Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

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/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent Inc (4751 JP)</a> reported its 2QFY09/22 financial results after the market closed on 26th. Revenue for the quarter increased 16.9% YoY to JPY 191.1bn vs consensus revenue of JPY 185.5bn.</li>
<li>However, OP declined 11.6% YoY to JPY 25.7bn vs consensus JPY 28.5bn (miss of 9.8%) due to decline in profits from gaming. OPM worsened by 240bp to 13.5% in 2QFY09/22.</li>
<li>CyberAgent’s valuation multiples have been declining largely but WINTICKET seems to be coming up as a ticket for growth and the internet advertising business is in a path of recovery.   </li>
</ul>



CyberAgent Inc (4751 JP) reported its 2QFY09/22 financial results after the market closed on 26th. Revenue for the quarter increased 16.9% YoY to JPY 191.1bn vs consensus revenue of JPY 185.5bn.
However, OP declined 11.6% YoY to JPY 25.7bn vs consensus JPY 28.5bn (miss of 9.8%) due to decline in profits from gaming. OPM worsened by 240bp to 13.5% in 2QFY09/22.
CyberAgent’s valuation multiples have been declining largely but WINTICKET seems to be coming up as a ticket for growth and the internet advertising business is in a path of recovery.   


CyberAgent 2Q: OP Miss Is No Big Concern as Revenue Continues to Show Potential

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

<ul>
<li>We have previously commented on Valorant’s relatively unique position in esports due to its high degree of regional parity and that is being further underscored during its ongoing Masters tournament. </li>
<li>In particular, Japan, a region not known for any particular prowess in FPS titles secured its first top eight position generating significant buzz on twitter in doing so. </li>
<li>The implications look positive here for both Valorant overall and for Japan’s esports ambitions where it is probably now time to truly familiarise yourself with the potential plays.</li>
</ul>


We have previously commented on Valorant’s relatively unique position in esports due to its high degree of regional parity and that is being further underscored during its ongoing Masters tournament. 
In particular, Japan, a region not known for any particular prowess in FPS titles secured its first top eight position generating significant buzz on twitter in doing so. 
The implications look positive here for both Valorant overall and for Japan’s esports ambitions where it is probably now time to truly familiarise yourself with the potential plays.


Valorant’s Regional Parity and Japan’s Emerging Esports Scene

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Yesterday 14 February, Dentsu announced bte profits, and guidance for 2022 which appears in-line to slightly strong in terms of revenue, slightly weak/conservative in terms of IFRS/GAAP OP.</li>
<li>The company also announced what appears to be a BIG buyback. </li>
<li>Looks are deceiving, but somehow not, but there are catches in both directions. If you have a flow axe, it is worth knowing the flow details.</li>
</ul>


Yesterday 14 February, Dentsu announced bte profits, and guidance for 2022 which appears in-line to slightly strong in terms of revenue, slightly weak/conservative in terms of IFRS/GAAP OP.
The company also announced what appears to be a BIG buyback. 
Looks are deceiving, but somehow not, but there are catches in both directions. If you have a flow axe, it is worth knowing the flow details.


Dentsu BIG Buyback - Both Larger and Smaller Than It Appears

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent</a> reported 1QFY09/2022 results on Wednesday. Revenue for the quarter increased 30.6% YoY to JPY171.1bn (vs consensus revenue of JPY173.4bn) while OP increased 11.6% YoY to JPY19.8bn (vs consensus JPY24.5bn).</li>
<li>Games business reported strong growth in revenue, however, OPM continues to decline with increased advertising cost. Some of the older titles which performed strong have started to decline.</li>
<li>Internet advertising and Media continue to grow, with resurgence of Covid-19 cases, it seems internet ad business will take longer to bounce back to pre-Covid levels.</li>
</ul>



CyberAgent reported 1QFY09/2022 results on Wednesday. Revenue for the quarter increased 30.6% YoY to JPY171.1bn (vs consensus revenue of JPY173.4bn) while OP increased 11.6% YoY to JPY19.8bn (vs consensus JPY24.5bn).
Games business reported strong growth in revenue, however, OPM continues to decline with increased advertising cost. Some of the older titles which performed strong have started to decline.
Internet advertising and Media continue to grow, with resurgence of Covid-19 cases, it seems internet ad business will take longer to bounce back to pre-Covid levels.


CyberAgent: Earnings Miss Consensus and No Guidance; Games Growth Is Worrying

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. 

Thematic (Sector/Industry)

Convenience store (CVS) retailing remains the most dynamic and innovative physical store sector. It is now 50 years since the first Seven Eleven opened and the sector wide drop in sales in 2020 was the first in its history.Whereas department stores also took a battering last year and are likely to struggle to recover, convenience stores should bounce back quickly, including implementing lessons learned in last year’s crisis.That does not mean the format faces no problems, with labour shortages, overly strict operating procedures and an ageing population of store owners (many are now reaching retirement age with no succession in place) all issues that need solutions, but its willingness and ability to adopt new technologies and adapt to the market will continue to keep CVS strong.The following is an annual in-depth review of the entire CVS sector providing context for investors in any of the big CVS retailers (and their competing formats) as well as reviews of each major firm's KPIs.

Convenience store (CVS) retailing remains the most dynamic and innovative physical store sector. It is now 50 years since the first Seven Eleven opened and the sector wide drop in sales in 2020 was the first in its history.Whereas department stores also took a battering last year and are likely to struggle to recover, convenience stores should bounce back quickly, including implementing lessons learned in last year’s crisis.That does not mean the format faces no problems, with labour shortages, overly strict operating procedures and an ageing population of store owners (many are now reaching retirement age with no succession in place) all issues that need solutions, but its willingness and ability to adopt new technologies and adapt to the market will continue to keep CVS strong.The following is an annual in-depth review of the entire CVS sector providing context for investors in any of the big CVS retailers (and their competing formats) as well as reviews of each major firm's KPIs.

