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>
<a href="https://www.smartkarma.com/entities/ryohin-keikaku-co-ltd" target="_blank" data-smartkarma-citation="entities:2765:1" rel="noopener">Ryohin Keikaku (7453 JP)</a> rose 24% following an earnings beat in the previous quarter. However, the share price progression afterwards was less than we anticipated.</li>
<li>Our analysis points to one more big earnings beat as consensus is still conservative on cost assumptions.</li>
<li>We think Ryohin Keikaku could take another big stride towards our target price following 1QFY23 results, due on the first week of January 2023.</li>
</ul>



Ryohin Keikaku (7453 JP) rose 24% following an earnings beat in the previous quarter. However, the share price progression afterwards was less than we anticipated.
Our analysis points to one more big earnings beat as consensus is still conservative on cost assumptions.
We think Ryohin Keikaku could take another big stride towards our target price following 1QFY23 results, due on the first week of January 2023.


Ryohin Keikaku: Beat On The Cards, Big Moves To Follow

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS.  SPX -0.3% and down WoW; Weak Payrolls numbers lead to fall in US 2Yr to 4.95%, USD weakness;  This week - packed schedule with CPI; Watch Bank earnings</li>
<li>JAPAN. NKY Futs flat vs Cash; USDJPY 142.2, on weaker US payrolls;   JP companies struggle to lift ROE due to expanding Equity Base (=more buybacks?); Kishida to reshuffle cabinet</li>
<li>NUGGET. Heat Pumps - A Big Deal for Daikin(6367)/Melco(6503).  A large addressable, and growing market, and great for the environment. Yes, you should get excited!</li>
</ul>


OVERSEAS.  SPX -0.3% and down WoW; Weak Payrolls numbers lead to fall in US 2Yr to 4.95%, USD weakness;  This week - packed schedule with CPI; Watch Bank earnings
JAPAN. NKY Futs flat vs Cash; USDJPY 142.2, on weaker US payrolls;   JP companies struggle to lift ROE due to expanding Equity Base (=more buybacks?); Kishida to reshuffle cabinet
NUGGET. Heat Pumps - A Big Deal for Daikin(6367)/Melco(6503).  A large addressable, and growing market, and great for the environment. Yes, you should get excited!


Ohayo Japan | Weak Payrolls=Lower Rates; Weaker USD; NUGGET:Heat Pumps-The Future of Cooling/Heating

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Nikkei 225 Sep 2023 review has 2 months left of data collection. That means the rankings are quasi-fixed. So then the question is what to do with them.</li>
<li>There is a <a href="https://indexes.nikkei.co.jp/en/nkave/governance" target="_blank" rel="noopener">consultation</a> in progress. You still have one week to respond, but that doesn't change the names. </li>
<li>The top inclusion is the big one in dollar terms but low in liquidity. The next two are likely to be consumer names, and much more impactful. </li>
</ul>


The Nikkei 225 Sep 2023 review has 2 months left of data collection. That means the rankings are quasi-fixed. So then the question is what to do with them.
There is a consultation in progress. You still have one week to respond, but that doesn't change the names. 
The top inclusion is the big one in dollar terms but low in liquidity. The next two are likely to be consumer names, and much more impactful. 


Nikkei 225 Sep 2023 Review - Still Fastie, Nitori, Zozo, and Lasertec as Interesting Names

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>The 100 Yen shop model looked in danger when inflation began to bite and labour costs surged but the sector continues to expand</li>
<li>Their fixed price model meant there was little leeway to offset higher costs through higher prices but a survey shows 90% of respondents visited a Daiso store recently.</li>
<li>While Daiso has adapted quickly and looks to have a bright future, <a href="https://www.smartkarma.com/entities/seria-co-ltd" target="_blank" data-smartkarma-citation="entities:12989:1" rel="noopener">Seria Co Ltd (2782 JP)</a> refuses to adapt and has seen profits plummet.</li>
</ul>


The 100 Yen shop model looked in danger when inflation began to bite and labour costs surged but the sector continues to expand
Their fixed price model meant there was little leeway to offset higher costs through higher prices but a survey shows 90% of respondents visited a Daiso store recently.
While Daiso has adapted quickly and looks to have a bright future, Seria Co Ltd (2782 JP) refuses to adapt and has seen profits plummet.


100 Yen Shops to Hit ¥1 Trillion This Year but Seria's Model Squeezing Profits

<ul>
<li>In May 2022, <a href="https://www.smartkarma.com/entities/yamada-denki-co-ltd" target="_blank" data-smartkarma-citation="entities:641:1" rel="noopener">Yamada Denki (9831 JP)</a> announced a very large buyback. GINORMOUS - in fact - at 23.9% of shares out ex-Treasury if maximum shares were bought.</li>
<li>So far, YDH is 83.5% through, and at the recent pace, they will end it 8 May having bought 183-184mm shares (21.9% of TSO) spending 86.6% of funds allocated.</li>
<li>That's why the announcement lowering the March 2023 div to ¥12/share vs ¥18/share last year was just weird. And bodes badly. We need a lightbulb moment for a lightbulb dilemma.</li>
</ul>


In May 2022, Yamada Denki (9831 JP) announced a very large buyback. GINORMOUS - in fact - at 23.9% of shares out ex-Treasury if maximum shares were bought.
So far, YDH is 83.5% through, and at the recent pace, they will end it 8 May having bought 183-184mm shares (21.9% of TSO) spending 86.6% of funds allocated.
That's why the announcement lowering the March 2023 div to ¥12/share vs ¥18/share last year was just weird. And bodes badly. We need a lightbulb moment for a lightbulb dilemma.


Yamada Denki (9831) Buyback Almost Done and Odd Dividend "Cut", and a Lightbulb Dilemma

Japan

RYOHIN KEIKAKU CO., LTD. is a retailer and wholesaler of Mujirushi Ryohin brand products, which were originally a generic private-brand product.  The Company's product line includes knitwear, food, and household items

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Ryohin Keikaku (7453 JP)

Ryohin Keikaku: Beat On The Cards, Big Moves To Follow

Although Q1 was less than impressive, we maintained our view that a big beat was on the horizon. Although a bit late, our analysis if finally...

Oshadhi Kumarasiri

Ohayo Japan | Weak Payrolls=Lower Rates; Weaker USD; NUGGET:Heat Pumps-The Future of Cooling/Heating

Weaker Payrolls drive rates down - a bit; Weaker USD; NKY Futs flat vs Cash; USDJPY 142.2; JP companies struggle to lift ROE due to expanding...

Mark Chadwick

Nikkei 225 Sep 2023 Review - Still Fastie, Nitori, Zozo, and Lasertec as Interesting Names

The Nikkei 225 September 2023 review has two months left in the data set before it is set. It will be tough to change rankings now near the top....

Travis Lundy

100 Yen Shops to Hit ¥1 Trillion This Year but Seria's Model Squeezing Profits

Seria has always extracted the highest profits from the 100 Yen sector even as its larger competitor, Daiso, grew faster. Now, with labour and...

Michael Causton

Yamada Denki (9831) Buyback Almost Done and Odd Dividend "Cut", and a Lightbulb Dilemma

Yamada Denki/Holdings is cheap. It is 8x earnings and 0.55x book. And that is AFTER a GINORMOUS buyback which has been disappointing. Now the...

Travis Lundy

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