Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Global equites (MSCI ACWI) have pulled back some following the FOMC's hawkish-leaning announcement. Short-term support is at $102 on ACWI-US--last week's breakout level-- while longer-term support remains at $98-$99.</li>
<li>A break below $102 would indicate more consolidation is likely but, if ACWI-US remains above $98, we remain bullish on global equities, and we view pullbacks as buying opportunities.</li>
<li>Europe remains bullish, and we remain overweight Japan and India. Actionable Themes: many stocks highlighted within Consumer Discretionary, Energy, Industrials, Services, and Technology</li>
</ul>


Global equites (MSCI ACWI) have pulled back some following the FOMC's hawkish-leaning announcement. Short-term support is at $102 on ACWI-US--last week's breakout level-- while longer-term support remains at $98-$99.
A break below $102 would indicate more consolidation is likely but, if ACWI-US remains above $98, we remain bullish on global equities, and we view pullbacks as buying opportunities.
Europe remains bullish, and we remain overweight Japan and India. Actionable Themes: many stocks highlighted within Consumer Discretionary, Energy, Industrials, Services, and Technology


MSCI ACWI, EURO STOXX 50, TOPIX Remain Bullish; Buys in Cons Disc, Industrials, Services, Technology

Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>We had thought that Fast Retailing may just miss Q1 numbers due to the warm weather; it beat on strong November and 270bps improvement in gross margin. </li>
<li>Following the slightly better results, we maintain our sales forecast at 3.1 trillion yen, but revise our operating profit estimate from 439 billion yen to 455 billion yen.</li>
<li>Overall, we do not think the market will be overly surprised by the results and we maintain our view that the stock is over priced.</li>
</ul>


We had thought that Fast Retailing may just miss Q1 numbers due to the warm weather; it beat on strong November and 270bps improvement in gross margin. 
Following the slightly better results, we maintain our sales forecast at 3.1 trillion yen, but revise our operating profit estimate from 439 billion yen to 455 billion yen.
Overall, we do not think the market will be overly surprised by the results and we maintain our view that the stock is over priced.


Fast Retailing (9983) | Another Stylish Quarter

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.

<ul>
<li>
<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> announced its 1QFY24 results today, surpassing the consensus OP estimate by approximately 7%.</li>
<li>Notably, Uniqlo International demonstrated robust growth, even from regions (North America &amp; Europe) that were anticipated to underperform in this quarter. </li>
<li>The domestic business OP also managed to top consensus expectations as they managed to improve the gross margin by 2.7% YoY.</li>
</ul>



Fast Retailing (9983 JP) announced its 1QFY24 results today, surpassing the consensus OP estimate by approximately 7%.
Notably, Uniqlo International demonstrated robust growth, even from regions (North America &amp; Europe) that were anticipated to underperform in this quarter. 
The domestic business OP also managed to top consensus expectations as they managed to improve the gross margin by 2.7% YoY.


<ul>
<li>We anticipate a sluggish beginning to the fiscal year with 1Q8/24 earnings reflecting slower growth in Japan, China, and Southeast Asia.</li>
<li>Our forecast for 1Q24 operating profit stands at ¥130 billion, slightly below the consensus estimate of ¥138 billion. Assuming our estimates are accurate, we anticipate a slightly negative share-price reaction.</li>
<li>Our bearish stance on the stock persists, driven by the fact that it trades at a premium to our DCF and at a premium compared to global peers</li>
</ul>


We anticipate a sluggish beginning to the fiscal year with 1Q8/24 earnings reflecting slower growth in Japan, China, and Southeast Asia.
Our forecast for 1Q24 operating profit stands at ¥130 billion, slightly below the consensus estimate of ¥138 billion. Assuming our estimates are accurate, we anticipate a slightly negative share-price reaction.
Our bearish stance on the stock persists, driven by the fact that it trades at a premium to our DCF and at a premium compared to global peers


