'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Thematic (Sector/Industry)

• LARGER CAP RESULTS - 8th APRIL •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/593/original/image_50653961221617916076677.png?1617916077" class="editor-image img-responsive" data-smartkarma-image-id="199593"></figure><div class="content-caption"> Source for all charts &amp; tables: Japan Analytics </div>RESULTS - 48% of Thursday's 29 results announcements scored positively; however, of the largest caps, only <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> and <a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift (3697 JP)</a> had that distinction. <a href="https://www.smartkarma.com/entities/aeon-mall-co-ltd" target="_blank" data-smartkarma-citation="entities:5262:1" rel="noopener">AEON Mall (8905 JP)</a> and <a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson Inc (2651 JP)</a>, both of which had revised down in the recent weeks, anchored the bottom of the table.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/595/original/image_25682293741617916377763.png?1617916379" class="editor-image img-responsive" data-smartkarma-image-id="199595"></figure>• FORECASTS/REVISIONS - 8th APRIL •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/596/original/image_76440807551617916411847.png?1617916413" class="editor-image img-responsive" data-smartkarma-image-id="199596"></figure>FORECASTS/REVISIONS - Conversely, 81% of annual forecasts were positive, with Aeon Mall and Lawson particularly optimistic about FY22. Fast Retailing, which only has six months left to forecast, was more circumspect. For the second year in a row, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I (3382 JP)</a> did not make an initial forecast with the full-year results. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/597/original/image_28112384961617916762514.png?1617916763" class="editor-image img-responsive" data-smartkarma-image-id="199597"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/598/original/image_37677060271617916798074.png?1617916799" class="editor-image img-responsive" data-smartkarma-image-id="199598"></figure>

• LARGER CAP RESULTS - 8th APRIL • Source for all charts &amp; tables: Japan Analytics RESULTS - 48% of Thursday's 29 results announcements scored positively; however, of the largest caps, only Fast Retailing (9983 JP) and Shift (3697 JP) had that distinction. AEON Mall (8905 JP) and Lawson Inc (2651 JP), both of which had revised down in the recent weeks, anchored the bottom of the table.• FORECASTS/REVISIONS - 8th APRIL •FORECASTS/REVISIONS - Conversely, 81% of annual forecasts were positive, with Aeon Mall and Lawson particularly optimistic about FY22. Fast Retailing, which only has six months left to forecast, was more circumspect. For the second year in a row, Seven &amp; I (3382 JP) did not make an initial forecast with the full-year results. 

🇯🇵 JAPAN • Results & Revisions 04/​​​​08 - 7&I Fast Re and Hisamitsu Dreams

• RESULTS - 6th APRIL •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/143/original/image_48903433121617743112480.png?1617743113" class="editor-image img-responsive" data-smartkarma-image-id="199143"></figure><div class="content-caption"> Source for all charts &amp; tables: Japan Analytics</div>RESULTS - A weak fourth quarter and cautious interim forecast from drugstore <a href="https://www.smartkarma.com/entities/sugi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:9255:1" rel="noopener">Sugi (7649 JP)</a> should cap its recent three-month 29% rally. Meanwhile, <a href="https://www.smartkarma.com/entities/san-a-co-ltd" target="_blank" data-smartkarma-citation="entities:20755:1" rel="noopener">San-A (2659 JP)</a> continues to see margin compression but expects a reversal in the new fiscal year. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/144/original/image_43671087431617743435802.png?1617743436" class="editor-image img-responsive" data-smartkarma-image-id="199144"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/145/original/image_77617965041617743669042.png?1617743669" class="editor-image img-responsive" data-smartkarma-image-id="199145"></figure>• FORECASTS/REVISIONS - 5th APRIL •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/146/original/image_76585369451617743732286.png?1617743732" class="editor-image img-responsive" data-smartkarma-image-id="199146"></figure>FORECASTS/REVISIONS - <a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson (2651 JP)</a>  revises up but to below TTM, while <a href="https://www.smartkarma.com/entities/takashimaya-co-ltd" target="_blank" data-smartkarma-citation="entities:370:1" rel="noopener">Takashimaya (8233 JP)</a> expects to finish the year with a ¥34 billion net loss.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/147/original/image_68585463461617743969672.png?1617743970" class="editor-image img-responsive" data-smartkarma-image-id="199147"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/149/original/image_25082609781617744023412.png?1617744024" class="editor-image img-responsive" data-smartkarma-image-id="199149"></figure>

• RESULTS - 6th APRIL • Source for all charts &amp; tables: Japan AnalyticsRESULTS - A weak fourth quarter and cautious interim forecast from drugstore Sugi (7649 JP) should cap its recent three-month 29% rally. Meanwhile, San-A (2659 JP) continues to see margin compression but expects a reversal in the new fiscal year. • FORECASTS/REVISIONS - 5th APRIL •FORECASTS/REVISIONS - Lawson (2651 JP)  revises up but to below TTM, while Takashimaya (8233 JP) expects to finish the year with a ¥34 billion net loss.

