I discussed the merger in MatsukiyoCocokara &amp; Co - The Merger and then MatsuKiyoCocokara Merger and Implied Forward Forecasts then the activist noise in Matsukiyo-Cocokara Situation Gets Its Activist Noise Started. The activist noise - as expected in this case - came to nothing, but the shares gained, lost ground, and have since regained some ground as the merger date came closer. The two companies merged and became Matsumotokiyoshi Holdings Co., Ltd. (3088 JP).I was, at the time, quite bullish on the prospects for the combined entity. And there were interesting events to come, associated with the deal. The stock has done well-ish.I think that is not the end of the story. There is more to come.More below the fold. 

MatsuKiyoCocokara Merged - Interesting Implications Indeed

Japan

MatsukiyoCocokara & Co. operates drug store chains. The Company retails medicines, cosmetics, health foods, beauty care products, and other products. MatsukiyoCocokara & also operates supermarkets and home centers.

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MatsukiyoCocokara (3088 JP)

MatsukiyoCocokara (3088) | Triple Booster of Merger Synergies, Domestic Recovery, & Tourism

Matsukiyo is already starting to benefit from merger synergies with Cocokara. We see further upside to earnings from a domestic recovery in...

Mark Chadwick

Welcia's Purchase of Kokumin: Watch Out Matsukiyo Cocokara

Matsukiyo Cocokara may be No. 1 for now in Japan's drugstore sector but Welcia and Tsuruha are not standing still. Welcia's acquisition of Kokumin...

Michael Causton

Matsukiyo Cocokara: Together at Last

MatsukiyoCocokara may top the drugstore ranking post-merger but Welcia and Tsuruha have grown much faster and may take the lead again soon given...

Michael Causton

Last Week in Event SPACE: ARA Logos/ESR-REIT, Z Energy, Ausnutria, MatsukiyoCocokara

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

MatsuKiyoCocokara Merged - Interesting Implications Indeed

MatsuKiyo and Cocokara have merged and NEWCO MatsuKiyoCocokara is now a lowish Real World Float stock which is about to see that float squeezed...

Travis Lundy

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