Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Q4 results were a mixed bag with GMV growth slowing to just 6%. However, costs came in better than expected, boosting margins</li>
<li>Management surprise the market with bullish FY6/25 guidance. Expects GMV growth to accelerate to +10% and sees OP at a healthy 22-25 billion yen</li>
<li>Activist investor Oasis has taken a stake in the company. There is an obvious restructuring angle in addition to significant upside from fintech expansion </li>
</ul>


Q4 results were a mixed bag with GMV growth slowing to just 6%. However, costs came in better than expected, boosting margins
Management surprise the market with bullish FY6/25 guidance. Expects GMV growth to accelerate to +10% and sees OP at a healthy 22-25 billion yen
Activist investor Oasis has taken a stake in the company. There is an obvious restructuring angle in addition to significant upside from fintech expansion 


<ul>
<li>Mercari's US operations, responsible for major losses, saw a workforce reduction by 45%, potentially preceding a market exit to improve overall margins.</li>
<li>Fintech growth is strong, with Mercari issuing over 3 million credit cards, achieving a 67% YoY credit balance increase, despite current operational losses</li>
<li>Mercari Hallo, an on-demand work platform, has rapidly gained users and business partners, positioning it to capitalize on Japan's growing gig economy.</li>
</ul>


Mercari's US operations, responsible for major losses, saw a workforce reduction by 45%, potentially preceding a market exit to improve overall margins.
Fintech growth is strong, with Mercari issuing over 3 million credit cards, achieving a 67% YoY credit balance increase, despite current operational losses
Mercari Hallo, an on-demand work platform, has rapidly gained users and business partners, positioning it to capitalize on Japan's growing gig economy.


Mercari (4385) | Fintech and Gig Economy as Key Catalysts

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<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> investors are in a conundrum. The stock is doing well. With one quarter to go, the company just raised its full-year EPS target by 8.3%.</li>
<li>It also raised its H2 dividend by 20+% so the full-year div will be more than 20% higher than previously forecast and up 35+% since last year. All good. </li>
<li>Except for the selling. Potentially lots of selling. And more outperformance begets more selling. Then even more selling in 2024. And 2025? What about 2025? More outperformance begets more selling.</li>
</ul>



Fast Retailing (9983 JP) investors are in a conundrum. The stock is doing well. With one quarter to go, the company just raised its full-year EPS target by 8.3%.
It also raised its H2 dividend by 20+% so the full-year div will be more than 20% higher than previously forecast and up 35+% since last year. All good. 
Except for the selling. Potentially lots of selling. And more outperformance begets more selling. Then even more selling in 2024. And 2025? What about 2025? More outperformance begets more selling.


Fast Retailing UPs Forecasts, Which Creates A Sell/Short Opportunity

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari Inc (4385 JP)</a> is potentially a leading candidate for inclusion in the Nikkei 225 in September. </li>
<li>There are other technical reasons to think it is not. </li>
<li>This insight looks at the issue of why it might be a leading candidate and why it might not be. </li>
</ul>



Mercari Inc (4385 JP) is potentially a leading candidate for inclusion in the Nikkei 225 in September. 
There are other technical reasons to think it is not. 
This insight looks at the issue of why it might be a leading candidate and why it might not be. 


Nikkei 225 Sep 2023 Review - The Mercari Conundrum

<ul>
<li>The sell-side analyst community seems anchored to the view that Mercari is a growth stock</li>
<li>Analysts seem reluctant to turn negative on the name despite taking a large knife to earnings estimates</li>
<li>We repeat our view that the company faces a challenging couple of years and that the stock is still significantly overvalued</li>
</ul>


The sell-side analyst community seems anchored to the view that Mercari is a growth stock
Analysts seem reluctant to turn negative on the name despite taking a large knife to earnings estimates
We repeat our view that the company faces a challenging couple of years and that the stock is still significantly overvalued


Mercari (4385) | Analysts Anchored to Outdated Views

Japan

Mercari, Inc. operates as an electronic commercial company. The Company offers electronic commercial software, operation management, marketing planning, and other marketplace services. Mercari serves customers worldwide.

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Mercari (4385 JP)

Mercari (4385) | Activist to Add Urgency

Q4 results show slowing GMV growth but better costs, management bullish on FY6/25 guidance, activist investor sees restructuring and fintech upside.

Mark Chadwick

Mercari (4385) | Fintech and Gig Economy as Key Catalysts

Mercari's US operations cut workforce by 45% to improve margins, while fintech growth remains strong and Mercari Hallo gains traction in Japan's...

Mark Chadwick

Fast Retailing UPs Forecasts, Which Creates A Sell/Short Opportunity

Fast Retailing announced decent earnings for Q3 and upgraded forecasts for August 2023. It also raised its full-year dividend vs previous guidance....

Travis Lundy

Nikkei 225 Sep 2023 Review - The Mercari Conundrum

Mercari is either a leading candidate for Nikkei 225 inclusion in September 2023. Or it is not. It depends on how you mash the data, interpret the...

Travis Lundy

Mercari (4385) | Analysts Anchored to Outdated Views

The analyst community remains too bullish on Mercari. We have a consensus Bearish view and see up to 40% downside from the stock.

Mark Chadwick

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Mercari (4385) | Activist to Add Urgency

​Q4 results show slowing GMV growth but better costs, management bullish on FY6/25 guidance, activist investor sees restructuring and fintech upside.

Mark Chadwick

Mercari (4385) | Fintech and Gig Economy as Key Catalysts

​Mercari's US operations cut workforce by 45% to improve margins, while fintech growth remains strong and Mercari Hallo gains traction in Japan's...

Mark Chadwick

Fast Retailing UPs Forecasts, Which Creates A Sell/Short Opportunity

Fast Retailing announced decent earnings for Q3 and upgraded forecasts for August 2023. It also raised its full-year dividend vs previous guidance....

Travis Lundy

Nikkei 225 Sep 2023 Review - The Mercari Conundrum

Mercari is either a leading candidate for Nikkei 225 inclusion in September 2023. Or it is not. It depends on how you mash the data, interpret the...

Travis Lundy

Mercari (4385) | Analysts Anchored to Outdated Views

The analyst community remains too bullish on Mercari. We have a consensus Bearish view and see up to 40% downside from the stock.

Mark Chadwick

Q4 results show slowing GMV growth but better costs, management bullish on FY6/25 guidance, activist investor sees restructuring and fintech upside.

Mercari's US operations cut workforce by 45% to improve margins, while fintech growth remains strong and Mercari Hallo gains traction in Japan's...