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

With <a href="https://www.smartkarma.com/entities/yamato-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2:1" rel="noopener">Yamato Holdings (9064 JP)</a> and other major transporters increasing delivery prices over the past two years, <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)'s</a> Japanese subsidiary has built independent delivery systems to avoid relying on the big courier services.Amazon already has nine regional delivery providers in place and is rolling out the Amazon Flex model, allowing individual drivers to become Amazon couriers on their own time.The timing is right given Amazon Japan's continued growth in Japan and, in particular, its leading position in the race to build online food retailing nationally – it recently also tied with Japan's biggest single supermarket chain to make this happen.

With Yamato Holdings (9064 JP) and other major transporters increasing delivery prices over the past two years, Amazon.com Inc (AMZN US)'s Japanese subsidiary has built independent delivery systems to avoid relying on the big courier services.Amazon already has nine regional delivery providers in place and is rolling out the Amazon Flex model, allowing individual drivers to become Amazon couriers on their own time.The timing is right given Amazon Japan's continued growth in Japan and, in particular, its leading position in the race to build online food retailing nationally – it recently also tied with Japan's biggest single supermarket chain to make this happen.

Amazon Japan Takes Control of Deliveries as Expansion Continues

<a href="https://www.smartkarma.com/entities/yamato-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2:1" rel="noopener">Yamato Holdings (9064 JP)</a> has come up with multiple solutions to improve e-commerce fulfilment, from lockers to tie-ups with convenience stores.Its latest idea targets fashion brands with a new service that delivers online orders to clothing alteration stores where customers can try on and even get adjustments done, reducing the cost of shipments and returns.Added value solutions like this help keep Yamato at the forefront of e-commerce fulfilment and allow it to capture more of the fees from online orders than simply shipments while also helping to reduce incidences of returns.

Yamato Holdings (9064 JP) has come up with multiple solutions to improve e-commerce fulfilment, from lockers to tie-ups with convenience stores.Its latest idea targets fashion brands with a new service that delivers online orders to clothing alteration stores where customers can try on and even get adjustments done, reducing the cost of shipments and returns.Added value solutions like this help keep Yamato at the forefront of e-commerce fulfilment and allow it to capture more of the fees from online orders than simply shipments while also helping to reduce incidences of returns.

