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

<p><a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a>  posted a sharp improvement in sales at Rakuten Ichiba in 2020 as customers flocked to the e-commerce platform in lieu of shopping at physical stores. Based on our estimates, Rakuten and Amazon are pretty much neck and neck for leadership in e-commerce in Japan.</p>
<p>Going forward, Rakuten is hoping that the growth in cross-use of its e-commerce service by its new mobile subscriber base will continue as it works further to improve fulfilment reliability and coverage both alone and through its new joint venture with Japan Post.</p>
<p>In recognition of the increasing diversity of the company’s businesses, Rakuten will change its name to Rakuten Group from April.</p>

Rakuten Inc (4755 JP)  posted a sharp improvement in sales at Rakuten Ichiba in 2020 as customers flocked to the e-commerce platform in lieu of shopping at physical stores. Based on our estimates, Rakuten and Amazon are pretty much neck and neck for leadership in e-commerce in Japan.
Going forward, Rakuten is hoping that the growth in cross-use of its e-commerce service by its new mobile subscriber base will continue as it works further to improve fulfilment reliability and coverage both alone and through its new joint venture with Japan Post.
In recognition of the increasing diversity of the company’s businesses, Rakuten will change its name to Rakuten Group from April.

Telco/Internet specialist

Kirk Boodry

Redex Research

NTT (Nippon Telegraph & Telephone) / Equity Bottom-Up

<p>NTT posted Q3 20 results modestly ahead of consensus and boosted the FY20 dividend by 5% in the first quarterly report since it bought out the DoCoMo minority stake. The importance of having closer ties between the mobile and fixed-line operations was highlighted by record growth in its local exchange subsidiaries (+4% for a combined NTT East/West) driven we think by telework demand. One sign of this is the sale of wholesale fiber lines outside mobile resale was the highest it has been since Q1 16. DoCoMo results were also solid with mobile service revenue flat YoY and the highest net sub growth since Q4 18.  </p>

NTT posted Q3 20 results modestly ahead of consensus and boosted the FY20 dividend by 5% in the first quarterly report since it bought out the DoCoMo minority stake. The importance of having closer ties between the mobile and fixed-line operations was highlighted by record growth in its local exchange subsidiaries (+4% for a combined NTT East/West) driven we think by telework demand. One sign of this is the sale of wholesale fiber lines outside mobile resale was the highest it has been since Q1 16. DoCoMo results were also solid with mobile service revenue flat YoY and the highest net sub growth since Q4 18.  

NTT Q3 20 Results: Dividend Raise as Fixed-Line and Domestic Businesses Are Steady

<p>Softbank has lifted its full-year guidance for revenue and operating profit after a second consecutive solid quarter, driven by growth in sales to enterprise customers and a smaller budget for coronavirus-related expenses. Looking past Q4, the outlook for FY21 appears positive despite anticipated revenue erosion from reductions in consumer mobile pricing. <a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank Corp (9434 JP)</a>  shares trade at a premium to the sector thanks to heavier Internet exposure from Z Holdings but this year it is delivering leading financial momentum too.  </p>

Softbank has lifted its full-year guidance for revenue and operating profit after a second consecutive solid quarter, driven by growth in sales to enterprise customers and a smaller budget for coronavirus-related expenses. Looking past Q4, the outlook for FY21 appears positive despite anticipated revenue erosion from reductions in consumer mobile pricing. Softbank Corp (9434 JP)  shares trade at a premium to the sector thanks to heavier Internet exposure from Z Holdings but this year it is delivering leading financial momentum too.  

Softbank Corp. Q3 20 Results: Full-Year Guidance up After Second Clear Financial Beat

'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.

Thematic (Sector/Industry)

<div><p style="text-align: center;"><strong>• RESULTS &amp; REVISIONS SUMMARY - 4th FEBRUARY •</strong></p></div><div><p>Of Thursday's 151 results announcements, 69% scored positively for earnings momentum despite trailing revenues falling by 5.1% on average and a 0.8 percentage point decline in operating margins. 12% of companies were in the red for the quarter.  63% of the 64 annual forecasts/revision announcements scored positively, and the average Forecast/Revision score was +2.1 points.</p></div><div>
<p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p>
<p style="text-align: left;">Thursday's 'best' large-cap announcements were <a href="https://www.smartkarma.com/entities/ibiden-co-ltd" target="_blank" data-smartkarma-citation="entities:16630:1" rel="noopener">Ibiden (4062 JP)</a>, <a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a>, and <a href="https://www.smartkarma.com/entities/ntt-data-corp" target="_blank" data-smartkarma-citation="entities:11232:1" rel="noopener">NTT Data (9613 JP)</a>. The 'worst' came from <a href="https://www.smartkarma.com/entities/mitsubishi-ufj-financial-group" target="_blank" data-smartkarma-citation="entities:218:1" rel="noopener">MUFG (8306 JP)</a>, <a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank (9434 JP)</a>, and <a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari (4385 JP)</a>.   </p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/914/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186914"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/912/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186912"></figure></section><section class="figure"><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/913/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186913"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/911/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186911"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/910/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186910"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/186/915/original/image?1612474282" class="editor-image img-responsive" data-smartkarma-image-id="186915"></figure></section></section>
</div><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div>

