'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)

<p style="text-align: center;"><strong>• COVID UPDATE •</strong></p><p style="text-align: left;">Nationwide, there were 5,943 new cases yesterday. This is a new record and an increase of more than 1,000 from Tuesday, the previous record. In Tokyo, there were 1,591 new cases - another daily record. PM Suga has all but stated that a new State of Emergency would begin later today - January 7th. The government appears to want to limit the State of Emergency to approximately one month. Several academics and doctors are increasingly vocal that at least two months is necessary.</p><p>According to Kyodo, the negative economic impact of a one-month State of Emergency in Tokyo and its surrounding prefectures ranges from $39 to $47.5 billion. If a nationwide State of Emergency were enacted, the estimated negative impact would be $135 billion per month or 2.53 percentage points of annual GDP. Unusually for Japan, companies that would be negatively impacted are becoming very vocal in their opposition to new restrictions. Meanwhile, the equity market reached a new five-year high in US dollar terms.</p><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p><p style="text-align: left;">Wednesday's 'best' and 'worst' pairing among larger-cap stocks is <a href="https://www.smartkarma.com/entities/bell-system24-holdings-inc" target="_blank" data-smartkarma-citation="entities:27224:1" rel="noopener">BellSystem24 (6183 JP)</a> and <a href="https://www.smartkarma.com/entities/arcs-co-ltd" target="_blank" data-smartkarma-citation="entities:7580:1" rel="noopener">Arcs (9948 JP)</a> although the latter is of interest on the long 'side' in a new State of Emergency.</p><section class="figure"><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/196/original/2021-01-07_06-46-39.png?1609969610" class="editor-image img-responsive" data-smartkarma-image-id="181196"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/197/original/2021-01-07_06-49-24.png?1609969777" class="editor-image img-responsive" data-smartkarma-image-id="181197"></figure></section></section><div style="text-align: center;" class="content-caption">Source for all charts &amp; tables: Japan Analytics</div>

• COVID UPDATE •Nationwide, there were 5,943 new cases yesterday. This is a new record and an increase of more than 1,000 from Tuesday, the previous record. In Tokyo, there were 1,591 new cases - another daily record. PM Suga has all but stated that a new State of Emergency would begin later today - January 7th. The government appears to want to limit the State of Emergency to approximately one month. Several academics and doctors are increasingly vocal that at least two months is necessary.According to Kyodo, the negative economic impact of a one-month State of Emergency in Tokyo and its surrounding prefectures ranges from $39 to $47.5 billion. If a nationwide State of Emergency were enacted, the estimated negative impact would be $135 billion per month or 2.53 percentage points of annual GDP. Unusually for Japan, companies that would be negatively impacted are becoming very vocal in their opposition to new restrictions. Meanwhile, the equity market reached a new five-year high in US dollar terms.• BEST &amp; WORST •Wednesday's 'best' and 'worst' pairing among larger-cap stocks is BellSystem24 (6183 JP) and Arcs (9948 JP) although the latter is of interest on the long 'side' in a new State of Emergency.Source for all charts &amp; tables: Japan Analytics

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​06 - Bellsystem24 & ARCS

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. 

Equity Bottom-Up

Pan Pacific International Holdings / Equity Bottom-Up

<p>Japan’s Ministry of Agriculture wants to expand food exports from ¥1 trillion to more than ¥5 trillion over the next 10 years, and <a href="https://www.smartkarma.com/entities/pan-pacific-international-holdings-corporation" target="_blank" data-smartkarma-citation="entities:13475:1" rel="noopener">Pan Pacific International Holdings (7532 JP)</a> is keen to help. As part of its mission, PPI hopes to change the general perception of Japanese food products as expensive treats by selling them to Asia’s mass market.</p><p><strong>With a parallel target of 500 stores overseas by 2030</strong>, PPI could also provide enough retail demand to account for a major chunk of the total food exports out of Japan.</p>

Japan’s Ministry of Agriculture wants to expand food exports from ¥1 trillion to more than ¥5 trillion over the next 10 years, and Pan Pacific International Holdings (7532 JP) is keen to help. As part of its mission, PPI hopes to change the general perception of Japanese food products as expensive treats by selling them to Asia’s mass market.With a parallel target of 500 stores overseas by 2030, PPI could also provide enough retail demand to account for a major chunk of the total food exports out of Japan.