Yamato Launches Fitting Stations for Apparel E-Commerce

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Quantitative Analysis

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/085/347/original/2019-04-20_09-59-40.png?1555722056" class="editor-image img-responsive" data-smartkarma-image-id="85347"></figure><div class="content-caption">Source: Japan Analytics</div>UnCh - Japanese equities are unchanged in US dollar terms over both three and six months. The Bank of Japan has intervened on 42 of the 121 trading days since October 22nd or an average of 1.6 times a week as foreigners remain underweight. As corporate results and macro data continue to disappoint, the outlook for the market is muted ahead of the upcoming ten-day holiday which combines the traditional Golden Week holidays with the accession of the new Emperor and the beginning of the Reiwa era (令和時代).  <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/085/405/original/2019-04-21_07-28-03.png?1555799330" class="editor-image img-responsive" data-smartkarma-image-id="85405"></figure><div class="content-caption">Source: Investing.com</div>CURRENCY RISK? - "UnCh" also applies to <a href="https://www.smartkarma.com/entities/22826" target="_blank" data-smartkarma-citation="entities:22826:1">JPY (USDJPY CURNCY)</a>  Implied volatility for 9-month USDJPY options reached a new 25-year low last week of 6.11. The previous two lows were in 2006 and 2015 and were followed by periods of sustained Yen strength. The equity market currently appears to be discounting precisely the opposite.   <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/085/350/original/2019-04-20_10-21-58.png?1555723331" class="editor-image img-responsive" data-smartkarma-image-id="85350"></figure><div class="content-caption">Source: Japan Analytics</div>VTR - The ratio of the value of stocks traded to the total market value continues to decline. The average for 2019 is 11% below that for the same period last year and is unchanged at 39bps in each month year-to-date.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/085/381/original/2019-04-20_14-34-11.png?1555738458" class="editor-image img-responsive" data-smartkarma-image-id="85381"></figure><div class="content-caption">Source: Japan Analytics</div>VOLUME SCORE TIMELINE - Volumes have been highest in the Internet, Retail, and Telecoms sectors, while the Materials, Transportation, Utilities and Real Estate Sectors have seen the lowest.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/085/352/original/2019-04-20_10-29-59.png?1555723806" class="editor-image img-responsive" data-smartkarma-image-id="85352"></figure><div class="content-caption">Source: Japan Analytics</div>LOWS &gt; HIGHS - With a deficit of positive news at the individual company level, the number of new 52-week highs has exceeded the number of new 52-week lows on only one-third of the last 31 trading days. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/085/363/original/2019-04-20_12-34-06.png?1555731278" class="editor-image img-responsive" data-smartkarma-image-id="85363"></figure><div class="content-caption">Source: Japan Analytics</div>DRIFTING LOWER - TTM and Forecasts Aggregate Operating and Net Income continue to drift lower ahead of the full-year results for March year-end companies which are due in a more-concentrated-than-usual period either side of the long break.   <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/085/384/original/2019-04-20_17-30-47.png?1555749055" class="editor-image img-responsive" data-smartkarma-image-id="85384"></figure><div class="content-caption">Source: Japan Analytics 
</div>MIND THE GAP - Based on our Scoring methodology for aggregate Results &amp; Revisions, the 'gap' between total market value and earnings momentum is now as wide as at the two previous 'peaks' in January 2018 and September 2018.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/085/435/original/File%202019-04-21%2015%2055%2018.jpeg?1555829876" class="editor-image img-responsive" data-smartkarma-image-id="85435"></figure><div class="content-caption">Source: Bank of America Merrill Lynch</div>GLOBAL WAVE - The market is implying that the earnings cycle is close to a bottom which is in accord with BAML's Global Earnings Revision Ratio having ticked up last month for the first time in 14 months. BAML has yet to call a Trough in their Global Wave and, were they to do so, such a Trough would be the first above '50' since 2006.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/085/378/original/2019-04-20_14-00-43.png?1555736454" class="editor-image img-responsive" data-smartkarma-image-id="85378"></figure>FORECASTS LEADING EARNINGS LOWER - Separating our the Results Score and the Forecast &amp; Revision Score, the latter is continuing to lead the former to the downside, although both Scores are in aggregate still positive. Reported earnings and forecasts are still growing year-on-year; however, the momentum is slowing rapidly.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/085/379/original/2019-04-20_14-04-23.png?1555736670" class="editor-image img-responsive" data-smartkarma-image-id="85379"></figure><div class="content-caption">Source: Japan Analytics</div>INTERIM LEADING ANNUAL LOWER -  Between February and September in each year, there is a statistically significant number of Interim Forecasts that they can be compared to the Annual Forecasts with which they are combined to derive the score in the previous chart. Interim Forecasts are often prepared by the divisional heads are not accorded the same 'reverence' as the Annual Forecasts. As a result, the Interim numbers offer a good leading indicator of short-term trends. In recent weeks, the aggregate Interim Forecast/Revision Score has turned sharply lower and is now at the lowest point in almost two years.   In the DETAIL section below, we will review Sector performance, company results, revisions and stock performance over the previous two weeks, as well as adding some brief comments on <a href="https://www.smartkarma.com/entities/14191" target="_blank" data-smartkarma-citation="entities:14191:1">Koshidaka (2157 JP)</a>, <a href="https://www.smartkarma.com/entities/2765" target="_blank" data-smartkarma-citation="entities:2765:1">Ryohin Keikaku (7453 JP)</a>, Drugstores, <a href="https://www.smartkarma.com/entities/237" target="_blank" data-smartkarma-citation="entities:237:1">Daiwa House (1925 JP)</a>, Toyota Parts companies, and <a href="https://www.smartkarma.com/entities/2" target="_blank" data-smartkarma-citation="entities:2:1">Yamato Holdings (9064 JP)</a>.

