Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>UK-Based Japanese share activist AVI said publicly yesterday that the price Mitsui OSK announced to take out minorities in <a href="https://www.smartkarma.com/entities/daibiru-corp" target="_blank" data-smartkarma-citation="entities:19065:1" rel="noopener">Daibiru Corp (8806 JP)</a> should be ¥3,000/share not ¥2,200/share.</li>
<li>Today AVI launched a website at <a href="https://www.assetvalueinvestors.com/stopexploitingdaibiru/" target="_blank" rel="noopener">https://www.assetvalueinvestors.com/stopexploitingdaibiru/</a> in which they make their <a href="https://www.assetvalueinvestors.com/content/uploads/2021/12/Daibiru-Public-Presentation_202112_ENG_vF.pdf" target="_blank" rel="noopener">case</a>. </li>
<li>They've got a point. And it is definitely a good point. But the shareholder structure means this is a short-gamma situation for bumpitrageurs.</li>
</ul>


UK-Based Japanese share activist AVI said publicly yesterday that the price Mitsui OSK announced to take out minorities in Daibiru Corp (8806 JP) should be ¥3,000/share not ¥2,200/share.
Today AVI launched a website at https://www.assetvalueinvestors.com/stopexploitingdaibiru/ in which they make their case. 
They've got a point. And it is definitely a good point. But the shareholder structure means this is a short-gamma situation for bumpitrageurs.


Mitsui OSK TOB for Daibiru (8806) Gets Loose from Its Mooring

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

The following is an in-depth review of Japanese retail in the last 18 months covering all the main formats and categories, providing a quick way to see an overview of all the key trends and winners and losers in Japanese retailing now and going forward.FY2020 was an anomaly and one that businesses everywhere will want to forget and never repeat. There was more than enough pain among Japan’s top retailers last year, but equally some formats did surprisingly well given the circumstances.For most, work-from-home was the single most important factor in determining a chain’s fortunes. City-centre stores and shopping centres offering mostly discretionary shopping have been hit hard, as have convenience stores.But those chains selling essentials, healthcare, electronics and, most importantly, food, all saw their fortunes improve. The pandemic has also revealed the strong, dynamic players and exposed the weaker ones. Oh, and everyone needs to be online.

The following is an in-depth review of Japanese retail in the last 18 months covering all the main formats and categories, providing a quick way to see an overview of all the key trends and winners and losers in Japanese retailing now and going forward.FY2020 was an anomaly and one that businesses everywhere will want to forget and never repeat. There was more than enough pain among Japan’s top retailers last year, but equally some formats did surprisingly well given the circumstances.For most, work-from-home was the single most important factor in determining a chain’s fortunes. City-centre stores and shopping centres offering mostly discretionary shopping have been hit hard, as have convenience stores.But those chains selling essentials, healthcare, electronics and, most importantly, food, all saw their fortunes improve. The pandemic has also revealed the strong, dynamic players and exposed the weaker ones. Oh, and everyone needs to be online.

The Polarising Pandemic in Japanese Retail

Japan’s retail and distribution sector has long been seen as fragmented, even to the point of being accused of inefficiency. On the surface, concentration levels do remain low, but scratch that surface and a very different picture emerges.
By format and by category sector, larger companies are taking increasing share and, over the past five years, this trend has accelerated.
Now, given the pressures of Covid, there is ample opportunity for stronger players to gain ground by buying out weaker ones, while some mid-level companies are joining together, hoping to become a fish too big to swallow.
Business tie-ups are also increasing in number, particularly as physical retailers seek to bring in and learn skills necessary to succeed in e-commerce and to build omnichannel models.
The following is a detailed review of how concentration has increased along with a map of who own who in retailing today.
There is a strong possibility that we could see some really big deals, even ones that span format and geographical borders, as many mid-sized retailers recognise that independent survival is getting hard. Acquirers will use the current environment to diversify into new areas, expand volumes and market share, or simply acquire more retail property for long-term development.

Japan’s retail and distribution sector has long been seen as fragmented, even to the point of being accused of inefficiency. On the surface, concentration levels do remain low, but scratch that surface and a very different picture emerges.
By format and by category sector, larger companies are taking increasing share and, over the past five years, this trend has accelerated.
Now, given the pressures of Covid, there is ample opportunity for stronger players to gain ground by buying out weaker ones, while some mid-level companies are joining together, hoping to become a fish too big to swallow.
Business tie-ups are also increasing in number, particularly as physical retailers seek to bring in and learn skills necessary to succeed in e-commerce and to build omnichannel models.
The following is a detailed review of how concentration has increased along with a map of who own who in retailing today.
There is a strong possibility that we could see some really big deals, even ones that span format and geographical borders, as many mid-sized retailers recognise that independent survival is getting hard. Acquirers will use the current environment to diversify into new areas, expand volumes and market share, or simply acquire more retail property for long-term development.

Who Owns Who: Concentration Levels Accelerate in Japan Retail, with More M&A to Come

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.

Our 2021 high conviction call, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, announced last week that it has completed the acquisition of the Speedway Gas Stations business from Marathon Petroleum. However, the acting chairperson Rebecca Kelly Slaughter and Commissioner Rohit Chopra of the US Federal Trade Commission issued a statement on the FTC website, on May 14th, 2021, saying that this transaction is illegal as it could impact competition and cause prices to soar at gas stations and convenience stores across the U.S.This insight is labelled bullish because we think the odds of Seven &amp; I facing major legal and anticompetitive ramifications are somewhat slim, while there is still a possibility of 25-30% upside with the disclosure of the combined entity’s mid and long-term goals.

Our 2021 high conviction call, Seven &amp; I Holdings (3382 JP), announced last week that it has completed the acquisition of the Speedway Gas Stations business from Marathon Petroleum. However, the acting chairperson Rebecca Kelly Slaughter and Commissioner Rohit Chopra of the US Federal Trade Commission issued a statement on the FTC website, on May 14th, 2021, saying that this transaction is illegal as it could impact competition and cause prices to soar at gas stations and convenience stores across the U.S.This insight is labelled bullish because we think the odds of Seven &amp; I facing major legal and anticompetitive ramifications are somewhat slim, while there is still a possibility of 25-30% upside with the disclosure of the combined entity’s mid and long-term goals.

2021 High Conviction Call: Seven & I Completes the Speedway Acquisition, But Not Without Trouble

Japan

FamilyMart Co., Ltd. operates convenience store chains. The Company provides rice balls, hot snacks, stews, beverages, and other products. FamilyMart conducts businesses in China, Taiwan, South Korea, Thailand, and other countries and regions.

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FamilyMart Co Ltd (8028 JP)

Mitsui OSK TOB for Daibiru (8806) Gets Loose from Its Mooring

Mitsui OSK's Tender Offer for Daibiru was low but supported by a substantial cross-held position - likely enough to get this past 2/3 IF the shares...

Travis Lundy

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

The Polarising Pandemic in Japanese Retail

A complete review of the Japanese retail sector in the last 18 months, format by format, category by category, providing key trends and winners &...

Michael Causton

Who Owns Who: Concentration Levels Accelerate in Japan Retail, with More M&A to Come

Japanese retail is in the process of extensive concentration and market consolidation through M&A, organic expansion and tie-ups. Numerous...

Michael Causton

2021 High Conviction Call: Seven & I Completes the Speedway Acquisition, But Not Without Trouble

Investors cannot completely ignore legal ramifications, but the probability of occurrence of such seems somewhat slim in our opinion. On the other...

Oshadhi Kumarasiri

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