Daily BriefsJapan

Japan: Shinsei Bank, Nintendo Co Ltd, Toshiba Corp, Safie, Fast Retailing, ZOZO Inc and more

In today’s briefing:

  • Shinsei Drops Opposition to SBI TOB; A Fascinating Post-Tender Game of 🐔
  • Nintendo – Time to Start Buying Again if You Are a Long-Term Investor
  • Toshiba – 3D’s Letter Suggests a Lack of Ideas
  • Safie – Overreaction to Specific Distributor Issue
  • China’s Boycott of Western Brands Could Extend to Japanese Brands Amidst Xinjiang Cotton Controversy
  • Zozo Gets Physical: Launches OMO Platform, Opens First Pop-Up Store

Shinsei Drops Opposition to SBI TOB; A Fascinating Post-Tender Game of 🐔

By Travis Lundy

  • On 24 November, Shinsei Bank (8303 JP) cancelled the Poison Pill EGM scheduled for 25 November, and changed its SBI TOB Opinion to Neutral. SBI has agreed to respect Shinsei…
  • …management policy & business strategy as per 12 November DICJ letter, and effect stable transition of management. That it is a partial TOB at a too low price, so…
  • …Shinsei will not support. BUT… the BIGGEST problem comes next. And it is a doozy. There are post-tender complications which require contortions to resolve. 

Nintendo – Time to Start Buying Again if You Are a Long-Term Investor

By Mio Kato

  • We have been skittish to turn genuinely bullish on Nintendo since early July. 
  • While we have called the stock oversold several times since then we did not feel it was ready to really begin a strong rally. 
  • We are still not certain it is, but valuations are cheap enough that we are more focused on what could be a spectacular pipeline for 2022 than on downside risks.

Toshiba – 3D’s Letter Suggests a Lack of Ideas

By Mio Kato

  • Today 3D Investment Partners addressed Toshiba’s spinoff plan in a letter addressed to the Strategic Review Committee. 
  • Unsurprisingly, they were dissatisfied with the results of the strategic review. 
  • Also unsurprisingly they offered no great alternatives pointing to continued meandering.

Safie – Overreaction to Specific Distributor Issue

By Mio Kato

  • Safie has fallen almost 20% since announcing results despite revising up revenue guidance by 3.8%. 
  • This is due to revelations that a lone distribution partner had been heavily incentivising the sale of its cameras and return rates had been climbing. 
  • While this does cast a shadow on previous growth trends a careful analysis suggests that it is not a grave concern.

China’s Boycott of Western Brands Could Extend to Japanese Brands Amidst Xinjiang Cotton Controversy

By Oshadhi Kumarasiri

  • A host of Japanese apparel brands are starting to reject cotton produced in the Xinjiang region.
  • Even though Fast Retailing is unlikely to stake a strong stand against the Xinjiang cotton controversy, actions by other Japanese brands could still affect Uniqlo in the Chinese market.
  • The Uniqlo brand resonates with Japan and a boycott of Japanese brands in China could have severe consequences to Uniqlo’s Chinese business.

Zozo Gets Physical: Launches OMO Platform, Opens First Pop-Up Store

By Michael Causton

  • Zozo opens its first popup physical store and starts a new platform service to make it easy for retailers’ shop staff to sell and communicate with Zozo customers.
  • Other big platforms are following suit, including arch rival Rakuten as the online fashion space sees intensifying competition and platforms seek to tie merchants closer to them.
  • Zozo is also launching a new measuring service shortly, this time for hands, tying with Bulgari no less, demonstrating again its ability to bind consumers and merchants to the platform.

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