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

TORIDOLL Holdings Corporation / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toridoll-holdings-corporation" target="_blank" data-smartkarma-citation="entities:8193:1" rel="noopener">TORIDOLL Holdings Corporation (3397 JP)</a> is one of the largest restaurant chains in Japan with over 1,100 restaurants in the domestic market and another 600+ restaurants in overseas markets.</li>
<li>The company’s fully owned subsidiary, Hong Kong based rice noodle chain operator, <a href="https://www.smartkarma.com/entities/tam-jai-international-co-ltd" target="_blank" data-smartkarma-citation="entities:34227:1" rel="noopener">Tam Jai International (TJI HK)</a> is seeking a listing on the Hong Kong stock exchange. Although Tam Jai’s IPO valuation is still unknown, we think the IPO could get a valuation of around HK$ 11.9bn, which is around 76% and 50% of Toridoll’s current market cap and EV respectively.</li>
<li>Based on the estimated valuation of Tam Jai, Toridoll’s domestic business and other overseas restaurant ventures are trading at cheap implied valuation multiples compared to peers, suggesting that there could be an upside upon completion of the Tam Jai International IPO.</li>
</ul>



TORIDOLL Holdings Corporation (3397 JP) is one of the largest restaurant chains in Japan with over 1,100 restaurants in the domestic market and another 600+ restaurants in overseas markets.
The company’s fully owned subsidiary, Hong Kong based rice noodle chain operator, Tam Jai International (TJI HK) is seeking a listing on the Hong Kong stock exchange. Although Tam Jai’s IPO valuation is still unknown, we think the IPO could get a valuation of around HK$ 11.9bn, which is around 76% and 50% of Toridoll’s current market cap and EV respectively.
Based on the estimated valuation of Tam Jai, Toridoll’s domestic business and other overseas restaurant ventures are trading at cheap implied valuation multiples compared to peers, suggesting that there could be an upside upon completion of the Tam Jai International IPO.


Tam Jai International IPO Could Unlock The Value of Toridoll’s Smaller Business Operations

Equity Capital Markets

Tam Jai International / Equity Capital Markets

<ul>
<li>Rice noodle chain operator, <a href="https://www.smartkarma.com/entities/tam-jai-international-co-ltd" target="_blank" data-smartkarma-citation="entities:34227:1" rel="noopener">Tam Jai International (TJI HK)</a> completed its listing hearing and received approval for the proposed US$100.0m IPO on the Hong Kong Stock Exchange on 13th September 2021.</li>
<li>
<a href="https://www.smartkarma.com/entities/toridoll-holdings-corporation" target="_blank" data-smartkarma-citation="entities:8193:1" rel="noopener">TORIDOLL Holdings Corporation (3397 JP)</a>, the biggest operator of noodle shops in Japan, took control of stagnating TamJai and SamGor restaurant chains in 2018 from its founder to restructure and turn around the noodle chains to fast growth and highly profitable businesses.</li>
<li>We like Tam Jai International under Toridoll’s management as Toridoll seems capable of taking the popular TamJai and SamGor restaurant brands global while continuing to expand TamJai’s and SamGor’s presence in the domestic market (Hong Kong).</li>
</ul>


Rice noodle chain operator, Tam Jai International (TJI HK) completed its listing hearing and received approval for the proposed US$100.0m IPO on the Hong Kong Stock Exchange on 13th September 2021.

TORIDOLL Holdings Corporation (3397 JP), the biggest operator of noodle shops in Japan, took control of stagnating TamJai and SamGor restaurant chains in 2018 from its founder to restructure and turn around the noodle chains to fast growth and highly profitable businesses.
We like Tam Jai International under Toridoll’s management as Toridoll seems capable of taking the popular TamJai and SamGor restaurant brands global while continuing to expand TamJai’s and SamGor’s presence in the domestic market (Hong Kong).