Donki in Asia: ‘PPIC’ the New Food Export Club Propelling PPIH to 500 Stores Outside Japan

<p>At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.</p>
<p>Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.</p>
<p>Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.</p>
<p>The following is an in-depth review of Japan's retail sector, providing:</p>
<ul>
<li>An overview of consumer demand and retail performance</li>
<li>Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.</li>
<li>Rankings:
<ul>
<li>Market share and size by sector/format</li>
<li>By sales for all retailers with sales over ¥250 billion</li>
<li>By gross and operating margins, split by format and category.</li>
</ul>
</li>
</ul>
<p>As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. <a href="https://www.smartkarma.com/insights/the-japan-retail-review-winners-and-losers-in-japanese-retailing-part-i" target="_blank" rel="noopener">Part I, which provides a quick overview of all retailing, can be read here</a>.</p>

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.
Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.
Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.
The following is an in-depth review of Japan's retail sector, providing:

An overview of consumer demand and retail performance
Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.
Rankings:

Market share and size by sector/format
By sales for all retailers with sales over ¥250 billion
By gross and operating margins, split by format and category.



As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. Part I, which provides a quick overview of all retailing, can be read here.

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/315/original/2020-07-05_13-49-05.png?1593924588" class="editor-image img-responsive" data-smartkarma-image-id="144315"></figure><div class="content-caption">Source • Japan Analytics</div>
<p><strong>PROFITS TIMELINE</strong> - As the pace of quarterly results begins to pick up, the downward drift of trailing and forecast profits continue. Forecast Net Income is now below the trough of the previous cycle, and the trailing number should follow soon. Supported by the Bank of Japan, aggregate market capitalisation is above that of the early 2019 profit peak. As a result, earnings multiples are at the upper end of the five-year range, although there is evidence of some resistance at these levels.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/329/original/2020-07-05_15-13-29.png?1593929621" class="editor-image img-responsive" data-smartkarma-image-id="144329"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/331/original/2020-07-05_15-17-50.png?1593929930" class="editor-image img-responsive" data-smartkarma-image-id="144331"></figure><div class="content-caption">Source • Japan Analytics</div>
<p><strong>RESULTS &amp; REVISION SCORES</strong> - Our Scoring methodology tells the same 'story'. We are one to two quarters away from the bottom of this earnings cycle - a bottom that is likely to match that of 2009. Whether a 10% decline in market value from pre-COVID-19 levels is sufficient 'recognition' of the temporary, and in some cases, permanent, impairment of the earnings generation capability and momentum remains to be seen. We suspect the coming 'next wave' of downward revisions, as shown by Friday's one positive to nine negative ratio, will limit any upside over the summer months. </p>
<p style="text-align: center;"><strong>DAILY STATS</strong></p>
</div><hr><div><p style="text-align: center;"><strong>19 Quarterly Results</strong></p></div><div>
<ul>
<li>
<strong>Results Score:</strong> 7 Positive / 2 Neutral / 10 Negative</li>
<li>
<strong>Average Results Score Change</strong>:-2.0</li>
<li>
<strong>Average % Change in Revenue: </strong>-7.8% Quarter YoY* / +3.1% Rolling TTM YoY</li>
<li>
<strong>Average Operating Profit Margin Change:</strong> -0.4ppt</li>
</ul>
<div class="content-remarks"><p>* Excluding Kasumigaseki Capital</p></div>
</div><hr><div><p style="text-align: center;"><br><strong>7 Annual • 3 Interim Forecasts/Revisions</strong></p></div><div><ul>
<li>
<strong>Annual Forecast/Revision Score:</strong> 1 Positive / 0 Neutral / 6 Negative</li>
<li>
<strong>Interim Forecast/Revision Score Change:</strong> 0 Positive / 0 Neutral / 3 Negative</li>
<li>
<strong>Average Forecast/Revision Score Change:</strong> -15.3</li>
</ul></div>


Source • Japan Analytics
PROFITS TIMELINE - As the pace of quarterly results begins to pick up, the downward drift of trailing and forecast profits continue. Forecast Net Income is now below the trough of the previous cycle, and the trailing number should follow soon. Supported by the Bank of Japan, aggregate market capitalisation is above that of the early 2019 profit peak. As a result, earnings multiples are at the upper end of the five-year range, although there is evidence of some resistance at these levels.
Source • Japan Analytics
RESULTS &amp; REVISION SCORES - Our Scoring methodology tells the same 'story'. We are one to two quarters away from the bottom of this earnings cycle - a bottom that is likely to match that of 2009. Whether a 10% decline in market value from pre-COVID-19 levels is sufficient 'recognition' of the temporary, and in some cases, permanent, impairment of the earnings generation capability and momentum remains to be seen. We suspect the coming 'next wave' of downward revisions, as shown by Friday's one positive to nine negative ratio, will limit any upside over the summer months. 
DAILY STATS
19 Quarterly Results