Source: Japan AnalyticsUnCh - Japanese equities are unchanged in US dollar terms over both three and six months. The Bank of Japan has intervened on 42 of the 121 trading days since October 22nd or an average of 1.6 times a week as foreigners remain underweight. As corporate results and macro data continue to disappoint, the outlook for the market is muted ahead of the upcoming ten-day holiday which combines the traditional Golden Week holidays with the accession of the new Emperor and the beginning of the Reiwa era (令和時代).  Source: Investing.comCURRENCY RISK? - "UnCh" also applies to JPY (USDJPY CURNCY)  Implied volatility for 9-month USDJPY options reached a new 25-year low last week of 6.11. The previous two lows were in 2006 and 2015 and were followed by periods of sustained Yen strength. The equity market currently appears to be discounting precisely the opposite.   Source: Japan AnalyticsVTR - The ratio of the value of stocks traded to the total market value continues to decline. The average for 2019 is 11% below that for the same period last year and is unchanged at 39bps in each month year-to-date.Source: Japan AnalyticsVOLUME SCORE TIMELINE - Volumes have been highest in the Internet, Retail, and Telecoms sectors, while the Materials, Transportation, Utilities and Real Estate Sectors have seen the lowest.Source: Japan AnalyticsLOWS &gt; HIGHS - With a deficit of positive news at the individual company level, the number of new 52-week highs has exceeded the number of new 52-week lows on only one-third of the last 31 trading days. Source: Japan AnalyticsDRIFTING LOWER - TTM and Forecasts Aggregate Operating and Net Income continue to drift lower ahead of the full-year results for March year-end companies which are due in a more-concentrated-than-usual period either side of the long break.   Source: Japan Analytics 
MIND THE GAP - Based on our Scoring methodology for aggregate Results &amp; Revisions, the 'gap' between total market value and earnings momentum is now as wide as at the two previous 'peaks' in January 2018 and September 2018.Source: Bank of America Merrill LynchGLOBAL WAVE - The market is implying that the earnings cycle is close to a bottom which is in accord with BAML's Global Earnings Revision Ratio having ticked up last month for the first time in 14 months. BAML has yet to call a Trough in their Global Wave and, were they to do so, such a Trough would be the first above '50' since 2006.FORECASTS LEADING EARNINGS LOWER - Separating our the Results Score and the Forecast &amp; Revision Score, the latter is continuing to lead the former to the downside, although both Scores are in aggregate still positive. Reported earnings and forecasts are still growing year-on-year; however, the momentum is slowing rapidly.Source: Japan AnalyticsINTERIM LEADING ANNUAL LOWER -  Between February and September in each year, there is a statistically significant number of Interim Forecasts that they can be compared to the Annual Forecasts with which they are combined to derive the score in the previous chart. Interim Forecasts are often prepared by the divisional heads are not accorded the same 'reverence' as the Annual Forecasts. As a result, the Interim numbers offer a good leading indicator of short-term trends. In recent weeks, the aggregate Interim Forecast/Revision Score has turned sharply lower and is now at the lowest point in almost two years.   In the DETAIL section below, we will review Sector performance, company results, revisions and stock performance over the previous two weeks, as well as adding some brief comments on Koshidaka (2157 JP), Ryohin Keikaku (7453 JP), Drugstores, Daiwa House (1925 JP), Toyota Parts companies, and Yamato Holdings (9064 JP).