🇯🇵 JAPAN • Results & Revisions 04/​​06  -Sugi, San-A & Lawson

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. 

Event-Driven

After more than a year of negotiations and preparation, <a href="https://www.smartkarma.com/entities/matsumotokiyoshi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2259:1" rel="noopener">Matsumotokiyoshi Holdings Co., Ltd. (3088 JP)</a> and <a href="https://www.smartkarma.com/entities/cocokara-fine-inc" target="_blank" data-smartkarma-citation="entities:15447:1" rel="noopener">Cocokara Fine (3098 JP)</a> finally confirmed their agreement to merge in October this year. The new company will be by far the largest in the drugstore sector.A lot of work has been done already to consolidate operations and the aim is to complete integration by 2023. The combined company will target sales of ¥1.5 trillion by 2026.Private brands will be a crucial competitive weapon for the merged chain and also provide opportunities to offer wholesale toiletries and cosmetics floors at supermarkets.The growing competitiveness in the sector amidst increased saturation demands greater scale and will spur the leading players like <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> and <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> to make further acquisitions to catch up with the new leader.

After more than a year of negotiations and preparation, Matsumotokiyoshi Holdings Co., Ltd. (3088 JP) and Cocokara Fine (3098 JP) finally confirmed their agreement to merge in October this year. The new company will be by far the largest in the drugstore sector.A lot of work has been done already to consolidate operations and the aim is to complete integration by 2023. The combined company will target sales of ¥1.5 trillion by 2026.Private brands will be a crucial competitive weapon for the merged chain and also provide opportunities to offer wholesale toiletries and cosmetics floors at supermarkets.The growing competitiveness in the sector amidst increased saturation demands greater scale and will spur the leading players like Welcia Holdings (3141 JP) and Tsuruha Holdings (3391 JP) to make further acquisitions to catch up with the new leader. 

Matsukiyo-Cocokara Merger Heralds New Era for Drugstores

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Equity Bottom-Up

Our 2021 High Conviction call, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> has climbed 26.5%, compared to the Topix index growth of 11.6% and <a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson Inc (2651 JP)</a>’s 8.4%, since we published our 2021 high conviction call, <a href="https://www.smartkarma.com/insights/2021-high-conviction-seven-i-holdings-the-march-for-america" target="_blank" rel="noopener">2021 High Conviction - Seven &amp; I Holdings: The March for America</a> on 26th November 2020.Even though we published our 2021 high conviction call as a part of the annual Smartkarma conviction call initiative in November 2020, we first made this call on 3rd August 2020, when Seven &amp; I’s share price fell to a 7-year low of ¥3,052 per share following the Speedway Acquisition. <a href="https://www.smartkarma.com/insights/seven-i-acquires-speedway-for-21-billion-expensive-but-necessary-acquisition" target="_blank" rel="noopener">Seven &amp; I Acquires Speedway for $21 Billion: Expensive but Necessary Acquisition</a>Since then, Seven &amp; I shares rose 44.7% compared to the Topix index growth of 21.2%.Even though it appears that the short-term mispricing is mostly corrected, we believe there is more upside potential through correction of consensus earnings estimates, consolidation of the US convenience store market and from synergies through the Speedway Acquisition.As Seven &amp; I prepares to release 4QFY21 results on 8th April 2021, we update our high conviction call and discuss what could be a good entry points to prospective Seven &amp; I investors.

Our 2021 High Conviction call, Seven &amp; I Holdings (3382 JP) has climbed 26.5%, compared to the Topix index growth of 11.6% and Lawson Inc (2651 JP)’s 8.4%, since we published our 2021 high conviction call, 2021 High Conviction - Seven &amp; I Holdings: The March for America on 26th November 2020.Even though we published our 2021 high conviction call as a part of the annual Smartkarma conviction call initiative in November 2020, we first made this call on 3rd August 2020, when Seven &amp; I’s share price fell to a 7-year low of ¥3,052 per share following the Speedway Acquisition. Seven &amp; I Acquires Speedway for $21 Billion: Expensive but Necessary AcquisitionSince then, Seven &amp; I shares rose 44.7% compared to the Topix index growth of 21.2%.Even though it appears that the short-term mispricing is mostly corrected, we believe there is more upside potential through correction of consensus earnings estimates, consolidation of the US convenience store market and from synergies through the Speedway Acquisition.As Seven &amp; I prepares to release 4QFY21 results on 8th April 2021, we update our high conviction call and discuss what could be a good entry points to prospective Seven &amp; I investors.

