Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Fast Retailing, through its flagship Uniqlo, is redefining retail by focusing on high-quality, functional apparel, surpassing global peers in operating profit margins.</li>
<li>The company’s “scrap &amp; build” strategy revitalizes underperforming stores in China, while expanding internationally, with a strong growth trajectory across North America and Europe.</li>
<li>With a revised fair value of 52,500 yen, we forecast significant sales growth, driven by favorable seasonal trends, global expansion and recovering consumer sentiment in China.</li>
</ul>


Fast Retailing, through its flagship Uniqlo, is redefining retail by focusing on high-quality, functional apparel, surpassing global peers in operating profit margins.
The company’s “scrap &amp; build” strategy revitalizes underperforming stores in China, while expanding internationally, with a strong growth trajectory across North America and Europe.
With a revised fair value of 52,500 yen, we forecast significant sales growth, driven by favorable seasonal trends, global expansion and recovering consumer sentiment in China.


Fast Retailing(9983) | Weaving a Global Empire; FY8/25 Outlook

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>At end-September, the Nikkei 225 semi-annual review imposed a "cap" on <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> in the Average, applying a 0.9 coefficient to the Price Adjustment Factor.</li>
<li>At its current weight, Fast Retailing will be capped again in March 2025. If the stock outperforms Nikkei 225 by another 3% before 31 January 2025, it could be double-capped.</li>
<li>And an additional 16% would mean ¥1.1trln of sales in March. But like last time, this is a rubber band which stretches. Too far, and selling pressure is obvious.</li>
</ul>


At end-September, the Nikkei 225 semi-annual review imposed a "cap" on Fast Retailing (9983 JP) in the Average, applying a 0.9 coefficient to the Price Adjustment Factor.
At its current weight, Fast Retailing will be capped again in March 2025. If the stock outperforms Nikkei 225 by another 3% before 31 January 2025, it could be double-capped.
And an additional 16% would mean ¥1.1trln of sales in March. But like last time, this is a rubber band which stretches. Too far, and selling pressure is obvious.


Mar25 Nikkei 225 Rebal: Considering Fast Retailing Capping.... Again...

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’s European arm is on a roll, with more stores, higher sales and a loyal fan base. 35% of customers were under 29 last year up from 16% in 2019.</li>
<li>Uniqlo is also doing better at home but it needs the boost from newer markets given concerns over growth in China.</li>
<li>And it is far too early to know whether GU's formal launch in the US will pay off but so far so good.</li>
</ul>


Uniqlo’s European arm is on a roll, with more stores, higher sales and a loyal fan base. 35% of customers were under 29 last year up from 16% in 2019.
Uniqlo is also doing better at home but it needs the boost from newer markets given concerns over growth in China.
And it is far too early to know whether GU's formal launch in the US will pay off but so far so good.


<ul>
<li>The Sep24 Nikkei 225 Review Results are out, discussed in <a href="https://www.smartkarma.com/insights/sep24-nikkei-225-review-results-a-slightly-baffling-2-in-2-out" target="_blank" data-smartkarma-citation="insights:157890" rel="noopener">Sep24 Nikkei 225 Review Results:  A Slightly Baffling 2 IN, 2 OUT</a>. </li>
<li>That lets us move to Mar25 Nikkei 225 Rebal predictions. For the moment, I see 2 IN and 2 OUT, again. </li>
<li>And at the moment, another Fast Retailing capping exercise looks likely, for roughly US$3bn a side to trade.</li>
</ul>


The Sep24 Nikkei 225 Review Results are out, discussed in Sep24 Nikkei 225 Review Results:  A Slightly Baffling 2 IN, 2 OUT. 
That lets us move to Mar25 Nikkei 225 Rebal predictions. For the moment, I see 2 IN and 2 OUT, again. 
And at the moment, another Fast Retailing capping exercise looks likely, for roughly US$3bn a side to trade.


Mar25 Nikkei 225 Rebal Predictions: Likely 2 IN, 2 OUT, Again; Minimal Surprise Factor

<ul>
<li>Domestic Uniqlo SSS (including e-commerce) were +14.9% in June. Positive</li>
<li>Impressive +8.1% increase in customer traffic and +6.3% gain in per-customer spend</li>
<li>I have a bearish view on Fast Retailing due to rich valuations (25x EV/EBIT). However, the share price may perform well in the run up to the Q3 report.</li>
</ul>


Domestic Uniqlo SSS (including e-commerce) were +14.9% in June. Positive
Impressive +8.1% increase in customer traffic and +6.3% gain in per-customer spend
I have a bearish view on Fast Retailing due to rich valuations (25x EV/EBIT). However, the share price may perform well in the run up to the Q3 report.


Japan

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.

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

Fast Retailing (9983 JP)

Fast Retailing(9983) | Weaving a Global Empire; FY8/25 Outlook

Fast Retailing's Uniqlo is redefining retail with high-quality apparel, strong profit margins, and global expansion plans driving significant...

Mark Chadwick

Mar25 Nikkei 225 Rebal: Considering Fast Retailing Capping.... Again...

Fast Retailing is the first Nikkei 225 stock to be capped. That meant nearly ¥400bn of selling yesterday. Now it is due to be capped again in 6...

Travis Lundy

Uniqlo’s European Romance

Uniqlo's European expansion has momentum with increased sales and a younger customer base, while growth in China remains uncertain and GU's US...

Michael Causton

Mar25 Nikkei 225 Rebal Predictions: Likely 2 IN, 2 OUT, Again; Minimal Surprise Factor

The Sep24 Nikkei 225 Review suggests Nikkei Index Committee "discretion" hinting at the scale of the next rebalance. The most interesting bit may...

Travis Lundy

Fast Retailing (9983) | Red Hot Summer

Domestic Uniqlo SSS up 14.9% in June, with strong customer traffic and per-customer spend. Bearish on Fast Retailing due to high valuations, but...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Fast Retailing(9983) | Weaving a Global Empire; FY8/25 Outlook

​Fast Retailing's Uniqlo is redefining retail with high-quality apparel, strong profit margins, and global expansion plans driving significant...

Mark Chadwick

Mar25 Nikkei 225 Rebal: Considering Fast Retailing Capping.... Again...

Fast Retailing is the first Nikkei 225 stock to be capped. That meant nearly ¥400bn of selling yesterday. Now it is due to be capped again in 6...

Travis Lundy

Uniqlo’s European Romance

​Uniqlo's European expansion has momentum with increased sales and a younger customer base, while growth in China remains uncertain and GU's US...

Michael Causton

Mar25 Nikkei 225 Rebal Predictions: Likely 2 IN, 2 OUT, Again; Minimal Surprise Factor

The Sep24 Nikkei 225 Review suggests Nikkei Index Committee "discretion" hinting at the scale of the next rebalance. The most interesting bit may...

Travis Lundy

Fast Retailing (9983) | Red Hot Summer

​Domestic Uniqlo SSS up 14.9% in June, with strong customer traffic and per-customer spend. Bearish on Fast Retailing due to high valuations, but...

Mark Chadwick

Fast Retailing's Uniqlo is redefining retail with high-quality apparel, strong profit margins, and global expansion plans driving significant...

Uniqlo's European expansion has momentum with increased sales and a younger customer base, while growth in China remains uncertain and GU's US...

Domestic Uniqlo SSS up 14.9% in June, with strong customer traffic and per-customer spend. Bearish on Fast Retailing due to high valuations, but...