Fast Retailing (9983) | Q1 Preview - Slight Miss

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>Uniqlo is such a mainstay of Japanese retailing, and indeed life, that its dominance seems inevitable and unchanging. </li>
<li>Yet it has morphed from a mess of poorly judged acquisitions and failed overseas experiments into Japan’s biggest retail export – and still manages to pull off 20% growth.</li>
<li>Its latest target of ¥10 trillion in 10 years is far-fetched but its history of persistent determination suggests continued expansion is a certainty.</li>
</ul>


Uniqlo is such a mainstay of Japanese retailing, and indeed life, that its dominance seems inevitable and unchanging. 
Yet it has morphed from a mess of poorly judged acquisitions and failed overseas experiments into Japan’s biggest retail export – and still manages to pull off 20% growth.
Its latest target of ¥10 trillion in 10 years is far-fetched but its history of persistent determination suggests continued expansion is a certainty.


Fast Retailing: Great Fundamentals for Uniqlo, Shame About the Share Price

Japan

Nitori Holdings Co., Ltd., is based in Hokkaido and operates a furniture retail chain.  The Company sells living room furniture, storage furniture, dining furniture, office furniture, beds, and interior goods.  Nitori Holdings also sells original brand merchandise and imported merchandise.

ABC-MART, INC. plans, develops, wholesales, and retails shoes.  The Company also plans and develops brand name shoes such as VANS and G.T. HAWKINS.  ABC-Mart imports and wholesales shoes, apparel, bags, and sundries as well.

HIKARI TSUSHIN, INC. is a mobile telecommunication service subscription agency. The Company also operates telecommunication services stores, HIT SHOP, which sell cellular telephones, and related goods.  Hikari Tsushin also sells office automation equipment and insurance.

Sanrio Company, Ltd. manufactures and sells character goods including gift merchandise, greeting cards, and stationery products.  The Company also produces books, magazines, and movies, and though its subsidiary, operates restaurants and amusement parks.

USS CO LTD manages used car auction facilities throughout  Japan. The Company al so conducts auto auctions through satellites, and provides used car information through internet.

SHIMAMURA CO., Ltd. operates chain stores selling mainly clothing for men, women, children, and also bedding and furnishing goods.  The Company has stores in mainly suburb areas throughout Japan.

YAMADA DENKI CO., LTD. operates consumer electronic mass sales stores throughout Japan.  The Company sells home appliances, audio & visual systems, office automation equipment, telecommunication equipment, software, and computers. The Company also provides repair services for its merchandises.

WORKMAN CO., LTD. designs, produces, and retails work uniforms and related goods including work gloves and safety shoes.  The Company operates its own stores and franchise stores located throughout eastern Japan.

BIC CAMERA INC. operates electronic retail stores throughout Japan focusing on the Tokyo metropolitan area.  The Company sells audio and video equipments, electrical home appliances and telecommunication equipments.  Bic Camera also runs an Internet shopping site.

K'S HOLDINGS CORPORATION, based in Ibaraki prefecture, operates large scale electrical appliance store chain.  Franchise stores operates throughout Japan. The Company sells a variety of electrical appliances including refrigerators, washing machines, cooking appliances, computers, audio & visual systems, and air conditioners.

Dick's Sporting Goods, Inc. operates as a sporting goods retailer that manages stores primarily in the eastern and central United States. The Company owns stores that offers a broad selection of brand name sporting goods equipment, apparel, and footwear.

Burlington Stores, Inc. owns and operates clothing retail stores. The Company offers, through its stores and internet sites, men's, women's, and children's apparel. Burlington Holding operates within the United States and Puerto Rico.

Tractor Supply Company operates a retail farm store chain in the United States. The Company provides farm maintenance products, animal products, general maintenance products, lawn and garden products, light truck equipment, work clothing, and other products.  Customers include hobby, part-time, and full-time farmers and ranchers, as well as rural customers, contractors, and tradesman.

Lowe's Companies, Inc. is a home improvement retailer that distributes building materials and supplies through stores in the United States. The Company offers a complete line of products and services for home decorating, maintenance, repair, remodeling, and property maintenance.