2021 High Conviction Update: 34% More Upside Short-Term Is Not Impossible

The following is a review of how physical retailers are progressing online and includes a unique ranking of the TOP 50 Online Retailers by sales, platforms sold on and growth.
Japanese retailers were famously behind peers in other markets to tackle e-commerce but many have caught up and become world class such as <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> and <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP). </a>
More worrying for those lagging behind such as <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, estimates suggest that online will have some role in 50% of purchasing transactions by 2025.
Despite retailers' efforts, the big three online malls, Amazon, Rakuten and Yahoo! Shopping still control half of the e-commerce market for merchandise.

The following is a review of how physical retailers are progressing online and includes a unique ranking of the TOP 50 Online Retailers by sales, platforms sold on and growth.
Japanese retailers were famously behind peers in other markets to tackle e-commerce but many have caught up and become world class such as Fast Retailing (9983 JP) and Nitori Holdings (9843 JP). 
More worrying for those lagging behind such as Seven &amp; I Holdings (3382 JP), estimates suggest that online will have some role in 50% of purchasing transactions by 2025.
Despite retailers' efforts, the big three online malls, Amazon, Rakuten and Yahoo! Shopping still control half of the e-commerce market for merchandise.

Tip of the Iceberg: Omnichannel 50% of Japan Retail in 2025

Japan

LAWSON, INC. operates a chain of convenience stores in Japan. The Company sells a variety of products including fast food, beverages, snacks, magazines, newspapers, and sundry goods.

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Lawson Inc (2651 JP)

🇯🇵 JAPAN • Results & Revisions 04/08 - 7&I Fast Re and Hisamitsu Dreams

RESULTS - 48% of Thursday's 29 results announcements scored positively; however, of the largest caps, only Fast Retailing (9983 JP) and Shift (3697...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 04/06 -Sugi, San-A & Lawson

RESULTS - A weak fourth quarter and cautious interim forecast from drugstore Sugi (7649 JP) should cap its recent three-month 29% rally.

Campbell Gunn

Matsukiyo-Cocokara Merger Heralds New Era for Drugstores

The merger of Matsukiyo and Cocokara will force further consolidation through M&A in the drugstore sector as regional powerhouses begin to clash as...

Michael Causton

2021 High Conviction Update: 34% More Upside Short-Term Is Not Impossible

Even though it appears that the short-term mispricing is mostly corrected after a 44% increase in the share price, we believe there is more upside...

Oshadhi Kumarasiri

Tip of the Iceberg: Omnichannel 50% of Japan Retail in 2025

We have compiled a unique ranking of the top 50 E-commerce retailers in Japan and provide an analysis of winners and losers among retailers now and...

Michael Causton

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52-week Range

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🇯🇵 JAPAN • Results & Revisions 04/​​​​08 - 7&I Fast Re and Hisamitsu Dreams

RESULTS - 48% of Thursday's 29 results announcements scored positively; however, of the largest caps, only Fast Retailing (9983 JP) and Shift (3697...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 04/​​06 -Sugi, San-A & Lawson

RESULTS - A weak fourth quarter and cautious interim forecast from drugstore Sugi (7649 JP) should cap its recent three-month 29% rally.

Campbell Gunn

Matsukiyo-Cocokara Merger Heralds New Era for Drugstores

The merger of Matsukiyo and Cocokara will force further consolidation through M&A in the drugstore sector as regional powerhouses begin to clash as...

Michael Causton

2021 High Conviction Update: 34% More Upside Short-Term Is Not Impossible

Even though it appears that the short-term mispricing is mostly corrected after a 44% increase in the share price, we believe there is more upside...

Oshadhi Kumarasiri

Tip of the Iceberg: Omnichannel 50% of Japan Retail in 2025

We have compiled a unique ranking of the top 50 E-commerce retailers in Japan and provide an analysis of winners and losers among retailers now and...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 04/08 - 7&I Fast Re and Hisamitsu Dreams

🇯🇵 JAPAN • Results & Revisions 04/06 -Sugi, San-A & Lawson