Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS: US Equities start on a postive note with SPX, NDX, SOX all gaining; 10/11 SPX sectors rose; Tech lead as US Yields Fell; China Stocks Surged on Govt Measures</li>
<li>JAPAN: NKY Futures +0.4% vs Cash; USDJPY 146.5; NKY records strongest day in Aug; JP Retail turn net buyers; Companies Make promises to boost share px; H2A Rocket Launch Delayed</li>
<li>JAPAN X:  Idemitsu Kosan Prepares for All-Solid-State Battery Era with Production Boost. All is is being driven by Toyota-which is leading to way to commercialization of solid state batteries. </li>
</ul>


OVERSEAS: US Equities start on a postive note with SPX, NDX, SOX all gaining; 10/11 SPX sectors rose; Tech lead as US Yields Fell; China Stocks Surged on Govt Measures
JAPAN: NKY Futures +0.4% vs Cash; USDJPY 146.5; NKY records strongest day in Aug; JP Retail turn net buyers; Companies Make promises to boost share px; H2A Rocket Launch Delayed
JAPAN X:  Idemitsu Kosan Prepares for All-Solid-State Battery Era with Production Boost. All is is being driven by Toyota-which is leading to way to commercialization of solid state batteries. 


Ohayo Japan| Equities Start on a Positive Note; JAPAN X: Idemitsu Ramps Up for Solid State Batteries

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>Sogo &amp; Seibu’s labor union threatens strike if job protection talks stall. This emphasizes the number of considerations <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> had to consider during changes.</li>
<li>Had ValueAct shown more patience, they might have worked with Seven &amp; I to improve the struggling Eto Yokado supermarkets business.</li>
<li>Thus, ValueAct's investor activism campaign seem unlikely to achieve a full restructuring of underperforming businesses at Seven &amp; I.</li>
</ul>


Sogo &amp; Seibu’s labor union threatens strike if job protection talks stall. This emphasizes the number of considerations Seven &amp; I Holdings (3382 JP) had to consider during changes.
Had ValueAct shown more patience, they might have worked with Seven &amp; I to improve the struggling Eto Yokado supermarkets business.
Thus, ValueAct's investor activism campaign seem unlikely to achieve a full restructuring of underperforming businesses at Seven &amp; I.


Seven & I: An Update on Investor Activism

<ul>
<li>OVERSEAS.  Disinflation Trade on as US PPI provides more tailwinds; Rates, USD Fall; Equites rally, More China Stimulus Coming ? Ripple resolution spurs Crypto bid; AI Wars: Meta Updates BARD</li>
<li>JAPAN. Nikkei Futures +1% vs Cash; USDJPY 138; Set for Beta bid in Stocks; Blow out Fast Retailing numbers; Barclays see Sept BOJ tweek; Bullish Bank Initiations from UBS</li>
<li>NUGGET.  Hydrogen is a key part of JP Govt carbon zero strategy. We see KHI(7012) as a Hydrogen winner and see the recent pullback as a good entry opportunity</li>
</ul>


OVERSEAS.  Disinflation Trade on as US PPI provides more tailwinds; Rates, USD Fall; Equites rally, More China Stimulus Coming ? Ripple resolution spurs Crypto bid; AI Wars: Meta Updates BARD
JAPAN. Nikkei Futures +1% vs Cash; USDJPY 138; Set for Beta bid in Stocks; Blow out Fast Retailing numbers; Barclays see Sept BOJ tweek; Bullish Bank Initiations from UBS
NUGGET.  Hydrogen is a key part of JP Govt carbon zero strategy. We see KHI(7012) as a Hydrogen winner and see the recent pullback as a good entry opportunity


Ohayo Japan| Lower Rates, Higher Stocks; Crypto Optimism; NUGGET: Hydrogen Future - KHI(7012)Revisit

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. 

Equity Bottom-Up

<ul>
<li>It will take a couple of years to see financial improvement but recent reforms suggest  criticism of Seven &amp; I’s inability to change may be increasingly unfair.</li>
<li>The latest in-group merger further demonstrates Seven &amp; I’s desire to refocus on food and FMCG.It also suggests that Seven &amp; I may double down on divestment from non-food retailing. </li>
<li>The share price may fluctuate but the outlook for domestic fundamentals are better than they have been for years.</li>
</ul>


It will take a couple of years to see financial improvement but recent reforms suggest  criticism of Seven &amp; I’s inability to change may be increasingly unfair.
The latest in-group merger further demonstrates Seven &amp; I’s desire to refocus on food and FMCG.It also suggests that Seven &amp; I may double down on divestment from non-food retailing. 
The share price may fluctuate but the outlook for domestic fundamentals are better than they have been for years.