Convenience Stores: First Decline in 50 Years

Japan

FUJI MEDIA HOLDINGS, INC., a member of the Fuji-Sankei Group, produces and broadcasts a variety of television programs and sells commercial spots through a network system.  The Company is advancing into digital satellite broadcasting.

KADOKAWA DWANGO CORP is a holding company established through the merger of DWAN GO and KADOKAWA. The company publishes a variety of books and magazines as well as produces movies and videos.  KADOKAWA DWANGO CORP also develops and makes int ernet communication tools for cellular phones.

HAKUHODO DY HOLDINGS INCORPORATED is a holding company established through the merger of Hakuhodo Inc., Daiko Advertising Inc., and Yomiko Advertising Inc. The Company, through its subsidiaries, provides comprehensive advertising services.

TOEI ANIMATION CO., LTD. plans and produces animated cartoon movies.  The Company also grants broadcasting rights and licenses for other companies to produce and sell the animated characters' merchandise.  Toei Animation stages its own promotional shows and events to advertise movies.

Nippon Television Holdings Inc is a commercial television broadcaster which provides programs through a national network system.  The Company is expanding into digital satellite broadcasting. Nippon Television also operates publication and entertainment business such as concerts and exhibitions. The Company is affiliated with Yomiuri Shimbun.

TOKYO BROADCASTING SYSTEM HOLDINGS, INC. is a media company that broadcasts television and radio programs nationally.  The Company offers a variety of TV programs & film production, visual & music software production, and cable television programming.  Tokyo Broadcasting System provides digital satellite broadcasting services and also operates real estate business.

SKY Perfect JSAT Holdings, Inc. is a holding company, which manages financial operations for its subsidiaries. As a group, the Company provides broadcasting and data transmission services via satellites. SKY Perfect JSAT delivers digital TV programs including movies, music, sports and entertainment to its subscribers.

TOEI COMPANY, LTD. produces and distributes movies, television programs, and video software.  The Company also manages direct-run movie theaters.

DAIICHIKOSHO CO., LTD. manufactures, sells, and, leases karaoke equipment and software.  The Company also operates karaoke booth chains called Big Echo, provides karaoke software via cable line called DAM, and participates in broadcasting via satellite.

TV Asahi Holdings Corporation produces and broadcasts a variety of television programs mainly in the Tokyo area. The Company sells commercial spots through a network system. TV Asahi also provides patent maintenance for music publication, entertainment planning, sales of broadcasting equipment, and TV shopping.

DISH Network Corp. provides a direct broadcast satellite subscription television, audio programming and interactive television services to commercial and residential subscribers in the United States.

Beijing Enlight Media Company Limited invest, produces and distributes television programs, films and teleplays. The Company's major products include TV shows, TV entertainment programs, films and drama series.

Cinemark Holdings, Inc. operates movie theaters.  The Company operates in the United States and Latin America.

Jiangsu Phoenix Publishing & Media Corporation Limited publishes, distributes books, publications and audio-visual products, and sells cultural goods. The Company's main products include textbooks, teaching aids, and general books.

Chinese Universe Publishing and MediaCo., Ltd. manufactures enamel-covered wires and other copper wires.  Through its subsidiaries, the Company also manufactures buses and related parts.

Chinese Universe Publishing&Media (600373 CH)

TEGNA Inc. is an international broadcasting and digital media company. The Company owns and operates television and radio stations, delivering news and informative content. TEGNA also provides digital marketing solutions in the automotive, human capital and digital marketing industries for individuals and businesses.

Sun TV Network Ltd. offers television channels. The Company operates Tamil and Malayalam language channels in southern India.

China South Publishing & Media Group Company Ltd. is a media company.  The Company prints, publishes and distributes books, newspapers and journals; develops audio-visual materials; and offers digital publishing services.

Telenet Group Holding NV provides telephone and internet services through a network of fiber-optic and coaxial cable.  The company offers customized packages to businesses and individual clients in Belgium.

Eutelsat Communications is a KU-band satellite operator.  The Company offers television and radio broadcasting, video broadcasting, corporate networks, Internet access, and mobile communications.  Eutelsat serves Europe, the Middle East, Africa, Asia, eastern North America, and South America.

CyberAgent, Inc. operates blog media website, Ameba.  The Company also operates internet advertising agency, foreign exchange trading website, and creates PC and mobile contents such as advertisements and games. CyberAgent invests in companies with internet related business.

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CyberAgent Inc (4751 JP)

CyberAgent 2Q: OP Miss Is No Big Concern as Revenue Continues to Show Potential

CyberAgent’s valuation multiples have been declining largely but WINTICKET seems to be coming up as a ticket for growth and the internet...

Shifara Samsudeen, ACMA, CGMA

Valorant’s Regional Parity and Japan’s Emerging Esports Scene

We outline our thoughts on esports in Japan and globally based on some interesting trends during the ongoing Valorant international tournament.

Mio Kato

Dentsu BIG Buyback - Both Larger and Smaller Than It Appears

Dentsu (4324) announced earnings and a large buyback. That buyback is larger than it appears, but actually smaller, but then larger again, but it...

Travis Lundy

CyberAgent: Earnings Miss Consensus and No Guidance; Games Growth Is Worrying

CA's 1QFY09/2022 revenue and OP missed consensus. UMA MUSUME continues to perform strongly, but some of the old titles which had strong ranks have...

Shifara Samsudeen, ACMA, CGMA

Convenience Stores: First Decline in 50 Years

For any investor in Japan's consumer staples sector, the convenience store sector is a key component. The following is an in-depth analysis of the...

Michael Causton

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