Tam Jai International IPO: A Big Appetite For Growth Under Toridoll’s Control

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/157/903/original/2020-09-09_10-14-19.png?1599614088" class="editor-image img-responsive" data-smartkarma-image-id="157903"></figure><div class="content-caption">Source for all charts: Japan Analytics</div>LISTED RESTAURANTS - Japan currently has 102 listed restaurant companies with an aggregate market value of ¥4.9 trillion, representing 2.6% of all listed companies and 0.9% of total market value. Only thirteen companies are capitalised at over ¥100 billion, and forty-one have a market value of less than ¥10 billion. The Sector is ripe for consolidation and COVID-19 should provide a catalyst for an acceleration of the process.  Both <a href="https://www.smartkarma.com/entities/create-restaurants-holdings-inc" target="_blank" data-smartkarma-citation="entities:11513:1" rel="noopener">create restaurants (3387 JP)</a>, and <a href="https://www.smartkarma.com/entities/colowide-co-ltd" target="_blank" data-smartkarma-citation="entities:13967:1" rel="noopener">Colowide (7616 JP)</a> have positioned themselves as consolidators, but have become highly leveraged in the process.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/157/917/original/File%202020-09-09%2010%2025%2051.jpeg?1599614981" class="editor-image img-responsive" data-smartkarma-image-id="157917"></figure>Also, the Sector is highly fragmented and segmented by type of food and concept. Only nineteen companies can be deemed 'diversified'. Furthermore, there are only five listed take-out/delivery specialists, of which <a href="https://www.smartkarma.com/entities/ride-on-express-co-ltd" target="_blank" data-smartkarma-citation="entities:2812:1" rel="noopener">Ride On Express (6082 JP)</a> has been the best performer. Overall, the Sector has declined by 3.6% over one year and by 3.2% over three months - a third quartile performance. Colowide's 31% rise over the last month has pushed the Sector into fourth place amongst our thirty market Sectors, fueled by the apparent success of the tender offer for <a href="https://www.smartkarma.com/entities/ootoya-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7329:1" rel="noopener">OOTOYA (2705 JP)</a>.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/157/928/original/2020-09-09_10-38-37.png?1599615530" class="editor-image img-responsive" data-smartkarma-image-id="157928"></figure>YUTAI KEN - One important consideration for investors to note is the widespread practice of offering kabunushi yutai-ken. In addition to dividends, shareholders are sent coupons that can be redeemed at most of the company's restaurants. Many specialist publications review such programs and offer stock recommendations based on the yutai-yield. As a result, restaurant companies in Japan have some of the highest shareholder counts among listed companies. As coupon-customers normally top-up their spending, this practice helps provide a basic level of cash flow but is a costly exercise to administer. However, there is the added benefit of limiting the number of shares for shorting.<a href="https://www.smartkarma.com/entities/yoshinoya-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:14630:1" rel="noopener"></a>100,000+ CLUB - <a href="https://www.smartkarma.com/entities/yoshinoya-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:14630:1" rel="noopener">Yoshinoya (9861 JP)</a>, <a href="https://www.smartkarma.com/entities/atom-corp" target="_blank" data-smartkarma-citation="entities:12420:1" rel="noopener">Atom (7412 JP)</a>, <a href="https://www.smartkarma.com/entities/zensho-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:4586:1" rel="noopener">Zensho (7550 JP)</a>, <a href="https://www.smartkarma.com/entities/kappa-create-co-ltd" target="_blank" data-smartkarma-citation="entities:19456:1" rel="noopener">Kappa Create (7421 JP)</a>, <a href="https://www.smartkarma.com/entities/komeda-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:24019:1" rel="noopener">Komeda (3543 JP)</a>, and <a href="https://www.smartkarma.com/entities/create-restaurants-holdings-inc" target="_blank" data-smartkarma-citation="entities:11513:1" rel="noopener">create (3387 JP)</a> are all in the top-fifty listed companies ranked by the number of shareholders. All exceed 100,000 shareholders -  beef-bowl chain Yoshiniya has 308,265 exceeding <a href="https://www.smartkarma.com/entities/mitsui-co-ltd" target="_blank" data-smartkarma-citation="entities:20799:1" rel="noopener">Mitsui (8031 JP)</a> which has twenty-four times the capitalisation.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/157/942/original/2020-09-09_11-15-31.png?1599617746" class="editor-image img-responsive" data-smartkarma-image-id="157942"></figure>In this DETAIL below, we shall review Colowide's long-term performance, returns and valuation and offer a view on the prospects for further consolidation. The Colowide group currently comprises of two listed chains - <a href="https://www.smartkarma.com/entities/kappa-create-co-ltd" target="_blank" data-smartkarma-citation="entities:19456:1" rel="noopener">Kappa Create (7421 JP)</a> and <a href="https://www.smartkarma.com/entities/atom-corp" target="_blank" data-smartkarma-citation="entities:12420:1" rel="noopener">Atom (7412 JP)</a> and the franchise chain Reins International which also operates in Asia and the US.

