Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Shinko Electric Industries / Event-Driven

<ul>
<li>JPX-Nikkei 400 is composed of stocks listed on the Tokyo Stock Exchange selected based on multiple metrics relating to size, liquidity, financial performance, and corporate governance.</li>
<li>The annual rebalance of the JPX-Nikkei 400 Index takes place in August every year and the cut-off date for the data used for this rebalance is the end of June.</li>
<li>In this insight, we take a look at Quiddity's final predictions for Potential ADDs/DELs for the August 2022 review.</li>
</ul>


JPX-Nikkei 400 is composed of stocks listed on the Tokyo Stock Exchange selected based on multiple metrics relating to size, liquidity, financial performance, and corporate governance.
The annual rebalance of the JPX-Nikkei 400 Index takes place in August every year and the cut-off date for the data used for this rebalance is the end of June.
In this insight, we take a look at Quiddity's final predictions for Potential ADDs/DELs for the August 2022 review.


JPX-Nikkei 400 2022 Rebal: Final Predictions

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>Last month, Welcia announced the acquisition of Kokumin, the 30th ranked drugstore that runs a well-respected chain stretching across the country. </li>
<li>As the newly formed Matsukiyo Cocokara group continues to struggle, another year of high growth means Welcia will be only just behind when FY2021 results come in.</li>
<li>Overall growth in the drugstore sector remains strong and could even overtake convenience stores in the near future.</li>
</ul>


Last month, Welcia announced the acquisition of Kokumin, the 30th ranked drugstore that runs a well-respected chain stretching across the country. 
As the newly formed Matsukiyo Cocokara group continues to struggle, another year of high growth means Welcia will be only just behind when FY2021 results come in.
Overall growth in the drugstore sector remains strong and could even overtake convenience stores in the near future.


Welcia's Purchase of Kokumin: Watch Out Matsukiyo Cocokara

<ul>
<li>Aeon is on the acquisition trail again and not only in the drugstore sector through its <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> subsidiary.</li>
<li>Japan's biggest retailer also consolidated its hold on the island of Shikoku by increasing its stake in Fuji and will now own more than 20% of all retail sales.</li>
<li>Signalling its ambitions to carve out a large share of the discount market, Aeon also acquired the 100 YEN retailer, <a href="https://www.smartkarma.com/entities/can-do-co-ltd" target="_blank" data-smartkarma-citation="entities:6879:1" rel="noopener">Can Do Co Ltd (2698 JP).</a>
</li>
</ul>


Aeon is on the acquisition trail again and not only in the drugstore sector through its Welcia Holdings (3141 JP) subsidiary.
Japan's biggest retailer also consolidated its hold on the island of Shikoku by increasing its stake in Fuji and will now own more than 20% of all retail sales.
Signalling its ambitions to carve out a large share of the discount market, Aeon also acquired the 100 YEN retailer, Can Do Co Ltd (2698 JP).



Aeon Consolidates Through Fuji and Steps up Discounting Via Can Do

<ul>
<li>The Matsumotokiyoshi and Cocokara Fine merger is now complete following almost two years of dealing, planning and company bonding.</li>
<li>The combined business creates the single biggest drugstore group in Japan, although the Tokyo-based partners have lost ground in the past year while others have grown strongly.</li>
<li>As a result, the lead is smaller than they previously expected – and will likely get smaller still. The good news is that profits should soar.</li>
</ul>


The Matsumotokiyoshi and Cocokara Fine merger is now complete following almost two years of dealing, planning and company bonding.
The combined business creates the single biggest drugstore group in Japan, although the Tokyo-based partners have lost ground in the past year while others have grown strongly.
As a result, the lead is smaller than they previously expected – and will likely get smaller still. The good news is that profits should soar.


<p><a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> remains Japan’s largest drugstore group and continues to expand relentlessly. In addition to breaking 2,200 stores, last year it hired a large proportion of all the newly qualified pharmacists in Japan. The cost of this has caused some analysts to worry about short-term profitability, but if it can keep up the pace (and <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a>, its parent, will ensure it does), competitors may find it hard to keep up.</p>

Welcia Holdings (3141 JP) remains Japan’s largest drugstore group and continues to expand relentlessly. In addition to breaking 2,200 stores, last year it hired a large proportion of all the newly qualified pharmacists in Japan. The cost of this has caused some analysts to worry about short-term profitability, but if it can keep up the pace (and Aeon Co Ltd (8267 JP), its parent, will ensure it does), competitors may find it hard to keep up.

Japan

WELCIA HOLDINGS CO.,LTD. is a holding company established through a merger of Welcia Kanto and Takada Pharmacy.  The Group mainly operates drug chain stores which sell medicines, health foods, cosmetics, nursery items and daily necessity goods.

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Welcia Holdings (3141 JP)

JPX-Nikkei 400 2022 Rebal: Final Predictions

I have segmented the JPX Nikkei 400 Potential ADDs and DELs based on conviction levels. The high-conviction ADDs might outperform the high...

Janaghan Jeyakumar, CFA

Welcia's Purchase of Kokumin: Watch Out Matsukiyo Cocokara

Matsukiyo Cocokara may be No. 1 for now in Japan's drugstore sector but Welcia and Tsuruha are not standing still. Welcia's acquisition of Kokumin...

Michael Causton

Aeon Consolidates Through Fuji and Steps up Discounting Via Can Do

Aeon continues to consolidate retail share. Its acquisition of Fuji will give it 20% share of all retail sales in Shikoku while its purchase of Can...

Michael Causton

Matsukiyo Cocokara: Together at Last

MatsukiyoCocokara may top the drugstore ranking post-merger but Welcia and Tsuruha have grown much faster and may take the lead again soon given...

Michael Causton

Welcia: Aeon’s Shining Star

Welcia has retained the top spot in drugstores and, judging by its aggressive hiring of pharmacists is determined to stay there. It is working on...

Michael Causton

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