Murphy USA Inc. produces and distributes petroleum products. The Company engages in refining, marketing, and transportation of oil and gas products. Murphy USA provides products and services worldwide.

O'Reilly Automotive, Inc. retails and supplies automotive aftermarket parts, tools, supplies, equipment, and accessories.  The Company sells its products to do-it-yourself customers and professional mechanics or service technicians. O'Reilly operates stores throughout the United States.

Ulta Beauty, Inc. operates a chain of beauty stores. The Company offers cosmetics, fragrance, skin, and hair care products, as well as salon services. Ulta Beauty serves customers throughout the United States.

Williams-Sonoma, Inc. retails cooking and serving equipment, home furnishings, and home accessories through retail stores, mail order catalogs and e-commerce. The Company offers its merchandise under the Williams-Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, and West Elm.

Hotai Motor Company Ltd. operates as an automobile dealership. The Company sells and services new and used cars and trucks in Taiwan.

GameStop Corporation operates specialty electronic game and PC entertainment software stores throughout the United States, Australia, Canada and Europe. The Company stores sell new and used video game hardware, video game software and accessories, as well as PC entertainment software, and related accessories and other merchandise.

FAST RETAILING CO., LTD. operates a chain of clothing stores, UNIQLO, throughout Japan and in other markets overseas including UK, China, Hong Kong, South Korea, US, France, Singapore and Russia.  The Company designs, manufactures, and retails its own line of casual clothing.

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Fast Retailing (9983 JP)

MSCI ACWI, EURO STOXX 50, TOPIX Remain Bullish; Buys in Cons Disc, Industrials, Services, Technology

MSCI ACWI, EURO $STOXX 50, $TOPIX Remain Bullish. $ACWI holding above short-term support at $102 (last week's breakout level), though we remain...

Vermilion Research

Fast Retailing (9983) | Another Stylish Quarter

Fast Retailing beats Q1 expectations with strong November sales and improved gross margin. Our operating profit estimate revised upwards. Stock...

Mark Chadwick

Fast Retailing: 1QFY24 Earnings

Fast Retailing's Q1 results exceeded expectations, with Uniqlo Int showing strong growth in regions expected to underperform and Uniqlo Japan...

Oshadhi Kumarasiri

Fast Retailing (9983) | Q1 Preview - Slight Miss

Anticipating slow growth in Japan, China, and Southeast Asia, 1Q8/24 earnings are expected to be sluggish, leading to a slightly negative share...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

MSCI ACWI, EURO STOXX 50, TOPIX Remain Bullish; Buys in Cons Disc, Industrials, Services, Technology

MSCI ACWI, EURO $STOXX 50, $TOPIX Remain Bullish. $ACWI holding above short-term support at $102 (last week's breakout level), though we remain...

Vermilion Research

Fast Retailing (9983) | Another Stylish Quarter

​Fast Retailing beats Q1 expectations with strong November sales and improved gross margin. Our operating profit estimate revised upwards. Stock...

Mark Chadwick

Fast Retailing: 1QFY24 Earnings

​Fast Retailing's Q1 results exceeded expectations, with Uniqlo Int showing strong growth in regions expected to underperform and Uniqlo Japan...

Oshadhi Kumarasiri

Fast Retailing (9983) | Q1 Preview - Slight Miss

​Anticipating slow growth in Japan, China, and Southeast Asia, 1Q8/24 earnings are expected to be sluggish, leading to a slightly negative share...

Mark Chadwick

Fast Retailing: Great Fundamentals for Uniqlo, Shame About the Share Price

Insights summarises Uniqlo's strong long-term fundamentals that are providing the basis for the recent results but which are often forgotten as...

Michael Causton

Fast Retailing beats Q1 expectations with strong November sales and improved gross margin. Our operating profit estimate revised upwards. Stock...

Fast Retailing's Q1 results exceeded expectations, with Uniqlo Int showing strong growth in regions expected to underperform and Uniqlo Japan...

Anticipating slow growth in Japan, China, and Southeast Asia, 1Q8/24 earnings are expected to be sluggish, leading to a slightly negative share...