Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>TXN lowering capex slightly and commenting that demand remains below 2019 levels a slight negative for SPE and analog/power names such as Rohm and Fuji Elec.</li>
<li>Keysight technologies strong earnings and guidance beat after hours is a strong positive read for Anritsu who offers similar telco testing products.</li>
<li>Poor sales figures from Hainan Island point to a continued tough operating environment in China for cosmetics names such as Shiseido.</li>
</ul>


TXN lowering capex slightly and commenting that demand remains below 2019 levels a slight negative for SPE and analog/power names such as Rohm and Fuji Elec.
Keysight technologies strong earnings and guidance beat after hours is a strong positive read for Anritsu who offers similar telco testing products.
Poor sales figures from Hainan Island point to a continued tough operating environment in China for cosmetics names such as Shiseido.


Japan Morning Connection: Rohm, Anritsu, Shiseido

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

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.

Event-Driven

<ul>
<li>It was reported yesterday that <a href="https://www.smartkarma.com/entities/alimentation-couche-tard-inc" target="_blank" data-smartkarma-citation="entities:25103:1" rel="noopener">Alimentation Couche-Tard (ATD CN)</a> has put forward a bold proposal to acquire <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>.</li>
<li>The offer price remains undisclosed, but the market may be anticipating a significant premium based on the share price movement following the news.</li>
<li>However, we believe the offer price could fall short of market expectations, and it is likely that Seven &amp; i will reject the proposal.</li>
</ul>


It was reported yesterday that Alimentation Couche-Tard (ATD CN) has put forward a bold proposal to acquire Seven &amp; I Holdings (3382 JP).
The offer price remains undisclosed, but the market may be anticipating a significant premium based on the share price movement following the news.
However, we believe the offer price could fall short of market expectations, and it is likely that Seven &amp; i will reject the proposal.


Couche-Tard Targets Seven & I: Seven & I's Pride on the Line

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>There has been a long-term trend of market concentration in Japan's retail sector for more than a decade.</li>
<li>But consolidation is accelerating due to the pressures to find growth in a depopulating market and the winner takes all phenomenon which rewards the leading chains.</li>
<li>With higher growth and greater access to capital for the best retailers, the net result is dramatically higher levels of M&amp;A in sectors like drugstores and even supermarkets.  </li>
</ul>


There has been a long-term trend of market concentration in Japan's retail sector for more than a decade.
But consolidation is accelerating due to the pressures to find growth in a depopulating market and the winner takes all phenomenon which rewards the leading chains.
With higher growth and greater access to capital for the best retailers, the net result is dramatically higher levels of M&amp;A in sectors like drugstores and even supermarkets.  


Japan Retail: Market Concentration Accelerates Through M&A and Organic Growth

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.

<ul>
<li>
<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> shares rose 22.7% as it confirmed media reports that it had received a confidential, non-binding preliminary proposal from <a href="https://www.smartkarma.com/entities/alimentation-couche-tard-inc" target="_blank" data-smartkarma-citation="entities:25103:1" rel="noopener">Alimentation Couche-Tard (ATD CN)</a>. </li>
<li>The interest is unsurprising due to the weak share price performance. Since ValueAct’s open letter on 25 January 2022, the shares are up 5.2% vs. the Nikkei 225 up 38.0%.</li>
<li>Couche-Tard aims for a friendly offer, which is challenging as it requires support from the founder’s family and the Japanese government. Therefore, the probability of a binding proposal is low.  </li>
</ul>



Seven &amp; I Holdings (3382 JP) shares rose 22.7% as it confirmed media reports that it had received a confidential, non-binding preliminary proposal from Alimentation Couche-Tard (ATD CN). 
The interest is unsurprising due to the weak share price performance. Since ValueAct’s open letter on 25 January 2022, the shares are up 5.2% vs. the Nikkei 225 up 38.0%.
Couche-Tard aims for a friendly offer, which is challenging as it requires support from the founder’s family and the Japanese government. Therefore, the probability of a binding proposal is low.  


Seven & I Holdings (3382 JP): Couche-Tard “friendly” Proposal Likely to Go Nowhere

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

<ul>
<li>With nominal GDP growing 6%YoY in the latest 3 quarters, Japanese interest rates will be gradually normalized. The JPY rebound, however, precludes the need for rapid BoJ hikes. </li>
<li>Unwinding of Yen carry-trades should take JPY to ¥125/US$ by end-2024, which will contribute to tightening monetary conditions sufficiently, further slowing inflation (from 2.85%YoY in May-Jun'24). </li>
<li>Appreciating JPY is bad for Japanese equities, so stay Underweight, with a defensive portfolio comprising utilities, pharmaceuticals and consumer staples. </li>
</ul>


With nominal GDP growing 6%YoY in the latest 3 quarters, Japanese interest rates will be gradually normalized. The JPY rebound, however, precludes the need for rapid BoJ hikes. 
Unwinding of Yen carry-trades should take JPY to ¥125/US$ by end-2024, which will contribute to tightening monetary conditions sufficiently, further slowing inflation (from 2.85%YoY in May-Jun'24). 
Appreciating JPY is bad for Japanese equities, so stay Underweight, with a defensive portfolio comprising utilities, pharmaceuticals and consumer staples. 


Japan: Normalizing Interest Rates as Nominal GDP Surges, Ending Deflation Era

Japan

Seven & i Holdings Co., Ltd. is a holding company which was established through the merger of Ito-Yokado Co., Seven Eleven Japan Co., and Denny's Japan. The Company plans, manages, and operates mainly convenience stores, supermarkets, and department stores.

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Seven & I Holdings (3382 JP)

Japan Morning Connection: Rohm, Anritsu, Shiseido

TXN's lower capex and weak demand as slight negative for SPE and analog/power companies; Keysight's strong earnings and guidance is positive for...

Andrew Jackson

Couche-Tard Targets Seven & I: Seven & I's Pride on the Line

Alimentation Couche-Tard makes bold proposal to acquire Seven & I Holdings, but offer price may fall short of market expectations.

Oshadhi Kumarasiri

Japan Retail: Market Concentration Accelerates Through M&A and Organic Growth

Market concentration in Japan's retail sector has been increasing due to the need for growth in a shrinking market, leading to a surge in M&A...

Michael Causton