Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS. SPX rises as investors see end of Fed rate hike cycle; Investors continue to doubt the US bull market; China steps in again to support Real Estate market </li>
<li>JAPAN. NKY Futs +0.4% vs Cash; USJPY 141.3; "New" NISA eligible funds expand;  JP investors buy record foreign bonds in H1;  ON THE STREET:Mit Motors to BUY; Toyota to Neutral</li>
<li>NUGGET. Push for more women on boards continue in Japan - still lagging, but trend is up. Will it play out in valuations? Global Evidence Supportive.</li>
</ul>


OVERSEAS. SPX rises as investors see end of Fed rate hike cycle; Investors continue to doubt the US bull market; China steps in again to support Real Estate market 
JAPAN. NKY Futs +0.4% vs Cash; USJPY 141.3; "New" NISA eligible funds expand;  JP investors buy record foreign bonds in H1;  ON THE STREET:Mit Motors to BUY; Toyota to Neutral
NUGGET. Push for more women on boards continue in Japan - still lagging, but trend is up. Will it play out in valuations? Global Evidence Supportive.


Ohayo Japan| Fed Rate Hike End in Sight; NUGGET: More Women on Boards = Higher Valuations?

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>Japan's inflation hit a 41-year high at 4.3% in January, but gradually slowed down in the following months, reaching 3.3%, 3.2%, and 3.5% in February, March, and April 2023, respectively.</li>
<li>Although Fuel, Electricity, and Water prices declined, other items excluding fresh vegetables, maintained inflation at a similar pace, suggesting that cost-push inflation continues to impact the overall economic environment.</li>
<li>This insight examines the recent quarterly performance of Yakult, Nissin, and Seven &amp; I, our top picks in the Japan Consumer Staples Sector <a href="https://www.smartkarma.com/insights/japan-consumer-staples-sector-inflation-looks-a-blessing-in-disguise-for-those-with-pricing-power" target="_blank" rel="noopener">Smartkarma Original</a>.</li>
</ul>


Japan's inflation hit a 41-year high at 4.3% in January, but gradually slowed down in the following months, reaching 3.3%, 3.2%, and 3.5% in February, March, and April 2023, respectively.
Although Fuel, Electricity, and Water prices declined, other items excluding fresh vegetables, maintained inflation at a similar pace, suggesting that cost-push inflation continues to impact the overall economic environment.
This insight examines the recent quarterly performance of Yakult, Nissin, and Seven &amp; I, our top picks in the Japan Consumer Staples Sector Smartkarma Original.


Japan Consumer Staples Update: Inflation Looks a Blessing in Disguise for Those with Pricing Power

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. 

<ul>
<li>Some Japanese department stores enjoyed record sales in FY2022 but the gap in performance accelerated between city centre stores and the rest. </li>
<li>While numerous regional properties continue to struggle, the best exemplars of urban department store retailing are flourishing as they become true luxury emporiums for the wealthy.</li>
<li>Department stores have rarely provided growth in either sales or OP but there is now a chance that the better chains will emerge as quite profitable entities.</li>
</ul>


Some Japanese department stores enjoyed record sales in FY2022 but the gap in performance accelerated between city centre stores and the rest. 
While numerous regional properties continue to struggle, the best exemplars of urban department store retailing are flourishing as they become true luxury emporiums for the wealthy.
Department stores have rarely provided growth in either sales or OP but there is now a chance that the better chains will emerge as quite profitable entities.


The Great Divide: Isetan and Hankyu Break Records as Regional Department Stores Close

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
Australian tax-loss selling is a thing. Retail investors will take gains on things that run up in price, or get taken over, then look for losses.</li>
<li>The <a href="https://www.smartkarma.com/entities/china-conch-venture-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19943:1" rel="noopener">China Conch Venture Holdings (586 HK)</a> / <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd-094855ab-abec-4b71-956b-5bfc85e22fdd" target="_blank" data-smartkarma-citation="entities:389:1" rel="noopener">Anhui Conch Cement (600585 CH)</a> ratio is at an all-time low. The implied stub is re-testing its all-time low.</li>
<li>Historically, <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon (7751 JP)</a>'s buybacks are aggressive. It may pay to observe market data to see when they are done. It may also pay to look at peer outperformance cycles. </li>
</ul>



Australian tax-loss selling is a thing. Retail investors will take gains on things that run up in price, or get taken over, then look for losses.
The China Conch Venture Holdings (586 HK) / Anhui Conch Cement (600585 CH) ratio is at an all-time low. The implied stub is re-testing its all-time low.
Historically, Canon (7751 JP)'s buybacks are aggressive. It may pay to observe market data to see when they are done. It may also pay to look at peer outperformance cycles. 


Last Week in Event SPACE:Tax-Loss Selling In Australia, China Conch/Anhui Conch, Canon, Rakuten

<ul>
<li>Last week, shareholders of <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> rejected all four of the board nominees proposed by ValueAct.</li>
<li>ValueAct, seeing their higher vote count as a modest success, sent a letter to Seven &amp; I, requesting a resumption of discussions despite the failed attempt to remove senior leadership.</li>
<li>We think the company is unlikely to seriously consider Value Act's proposals any longer, indicating the end of the investor activism campaign.</li>
</ul>


Last week, shareholders of Seven &amp; I Holdings (3382 JP) rejected all four of the board nominees proposed by ValueAct.
ValueAct, seeing their higher vote count as a modest success, sent a letter to Seven &amp; I, requesting a resumption of discussions despite the failed attempt to remove senior leadership.
We think the company is unlikely to seriously consider Value Act's proposals any longer, indicating the end of the investor activism campaign.


Seven & I: ValueAct's Proposals Unlikely to Be Considered, Investor Activism Effectively Over

Japan

Seven & i Holdings Co., Ltd. is a holding company which was established through the merger of Ito-Yokado Co., Seven Eleven Japan Co., and Denny's Japan. The Company plans, manages, and operates mainly convenience stores, supermarkets, and department stores.

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Seven & I Holdings (3382 JP)

Ohayo Japan| Fed Rate Hike End in Sight; NUGGET: More Women on Boards = Higher Valuations?

SPX gains as end of Fed hike cycle in sight; NKY Futs +0.4% vs Cash; USJPY 141.3; "New" NISA eligible funds expand; JP investors buy record...

Mark Chadwick

Japan Consumer Staples Update: Inflation Looks a Blessing in Disguise for Those with Pricing Power

The prevailing inflationary environment presents an opportunity for specific Japanese Food and Beverages companies that have consistently achieved...

Oshadhi Kumarasiri

The Great Divide: Isetan and Hankyu Break Records as Regional Department Stores Close

Japan's department stores have rarely provided good returns due to anaemic profit margins. This is changing with Japan's best chains and stores now...

Michael Causton

Last Week in Event SPACE:Tax-Loss Selling In Australia, China Conch/Anhui Conch, Canon, Rakuten

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Seven & I: ValueAct's Proposals Unlikely to Be Considered, Investor Activism Effectively Over

ValueAct, despite failed leadership removal attempt, requests discussions, but Seven & I is unlikely to consider proposals further, suggesting the...

Oshadhi Kumarasiri

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