Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<ul>
<li>Last April I wrote about <a href="https://www.smartkarma.com/entities/tsi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:19259:1" rel="noopener">Tsi Holdings (3608 JP)</a> which was trading at 0.5x EV/EBITDA and where I suggested it could double in 2-3yrs. </li>
<li>The day after I wrote, the stock closed at ¥312/share, briefly touched ¥480 before ending the year at ¥444. On Friday they announced Q3 earnings, now TTM EV/EBITDA is 2.5x.</li>
<li>They also announced a buyback, and the stock is up further. It is worth looking into the details both near-term and what they mean longer-term.</li>
</ul>


Last April I wrote about Tsi Holdings (3608 JP) which was trading at 0.5x EV/EBITDA and where I suggested it could double in 2-3yrs. 
The day after I wrote, the stock closed at ¥312/share, briefly touched ¥480 before ending the year at ¥444. On Friday they announced Q3 earnings, now TTM EV/EBITDA is 2.5x.
They also announced a buyback, and the stock is up further. It is worth looking into the details both near-term and what they mean longer-term.


TSI Holdings (3608) - New Year, New Buyback, Still Good, Still Cheap

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>Adastria's growth has been sporadic in recent years as it adjusts to maturity and saturation in core apparel markets.It has diversification projects but these will take time to develop.</li>
<li>It thinks it can find faster growth by franchising and licensing with already well-known brands, starting with Forever 21.</li>
<li>It also has a new business providing apparel collections to General Merchandise Retailers, starting with Izumi.</li>
</ul>


Adastria's growth has been sporadic in recent years as it adjusts to maturity and saturation in core apparel markets.It has diversification projects but these will take time to develop.
It thinks it can find faster growth by franchising and licensing with already well-known brands, starting with Forever 21.
It also has a new business providing apparel collections to General Merchandise Retailers, starting with Izumi.


Adastria Signs Forever 21, New Growth Through Licensing?

<ul>
<li>Sanyo Shokai has posted losses in every year since FY2016 despite promising a return to profit on an annual basis too.</li>
<li>Its latest 3-year plan is typically optimistic but, equally typically, lacks real substance as to just where this growth will come from.</li>
<li>Of all Japan's larger apparel firms, Sanyo Shokai has the least promising outlook and that is saying something.</li>
</ul>


Sanyo Shokai has posted losses in every year since FY2016 despite promising a return to profit on an annual basis too.
Its latest 3-year plan is typically optimistic but, equally typically, lacks real substance as to just where this growth will come from.
Of all Japan's larger apparel firms, Sanyo Shokai has the least promising outlook and that is saying something.


<ul>
<li>TSI seems to be following a strategy of diversify or die. It is using its vast cash resources to invest in and build new businesses with some success.</li>
<li>But it also has a couple of compelling brands in strong growth sectors, particularly in golf, providing growth of nearly 50% last year in one case.</li>
<li>This isn't enough to sustain overall growth however and more needs to be done to get on to a more secure footing.</li>
</ul>


TSI seems to be following a strategy of diversify or die. It is using its vast cash resources to invest in and build new businesses with some success.
But it also has a couple of compelling brands in strong growth sectors, particularly in golf, providing growth of nearly 50% last year in one case.
This isn't enough to sustain overall growth however and more needs to be done to get on to a more secure footing.


Japan Apparel Diversification: TSI Tries New Markets

<ul>
<li>The outlook for big apparel remains uncertain; most executives are optimistic about a rebound in sales of premium apparel brands, they are also running around looking for ways to diversify.</li>
<li>Despite years of closing stores and a recent re-listing, <a href="https://www.smartkarma.com/entities/world-co-ltd" target="_blank" data-smartkarma-citation="entities:27437:1" rel="noopener">World Co Ltd (3612 JP)</a> remains in uncertain territory as it tries to boost sales of key brands.</li>
<li>More brands may need to close but the apparel firm is at least investing in new ventures, even if small scale.</li>
</ul>


The outlook for big apparel remains uncertain; most executives are optimistic about a rebound in sales of premium apparel brands, they are also running around looking for ways to diversify.
Despite years of closing stores and a recent re-listing, World Co Ltd (3612 JP) remains in uncertain territory as it tries to boost sales of key brands.
More brands may need to close but the apparel firm is at least investing in new ventures, even if small scale.


Japan Apparel Rethink: World Tries Diversification

Japan

TSI Holdings Company Ltd. manufactures men's and women's clothing, and retails women's clothing.  The Company produces and sells coats, dresses, suits, sweaters, shirts, skirts, and pants.

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Tsi Holdings (3608 JP)

TSI Holdings (3608) - New Year, New Buyback, Still Good, Still Cheap

TSI Holdings has been "cheap" since Murakami-san took on its predecessor twenty years ago. The company is now buying back stock. That's great news....

Travis Lundy

Adastria Signs Forever 21, New Growth Through Licensing?

Adastria has suffered from inconsistent growth recently as it adjusted to maturity and the pandemic but has come up with two new growth ideas:...

Michael Causton

Sanyo Shokai: More Unfulfilled Promises

Sanyo Shokai has promised a return to profit for more than five years. There seems to be more chance than for years for this to happen but it...

Michael Causton

Japan Apparel Diversification: TSI Tries New Markets

TSI had a better 2021 than its peers but only thanks to golf. More work is being done and it has some interesting new ventures but growth may not...

Michael Causton

Japan Apparel Rethink: World Tries Diversification

Japan's big apparel firms have slashed operations and remain bullish about their outlook despite a lot of data to the contrary. Growth won't be...

Michael Causton

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