Telco/Internet specialist

Kirk Boodry

Redex Research

Thematic (Sector/Industry)

<ul>
<li>The Japan telecom and Internet companies in our coverage universe held ¥1,253bn in public equities as of Q2(Sep) largely built through capital alliances tied to business collaboration</li>
<li>NTT has the largest portfolio at c. ¥958bn (7% of market cap) followed by KDDI. Toyota (¥354bn) and JTower (three strategic telcos) are the largest and most widely held </li>
<li>The P&amp;L impact of valuation changes in Q2 should be muted. We have included tables for all the companies in our coverage</li>
</ul>


The Japan telecom and Internet companies in our coverage universe held ¥1,253bn in public equities as of Q2(Sep) largely built through capital alliances tied to business collaboration
NTT has the largest portfolio at c. ¥958bn (7% of market cap) followed by KDDI. Toyota (¥354bn) and JTower (three strategic telcos) are the largest and most widely held 
The P&amp;L impact of valuation changes in Q2 should be muted. We have included tables for all the companies in our coverage


Japan Telecoms/Internet - A Quick Look at Public Equity Portfolios

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/askul-corp" target="_blank" data-smartkarma-citation="entities:16807:1" rel="noopener">Askul Corp (2678 JP)</a> posted the best revenue growth in six quarters as both B2B and consumer product sales accelerated</li>
<li>The corresponding operating income decline of 10% is less welcome but that includes a front-loading of planned growth investments and full year guidance of 1% growth is unchanged</li>
<li>We are tagging this insight as bearish as headlines of a 10% OP decline might not be as well received as the top-line story </li>
</ul>



Askul Corp (2678 JP) posted the best revenue growth in six quarters as both B2B and consumer product sales accelerated
The corresponding operating income decline of 10% is less welcome but that includes a front-loading of planned growth investments and full year guidance of 1% growth is unchanged
We are tagging this insight as bearish as headlines of a 10% OP decline might not be as well received as the top-line story 


Askul Q1 23 Results Reaction: Solid Revenue but OP Down on Front-Loaded Investments

<ul>
<li>Askul posted Q4 results that were largely in-line and issued FY23 targets that are robust for revenue growth (+6%) but accompanied by upfront investment</li>
<li>Management also announced it would prepare subsidiary AlphaPurchase for a public listing although the timing has not been determined</li>
<li>The miss on profitability guidance is not ideal but the acceleration of top-line growth is attractive</li>
</ul>


Askul posted Q4 results that were largely in-line and issued FY23 targets that are robust for revenue growth (+6%) but accompanied by upfront investment
Management also announced it would prepare subsidiary AlphaPurchase for a public listing although the timing has not been determined
The miss on profitability guidance is not ideal but the acceleration of top-line growth is attractive


Askul Corp - Q4 22 Results Reaction: Mixed as Growth Looks Appealing but Profits Light

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>As we have been tracking in recent months, the market for rapid home delivery of FMCG and food is hotting up, with much of the action at convenience stores.</li>
<li>The CVS sector was one of the hardest hit by the pandemic but with a network of 56,000 stores, there is an opportunity to use these stores as supply points.</li>
<li>CVS need to engage with delivery services given the growing number of firms creating their own dark store networks which compete with local supermarkets and CVS.</li>
</ul>


As we have been tracking in recent months, the market for rapid home delivery of FMCG and food is hotting up, with much of the action at convenience stores.
The CVS sector was one of the hardest hit by the pandemic but with a network of 56,000 stores, there is an opportunity to use these stores as supply points.
CVS need to engage with delivery services given the growing number of firms creating their own dark store networks which compete with local supermarkets and CVS.


Quick Commerce and Unmanned Stores Challenge Japanese Convenience Retailing

<ul>
<li>Q3 22 results were in-line/ahead of consensus expectations but shares fell 7% today anyway</li>
<li>Operating profit fell 10% as improvements in operating losses for new businesses like Lohaco and logistics were not enough to make up for higher spending in the core B2B segment</li>
<li>Despite the decline, Askul shares have largely outperformed peers YTD on optimism over the planned launch of quick commerce business Yahoo!Mart announced in late January</li>
</ul>


Q3 22 results were in-line/ahead of consensus expectations but shares fell 7% today anyway
Operating profit fell 10% as improvements in operating losses for new businesses like Lohaco and logistics were not enough to make up for higher spending in the core B2B segment
Despite the decline, Askul shares have largely outperformed peers YTD on optimism over the planned launch of quick commerce business Yahoo!Mart announced in late January


Askul Corp - Q3 22 Results Reaction: Margin Concerns Hold Back Shares Despite Beat

Japan

ASKUL Corporation sells office equipment products to medium and small sized business offices via the Internet and facsimiles.  The Company provides next day delivery services throughout Japan.

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Askul Corp (2678 JP)

Japan Telecoms/Internet - A Quick Look at Public Equity Portfolios

Public equity portfolios in our coverage represent 3% of total market cap, driven by capital alliances tied to business collaboration. We thought...

Kirk Boodry

Askul Q1 23 Results Reaction: Solid Revenue but OP Down on Front-Loaded Investments

Askul posted the best revenue growth in six quarters but one-time growth investments drove corresponding OP down 10%. The good news is the rest of...

Kirk Boodry

Askul Corp - Q4 22 Results Reaction: Mixed as Growth Looks Appealing but Profits Light

Askul is forecasting 6% top-line growth for the coming year, in line with mid-term plans, but like parent Z Holdings, investment to drive its FY25...

Kirk Boodry

Quick Commerce and Unmanned Stores Challenge Japanese Convenience Retailing

As we have been tracking in recent months, the market for rapid home delivery of FMCG and food is hotting up, with much of the action at...

Michael Causton

Askul Corp - Q3 22 Results Reaction: Margin Concerns Hold Back Shares Despite Beat

Q3 22 results were largely as expected but concerns on near-term margins after a 22% decline in core B2B segment operating income may be weighing...

Kirk Boodry

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