In today’s briefing:
- Skymark – Pure Play on Budget Tourism
- Rakuten Bank – Point Ecosystem Beneficiary
- USJ – Beneficiary of Reopening and Growing Popularity of Anime and Gaming
- Fanuc (6954 JP) | Beware of the Cycle
Skymark – Pure Play on Budget Tourism
- While current conditions are likely to be tough for budget airline Skymark it will be a key beneficiary of reopening.
- Without significant exposure to international business travel the airline could find favour with investors as a pure play on the reopening theme.
- In addition, a weak yen could prove a tailwind for domestic companies looking to boost inbound tourism and Skymark could be a beneficiary here as well.
Rakuten Bank – Point Ecosystem Beneficiary
- Rakuten Bank has grown rapidly to become Japan’s largest online bank with a relatively young demographic focused on city centres, particularly Tokyo.
- The COVID pandemic and government initiatives to accelerate Japan’s transition towards a more cashless society have helped drive growth.
- However, the key long-term advantage remains its prominent position within the exceptionally strong Rakuten points ecosystem.
USJ – Beneficiary of Reopening and Growing Popularity of Anime and Gaming
- Universal Studios Japan has suffered significantly from the COVID pandemic just as Oriental Land has.
- However, as Japan reopens the company should benefit from a resurgence in tourist arrivals.
- In addition, it could emerge as a key play on expanding the popularity of Japanese IP overseas.
Fanuc (6954 JP) | Beware of the Cycle
- Fanuc’s share price is geared into the machine tool cycle. Unfortunately the cycle is rolling over
- Fanuc is also facing extreme margin pressure from rising parts and logistics costs
- We expect the share price to trade down 20% from here and bottom at around 2x book value
Before it’s here, it’s on Smartkarma