• RESULTS &amp; REVISIONS SUMMARY - 4th FEBRUARY •Of Thursday's 151 results announcements, 69% scored positively for earnings momentum despite trailing revenues falling by 5.1% on average and a 0.8 percentage point decline in operating margins. 12% of companies were in the red for the quarter.  63% of the 64 annual forecasts/revision announcements scored positively, and the average Forecast/Revision score was +2.1 points.
• BEST &amp; WORST •
Thursday's 'best' large-cap announcements were Ibiden (4062 JP), Takeda Pharmaceutical (4502 JP), and NTT Data (9613 JP). The 'worst' came from MUFG (8306 JP), Softbank (9434 JP), and Mercari (4385 JP).   

Source for all charts &amp; tables: Japan Analytics

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​02/​​​​​​​​​​​​​​​​04 Ibiden, Takeda.

<p>Rakuten has adjusted its pricing structure to flexibly include usage tiers for the first time. This allows it to keep its original pricing of ¥2,980/month for unlimited (on-network) usage but match recent offers from the incumbents with new price points. It is a good response from Rakuten which restores itself as the price leader (when its users are on-network) whilst the flexibility itself becomes a selling point. This will lower average ARPU and service revenue going forward but management says that lower churn and customer acquisition costs should help it keep the timeline to break-even from shifting very much. A “free” tier for &lt;1GB usage is interesting but as the “first 3mn users get free service” campaign shows, price alone is not always enough.    </p>

Rakuten has adjusted its pricing structure to flexibly include usage tiers for the first time. This allows it to keep its original pricing of ¥2,980/month for unlimited (on-network) usage but match recent offers from the incumbents with new price points. It is a good response from Rakuten which restores itself as the price leader (when its users are on-network) whilst the flexibility itself becomes a selling point. This will lower average ARPU and service revenue going forward but management says that lower churn and customer acquisition costs should help it keep the timeline to break-even from shifting very much. A “free” tier for &lt;1GB usage is interesting but as the “first 3mn users get free service” campaign shows, price alone is not always enough.    

Rakuten - Pricing Response Has a Few Surprises but Coverage Remains the Issue

Japan

Softbank Corporation provides mobile phone telecommunication and networking services. The Company offers mobile communication opening, short messaging function opening, video function opening, and other services. Softbank also provides mobile phones.

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Softbank Corp (9434 JP)

Rakuten Surges in 2020

Rakuten's Ichiba online shopping platform had a great year based on early numbers coming from CEO Mikitani and looks to have plenty to look forward...

Michael Causton

NTT Q3 20 Results: Dividend Raise as Fixed-Line and Domestic Businesses Are Steady

NTT posted steady Q3 results with evidence of progress on the fixed line from higher demand for telework solutions. It kept full-year guidance...

Kirk Boodry

Softbank Corp. Q3 20 Results: Full-Year Guidance up After Second Clear Financial Beat

Softbank has lifted its full-year guidance for revenue and operating profit after a second consecutive solid quarter and appears optimistic on the...

Kirk Boodry

🇯🇵 JAPAN • Results & Revisions 02/04 Ibiden, Takeda.

Of Thursday's 151 results announcements, 69% scored positively for earnings momentum despite trailing revenues falling by 5.1% on average and a 0.8...

Campbell Gunn

Rakuten - Pricing Response Has a Few Surprises but Coverage Remains the Issue

Rakuten has responded to incumbents with new pricing that introduces variable pricing. The magnitude of change was largely expected however and...

Kirk Boodry

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Rakuten Surges in 2020

Rakuten's Ichiba online shopping platform had a great year based on early numbers coming from CEO Mikitani and looks to have plenty to look forward...

Michael Causton

NTT Q3 20 Results: Dividend Raise as Fixed-Line and Domestic Businesses Are Steady

NTT posted steady Q3 results with evidence of progress on the fixed line from higher demand for telework solutions. It kept full-year guidance...

Kirk Boodry

Softbank Corp. Q3 20 Results: Full-Year Guidance up After Second Clear Financial Beat

Softbank has lifted its full-year guidance for revenue and operating profit after a second consecutive solid quarter and appears optimistic on the...

Kirk Boodry

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​02/​​​​​​​​​​​​​​​​04 Ibiden, Takeda.

Of Thursday's 151 results announcements, 69% scored positively for earnings momentum despite trailing revenues falling by 5.1% on average and a 0.8...

Campbell Gunn

Rakuten - Pricing Response Has a Few Surprises but Coverage Remains the Issue

Rakuten has responded to incumbents with new pricing that introduces variable pricing. The magnitude of change was largely expected however and...

Kirk Boodry

🇯🇵 JAPAN • Results & Revisions 02/04 Ibiden, Takeda.