Seven & I Merger of FMCG Arms Signals Focus on Food – And Its All Good News

<ul>
<li>Gasoline retail prices have caught up with declining wholesale prices, and it should lead to around 16-20% QoQ decrease in retail fuel margin to ¥35-37 cents per gallon.</li>
<li>US gas station merchandise sales exhibited weak performance this year, experiencing YoY growth rates of 5%, -2%, -15%, -17%, and -22% during the first five months.</li>
<li>We anticipate around 25% downside for <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> after earnings, as it may face challenges in achieving its FY24 guidance.</li>
</ul>


Gasoline retail prices have caught up with declining wholesale prices, and it should lead to around 16-20% QoQ decrease in retail fuel margin to ¥35-37 cents per gallon.
US gas station merchandise sales exhibited weak performance this year, experiencing YoY growth rates of 5%, -2%, -15%, -17%, and -22% during the first five months.
We anticipate around 25% downside for Seven &amp; I Holdings (3382 JP) after earnings, as it may face challenges in achieving its FY24 guidance.


Seven & I: 7-Eleven US Poses Challenges for FY24 Guidance

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)

Ohayo Japan| Equities Start on a Positive Note; JAPAN X: Idemitsu Ramps Up for Solid State Batteries

US Equities start on postiive note; NKY Futures +0.4% vs Cash; USDJPY 146.5; NKY records strongest day in Aug; JP Retail turn net buyers; JP...

Mark Chadwick

Seven & I: An Update on Investor Activism

Sogo & Seibu's labor union threatens strike if job protection talks stall, highlighting considerations for Seven & I Holdings during changes.

Oshadhi Kumarasiri

Ohayo Japan| Lower Rates, Higher Stocks; Crypto Optimism; NUGGET: Hydrogen Future - KHI(7012)Revisit

Disinflation trade continues- Rates down, DXY down, Stocks up; Nikkei Futures +1% vs Cash; USDJPY 138; Set for Beta bid in Stocks; Blow out Fast...

Mark Chadwick

Seven & I Merger of FMCG Arms Signals Focus on Food – And Its All Good News

Seven & I has been getting a hard time of it from a small but loud group of investors but a fair amount of this criticism is unfair. A lot of...

Michael Causton

Seven & I: 7-Eleven US Poses Challenges for FY24 Guidance

Anticipating weaknesses in the US business, we expect downside for Seven & I after FQ1 earnings, as it may face challenges in achieving its FY24...

Oshadhi Kumarasiri

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52-week Range

Market Cap (USDm)

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Ohayo Japan| Equities Start on a Positive Note; JAPAN X: Idemitsu Ramps Up for Solid State Batteries

US Equities start on postiive note; NKY Futures +0.4% vs Cash; USDJPY 146.5; NKY records strongest day in Aug; JP Retail turn net buyers; JP...

Mark Chadwick

Seven & I: An Update on Investor Activism

​Sogo & Seibu's labor union threatens strike if job protection talks stall, highlighting considerations for Seven & I Holdings during changes.

Oshadhi Kumarasiri

Ohayo Japan| Lower Rates, Higher Stocks; Crypto Optimism; NUGGET: Hydrogen Future - KHI(7012)Revisit

Disinflation trade continues- Rates down, DXY down, Stocks up; Nikkei Futures +1% vs Cash; USDJPY 138; Set for Beta bid in Stocks; Blow out Fast...

Mark Chadwick

Seven & I Merger of FMCG Arms Signals Focus on Food – And Its All Good News

Seven & I has been getting a hard time of it from a small but loud group of investors but a fair amount of this criticism is unfair. A lot of...

Michael Causton

Seven & I: 7-Eleven US Poses Challenges for FY24 Guidance

Anticipating weaknesses in the US business, we expect downside for Seven & I after FQ1 earnings, as it may face challenges in achieving its FY24...

Oshadhi Kumarasiri

Sogo & Seibu's labor union threatens strike if job protection talks stall, highlighting considerations for Seven & I Holdings during changes.