Results Score: 7 Positive / 2 Neutral / 10 Negative

Average Results Score Change:-2.0

Average % Change in Revenue: -7.8% Quarter YoY* / +3.1% Rolling TTM YoY

Average Operating Profit Margin Change: -0.4ppt

* Excluding Kasumigaseki Capital
 7 Annual • 3 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 1 Positive / 0 Neutral / 6 Negative

Interim Forecast/Revision Score Change: 0 Positive / 0 Neutral / 3 Negative

Average Forecast/Revision Score Change: -15.3


🇯🇵 JAPAN • Results & Revisions 3rd July • The Next Wave

<p>No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are already predicting a completely new world in one way or another, but the reality is likely more prosaic.</p><p>What is certain is that the Japanese consumer economy will recover and it is just a question of when.</p><p>The most likely effect of the crisis is that it will catalyse a period of change already in process and which also happens to be <strong>one of the most dramatic and far-reaching seen so far in retail.</strong></p><p><strong>But there is one trend that may well reverse as more businesses go under or contract, providing relief for many retailers: the labour shortage and rise in wages.</strong></p><p>The following offers an in-depth review of both the impact of the current crisis and implications as well as the long-term trends in Japanese retailing, providing insight into <strong>which sectors, formats and specific companies will win and lose in the next three years</strong>.</p><p><strong>For a short read, we provide the conclusions and winners and losers first.</strong></p>

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are already predicting a completely new world in one way or another, but the reality is likely more prosaic.What is certain is that the Japanese consumer economy will recover and it is just a question of when.The most likely effect of the crisis is that it will catalyse a period of change already in process and which also happens to be one of the most dramatic and far-reaching seen so far in retail.But there is one trend that may well reverse as more businesses go under or contract, providing relief for many retailers: the labour shortage and rise in wages.The following offers an in-depth review of both the impact of the current crisis and implications as well as the long-term trends in Japanese retailing, providing insight into which sectors, formats and specific companies will win and lose in the next three years.For a short read, we provide the conclusions and winners and losers first.

After Covid: The Future for Japanese Retail: Winners & Losers

Japan

Arcs Co Ltd operates supermarket and discount store chain in the Hokkaido area.  The Company mainly retails foodstuffs, clothing, and sundry goods.

Price Gauge
52-week Range	0.00 - 0.00
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P/E	0.00
Dividend (Yield)	0.00

Arcs Co Ltd (9948 JP)

🇯🇵 JAPAN • Results & Revisions 01/06 - Bellsystem24 & ARCS

• COVID UPDATE • Nationwide, there were 5,943 new cases yesterday. This is a new record and an increase of more than 1,000 from Tuesday, the...

Campbell Gunn

Donki in Asia: ‘PPIC’ the New Food Export Club Propelling PPIH to 500 Stores Outside Japan

Don Don Donki stores are popular in Asia offering Japanese foods at low prices. PPIH is now working with the Japanese government to boost exports...

Michael Causton

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 3rd July • The Next Wave

PROFITS TIMELINE - As the pace of quarterly results begins to pick up, the downward drift of trailing and forecast profits continue. Forecast Net...

Campbell Gunn

After Covid: The Future for Japanese Retail: Winners & Losers

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​06 - Bellsystem24 & ARCS

• COVID UPDATE • Nationwide, there were 5,943 new cases yesterday. This is a new record and an increase of more than 1,000 from Tuesday, the...

Campbell Gunn

Donki in Asia: ‘PPIC’ the New Food Export Club Propelling PPIH to 500 Stores Outside Japan

Don Don Donki stores are popular in Asia offering Japanese foods at low prices. PPIH is now working with the Japanese government to boost exports...

Michael Causton

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 3rd July • The Next Wave

PROFITS TIMELINE - As the pace of quarterly results begins to pick up, the downward drift of trailing and forecast profits continue. Forecast Net...

Campbell Gunn

After Covid: The Future for Japanese Retail: Winners & Losers

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 01/06 - Bellsystem24 & ARCS