🇯🇵 Japan • Fortnightly Update - "UnCh"

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/075/962/original/BANNER-LOGISTICS-FINAL.png?1547911683" class="editor-image img-responsive" data-smartkarma-image-id="75962"></figure>
Tracking Traffic/Chinese Express &amp; Logistics is the hub for our research on China's express parcels and logistics sectors. Tracking Traffic/Chinese Express &amp; Logistics features analysis of monthly Chinese express and logistics data, notes from our conversations with industry players, and links to company and thematic notes. 
This month's issue covers the following topics:
<div>
<ol>
<li>
December express parcel pricing fell by over 9% Y/Y. Average pricing per express parcel fell by 9.1% Y/Y, the worst decline since Q216 (excluding January/February figures distorted by the Lunar New Year holiday). </li>
<li>
Express parcel revenue growth remained well below 20% last month. Weak pricing dragged sector revenue growth down to 17% in December, the 4th consecutive month of sub-20% growth. </li>
<li>
Intra-city pricing (ie, local delivery) was strong in 2018. Relative to weak inter-city pricing (down 3.1% Y/Y in 2018), pricing for intra-city express shipments was firm, rising by 0.1% last year. In fact, average pricing for intra-city express shipments has risen in four of the last five years. </li>
<li>
Underlying domestic transport demand remained firm in December. Although demand for inter-city express shipments appears to be moderating (from high levels), underlying transportation activity in December remained firm. The three modes of freight transport we track (rail, highway, air) in aggregate rose 6.6% Y/Y in December, even as the growth of air freight slowed.  </li>
</ol>
</div>
We retain a negative view of China's express industry's fundamentals: demand growth is slowing and pricing for inter-city shipments appears to be falling faster than costs can be cut, leading to margin compression.


Tracking Traffic/Chinese Express &amp; Logistics is the hub for our research on China's express parcels and logistics sectors. Tracking Traffic/Chinese Express &amp; Logistics features analysis of monthly Chinese express and logistics data, notes from our conversations with industry players, and links to company and thematic notes. 
This month's issue covers the following topics:



December express parcel pricing fell by over 9% Y/Y. Average pricing per express parcel fell by 9.1% Y/Y, the worst decline since Q216 (excluding January/February figures distorted by the Lunar New Year holiday). 

Express parcel revenue growth remained well below 20% last month. Weak pricing dragged sector revenue growth down to 17% in December, the 4th consecutive month of sub-20% growth. 

Intra-city pricing (ie, local delivery) was strong in 2018. Relative to weak inter-city pricing (down 3.1% Y/Y in 2018), pricing for intra-city express shipments was firm, rising by 0.1% last year. In fact, average pricing for intra-city express shipments has risen in four of the last five years. 

Underlying domestic transport demand remained firm in December. Although demand for inter-city express shipments appears to be moderating (from high levels), underlying transportation activity in December remained firm. The three modes of freight transport we track (rail, highway, air) in aggregate rose 6.6% Y/Y in December, even as the growth of air freight slowed.  


We retain a negative view of China's express industry's fundamentals: demand growth is slowing and pricing for inter-city shipments appears to be falling faster than costs can be cut, leading to margin compression. 

TRACKING TRAFFIC/Chinese Express & Logistics: Inter-City Pricing -9.1% | But Freight Activity Stable