Source for all charts: Japan AnalyticsLISTED RESTAURANTS - Japan currently has 102 listed restaurant companies with an aggregate market value of ¥4.9 trillion, representing 2.6% of all listed companies and 0.9% of total market value. Only thirteen companies are capitalised at over ¥100 billion, and forty-one have a market value of less than ¥10 billion. The Sector is ripe for consolidation and COVID-19 should provide a catalyst for an acceleration of the process.  Both create restaurants (3387 JP), and Colowide (7616 JP) have positioned themselves as consolidators, but have become highly leveraged in the process.Also, the Sector is highly fragmented and segmented by type of food and concept. Only nineteen companies can be deemed 'diversified'. Furthermore, there are only five listed take-out/delivery specialists, of which Ride On Express (6082 JP) has been the best performer. Overall, the Sector has declined by 3.6% over one year and by 3.2% over three months - a third quartile performance. Colowide's 31% rise over the last month has pushed the Sector into fourth place amongst our thirty market Sectors, fueled by the apparent success of the tender offer for OOTOYA (2705 JP).YUTAI KEN - One important consideration for investors to note is the widespread practice of offering kabunushi yutai-ken. In addition to dividends, shareholders are sent coupons that can be redeemed at most of the company's restaurants. Many specialist publications review such programs and offer stock recommendations based on the yutai-yield. As a result, restaurant companies in Japan have some of the highest shareholder counts among listed companies. As coupon-customers normally top-up their spending, this practice helps provide a basic level of cash flow but is a costly exercise to administer. However, there is the added benefit of limiting the number of shares for shorting.100,000+ CLUB - Yoshinoya (9861 JP), Atom (7412 JP), Zensho (7550 JP), Kappa Create (7421 JP), Komeda (3543 JP), and create (3387 JP) are all in the top-fifty listed companies ranked by the number of shareholders. All exceed 100,000 shareholders -  beef-bowl chain Yoshiniya has 308,265 exceeding Mitsui (8031 JP) which has twenty-four times the capitalisation.In this DETAIL below, we shall review Colowide's long-term performance, returns and valuation and offer a view on the prospects for further consolidation. The Colowide group currently comprises of two listed chains - Kappa Create (7421 JP) and Atom (7412 JP) and the franchise chain Reins International which also operates in Asia and the US.

🇯🇵 Japan • Colowide (7616 JP) - A Bite Too Far

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

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

Equity Bottom-Up

Haidilao International Holding / Equity Bottom-Up

Haidilao's upcoming IPO is lauded as one of the biggest IPO in 2018 and more importantly, it is a non-technology related business and domestic centric without any potential from being hurt by the ongoing trade war. In this note, we will discuss Haidilao's key strengths, related party transactions, the comparables and real competitors of Haidilao and growth strategy.

Haidilao's upcoming IPO is lauded as one of the biggest IPO in 2018 and more importantly, it is a non-technology related business and domestic centric without any potential from being hurt by the ongoing trade war. In this note, we will discuss Haidilao's key strengths, related party transactions, the comparables and real competitors of Haidilao and growth strategy. 

Haidilao IPO: Hotpot for the Flu from Trade War

Chacko Jacob

<a href="https://www.smartkarma.com/entities/14630" target="_blank" data-smartkarma-citation="entities:14630:1">Yoshinoya Holdings (9861 JP)</a> is the second largest chain of beef bowl restaurants in Japan after <a href="https://www.smartkarma.com/entities/4586" target="_blank" data-smartkarma-citation="entities:4586:1">Zensho Holdings (7550 JP)</a> (Sukiya). The company has adopted a number of strategies in recent years to diversify its offerings and expand its overseas base. We look at some of these strategies and offer our outlook on the company. And since we already cover Zensho, we also provide our pick between the two.

Yoshinoya Holdings (9861 JP) is the second largest chain of beef bowl restaurants in Japan after Zensho Holdings (7550 JP) (Sukiya). The company has adopted a number of strategies in recent years to diversify its offerings and expand its overseas base. We look at some of these strategies and offer our outlook on the company. And since we already cover Zensho, we also provide our pick between the two.

Yoshinoya (9861 JP): Poor Returns From Overseas Investments Obscure Changes to Menu and Kitchen Tech

Japan

TORIDOLL Holdings Corporation operates a variety of restaurants such as skewered grill chicken, Japanese noodle, ramen noodle, Japanese-style pancake, and pasta restaurants.  The Company operates its business at food courts in shopping centers, stations, highway rest areas, and suburbs.

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TORIDOLL Holdings Corporation (3397 JP)

Tam Jai International IPO Could Unlock The Value of Toridoll’s Smaller Business Operations

Tam Jai international currently remains hidden among Toridoll’s businesses. However, if the upcoming IPO fetches around HK$11.9bn valuation,...

Oshadhi Kumarasiri

Tam Jai International IPO: A Big Appetite For Growth Under Toridoll’s Control

We like Tam Jai International under Toridoll’s management as Toridoll seems capable of taking the popular TamJai and SamGor restaurant brands...

Oshadhi Kumarasiri

🇯🇵 Japan • Colowide (7616 JP) - A Bite Too Far

LISTED RESTAURANTS

Campbell Gunn

Haidilao IPO: Hotpot for the Flu from Trade War

Haidilao's upcoming IPO is lauded as one of the biggest IPO in 2018 and more importantly, it is a non-technology related business and domestic...

Henry Soediarko

Yoshinoya (9861 JP): Poor Returns From Overseas Investments Obscure Changes to Menu and Kitchen Tech

Yoshinoya Holdings (9861 JP) is the second largest chain of beef bowl restaurants in Japan after Zensho Holdings (7550 JP) (Sukiya). The company...

Chacko Jacob

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