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.

Equity Bottom-Up

<ul>
<li>We were lucky with our call on <a href="https://www.smartkarma.com/entities/yamada-denki-co-ltd" target="_blank" data-smartkarma-citation="entities:641:1" rel="noopener">Yamada Denki (9831 JP)</a> earlier this year as the stock outperformed Topix by around 30% in the first 9 months of 2022.</li>
<li>We were expecting to make more than 70%, but revenues have fallen short of our expectations.</li>
<li>With demand falling more than expected after a short boost during COVID through telework and online classes, we would look to cash in the gains before the 2QFY23 earnings release.</li>
</ul>


We were lucky with our call on Yamada Denki (9831 JP) earlier this year as the stock outperformed Topix by around 30% in the first 9 months of 2022.
We were expecting to make more than 70%, but revenues have fallen short of our expectations.
With demand falling more than expected after a short boost during COVID through telework and online classes, we would look to cash in the gains before the 2QFY23 earnings release.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In early May 2022, <a href="https://www.smartkarma.com/entities/yamada-denki-co-ltd" target="_blank" data-smartkarma-citation="entities:641:1" rel="noopener">Yamada Denki (9831 JP)</a> launched a GINORMOUS buyback program. I <a href="https://www.smartkarma.com/insights/yamada-denki-ginormous-buyback-to-dramatically-boost-eps-and-roe" target="_blank" rel="noopener">wrote</a> about it suggesting the company meant business. The stock popped outright and vs Peers.</li>
<li>Then it fell back, and has only recently started moving back up. Surprising given buyback dynamics but it may have been overhang. If so, that overhang should be gone now.</li>
<li>And the stock is cheap, a chunk of the register is sticky, so this could get squeezier now.</li>
</ul>


In early May 2022, Yamada Denki (9831 JP) launched a GINORMOUS buyback program. I wrote about it suggesting the company meant business. The stock popped outright and vs Peers.
Then it fell back, and has only recently started moving back up. Surprising given buyback dynamics but it may have been overhang. If so, that overhang should be gone now.
And the stock is cheap, a chunk of the register is sticky, so this could get squeezier now.


Yamada Denki (9831) Buyback Progress Strong But Big Impact To Come

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. 

Thematic (Sector/Industry)

<ul>
<li>The following is an in-depth review of the Japanese retail sector in 2021-22 and is designed to provide a complete overview for any investor in Japanese retail/consumer markets.</li>
<li>FY2021-22 proved a rebound year for retailers at the sector level. But on a company by company basis, there has been radical divergence between the best and the rest. </li>
<li>We look at the reasons for this divergence and the implications for Japanese retail and consumer firms in the years ahead.</li>
</ul>


The following is an in-depth review of the Japanese retail sector in 2021-22 and is designed to provide a complete overview for any investor in Japanese retail/consumer markets.
FY2021-22 proved a rebound year for retailers at the sector level. But on a company by company basis, there has been radical divergence between the best and the rest. 
We look at the reasons for this divergence and the implications for Japanese retail and consumer firms in the years ahead.


Japanese Retailing 2021-22: What's Really Going on and What's Next?

<ul>
<li>Results for FY2022-23 provide a snapshot of winners and losers in Japan's retail sector.</li>
<li>The data shows a big improvement in performance for retailers with sales of ¥250 billion or more and the outlook is positive for most, particularly for profits.</li>
<li>This also means that market concentration is intensifying, particularly in sectors like drugstores but also now in supermarkets. We highlight the winners in each sector.</li>
</ul>


Results for FY2022-23 provide a snapshot of winners and losers in Japan's retail sector.
The data shows a big improvement in performance for retailers with sales of ¥250 billion or more and the outlook is positive for most, particularly for profits.
This also means that market concentration is intensifying, particularly in sectors like drugstores but also now in supermarkets. We highlight the winners in each sector.


<ul>
<li>The Nikkei Index Team has suggested a methodology change to the Nikkei 225 Average.</li>
<li>It involves capping stocks, creating a method for re-weighting once capped then stocks fall, and they recommend changing to a semi-annual Periodic Review - twice a year rather than once.</li>
<li>More interestingly, they also change the "High Liquidity" definition to be related to traded value not volume, which starts to favour higher-market cap stocks with more shares out.</li>
</ul>


The Nikkei Index Team has suggested a methodology change to the Nikkei 225 Average.
It involves capping stocks, creating a method for re-weighting once capped then stocks fall, and they recommend changing to a semi-annual Periodic Review - twice a year rather than once.
More interestingly, they also change the "High Liquidity" definition to be related to traded value not volume, which starts to favour higher-market cap stocks with more shares out.


Nikkei 225 Methodology Change. Again. This Time Better But Still Not Good Enough

Japan

YAMADA DENKI CO., LTD. operates consumer electronic mass sales stores throughout Japan.  The Company sells home appliances, audio & visual systems, office automation equipment, telecommunication equipment, software, and computers. The Company also provides repair services for its merchandises.

Yamada Denki (9831 JP)

Yamada Holdings: Time to Lock In Profits

Even though we got our revenue expectations wrong and profit margins were disappointing as expected, our valuation idea played out with a return of...

Oshadhi Kumarasiri

Yamada Denki (9831) Buyback Progress Strong But Big Impact To Come

Yamada Denki has bought back 8.3% of shares out ex-Treasury in 4mos, and after the Day1 pop, it hasn't outperformed peers. It's cheap, the buyback...

Travis Lundy

Japanese Retailing 2021-22: What's Really Going on and What's Next?

There is increasing divergence between the winners and losers in Japanese retailing and the following in-depth review looks at performance in the...

Michael Causton

Japan's Best Performing Retailers

There were strong improvements in both sales and profits for leading retailers last year and the following insight looks at the main winners and...

Michael Causton

Nikkei 225 Methodology Change. Again. This Time Better But Still Not Good Enough

The Nikkei proposes changes to the Nikkei 225 methodology. There is a cap, a cap re-mark, and a move to twice-annual reviews. And there is also a...

Travis Lundy