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/064/356/original/BANNER-LOGISTICS-FINAL.png?1537355010" class="editor-image img-responsive" data-smartkarma-image-id="64356"></figure>Tracking Traffic/Chinese Express &amp; Logistics is the hub for our research on China's express parcels and logistics sectors. Tracking Traffic/Chinese Express &amp; Logistics features analysis of monthly Chinese express and logistics data, notes from our conversations with industry players, and links to company and thematic notes. All told, this issue of Tracking Traffic/Chinese Express &amp; Logistics includes data from over a dozen distinct sources.This month's issue covers the following topics:<ol>
<li>
Express parcels momentum continued to worsen in August. Express sector revenue growth fell to just 20.9% Y/Y in August. Sector revenue continues to trail the growth of online retail activity in China.  </li>
<li>
For some companies, express parcels pricing declined sharply last month. Overall, average pricing for the express sector declined by 3.8% Y/Y in August, but double-digit declines at two listed express companies suggest weak market conditions for inter-city express shipments last month.</li>
<li>
Underlying transportation demand in China remained solid last month. Rail, highway, and air freight demand expanded by about 6.4% in aggregate in August, a bit better than the 6.2% growth recorded in H118.</li>
<li>
<a href="https://www.smartkarma.com/entities/22799" target="_blank" data-smartkarma-citation="entities:22799:1">China Logistics Property Holdings (1589 HK)</a> remains undervalued. Its narrow focus on modern Chinese warehouse space and strategic a relationship with <a href="https://www.smartkarma.com/entities/446" target="_blank" data-smartkarma-citation="entities:446:1">Jd.Com Inc (Adr) (JD US)</a> make China Logistics Property Holdings our top pick in China's logistics sector. We remain negative on the express sector.</li>
</ol>

Tracking Traffic/Chinese Express &amp; Logistics is the hub for our research on China's express parcels and logistics sectors. Tracking Traffic/Chinese Express &amp; Logistics features analysis of monthly Chinese express and logistics data, notes from our conversations with industry players, and links to company and thematic notes. All told, this issue of Tracking Traffic/Chinese Express &amp; Logistics includes data from over a dozen distinct sources.This month's issue covers the following topics:

Express parcels momentum continued to worsen in August. Express sector revenue growth fell to just 20.9% Y/Y in August. Sector revenue continues to trail the growth of online retail activity in China.  

For some companies, express parcels pricing declined sharply last month. Overall, average pricing for the express sector declined by 3.8% Y/Y in August, but double-digit declines at two listed express companies suggest weak market conditions for inter-city express shipments last month.

Underlying transportation demand in China remained solid last month. Rail, highway, and air freight demand expanded by about 6.4% in aggregate in August, a bit better than the 6.2% growth recorded in H118.

China Logistics Property Holdings (1589 HK) remains undervalued. Its narrow focus on modern Chinese warehouse space and strategic a relationship with Jd.Com Inc (Adr) (JD US) make China Logistics Property Holdings our top pick in China's logistics sector. We remain negative on the express sector.


TRACKING TRAFFIC/Chinese Express & Logistics: Express Momentum Wanes | Pricing Tumbles | Buy CLPH!

Japan

Yamato Holdings Co., Ltd. mainly provides door-to-door parcel delivery services. The Company has developed a nationwide delivery system specializing in time-specified delivery. Yamato Holdings offers moving services and other comprehensive transportation services including logistics services for both domestic and overseas customers as well as financial and autoworks services.

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Yamato Holdings (9064 JP)

Amazon Japan Takes Control of Deliveries as Expansion Continues

With Yamato Holdings (9064 JP) and other major transporters increasing delivery prices over the past two years, Amazon.com Inc (AMZN US)'s Japanese...

Michael Causton

Yamato Launches Fitting Stations for Apparel E-Commerce

Yamato Holdings (9064 JP) has come up with multiple solutions to improve e-commerce fulfilment, from lockers to tie-ups with convenience stores.Its...

Michael Causton

🇯🇵 Japan • Fortnightly Update - "UnCh"

UnCh - Japanese equities are unchanged in US dollar terms over both three and six months. The Bank of Japan has intervened on 42 of the 121 trading...

Campbell Gunn

TRACKING TRAFFIC/Chinese Express & Logistics: Inter-City Pricing -9.1% | But Freight Activity Stable

Tracking Traffic/Chinese Express & Logistics is the hub for our research on China's express parcels and logistics sectors. Tracking...

Daniel Hellberg

TRACKING TRAFFIC/Chinese Express & Logistics: Express Momentum Wanes | Pricing Tumbles | Buy CLPH!

Tracking Traffic/Chinese Express & Logistics is the hub for our research on China's express parcels and logistics sectors. Tracking...

Daniel Hellberg

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