Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Fast Retailing delivered an impressive Q3 report. Sales +10% YoY were +3% above our expectations. </li>
<li>Big jump in profitability. OP +31% YoY to Y145b driven by +57% jump in Uniqlo Japan earnings. Record consolidated OPM ~19% </li>
<li>Uniqlo's performance is leaving global peers in its wake. Profitability now rivalling Inditex. However, valuations remain at a premium</li>
</ul>


Fast Retailing delivered an impressive Q3 report. Sales +10% YoY were +3% above our expectations. 
Big jump in profitability. OP +31% YoY to Y145b driven by +57% jump in Uniqlo Japan earnings. Record consolidated OPM ~19% 
Uniqlo's performance is leaving global peers in its wake. Profitability now rivalling Inditex. However, valuations remain at a premium


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Yesterday after the close, <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> reported salutary Q3 earnings, and raised its full-year (to August) guidance and its final dividend forecast (by ¥50/share)</li>
<li>Q3 revenue and profit gained sharply (Rev +13.5%, OP +31.2%) everywhere but Greater China. OPMs were up, especially in Japan. Early summer has been good, despite FX impact. </li>
<li>New guidance is above consensus, the ADR popped, and with slightly stronger yen on US CPI, that should help. But we approach end-July. Expect lots of pop-sellers.</li>
</ul>


Yesterday after the close, Fast Retailing (9983 JP) reported salutary Q3 earnings, and raised its full-year (to August) guidance and its final dividend forecast (by ¥50/share)
Q3 revenue and profit gained sharply (Rev +13.5%, OP +31.2%) everywhere but Greater China. OPMs were up, especially in Japan. Early summer has been good, despite FX impact. 
New guidance is above consensus, the ADR popped, and with slightly stronger yen on US CPI, that should help. But we approach end-July. Expect lots of pop-sellers.


Fast Retailing (9983) - Great (Bte) Earnings Now Out of The Way; Anticipating End-July Capping Data

<ul>
<li>Fast Retailing is due to report Q3 results on 11 July. We update our views on the outlook for the stock heading into the announcement.</li>
<li>Uniqlo Japan has already released monthly sales data for the March to May quarter. Performance in May was again strong, slightly surpassing our estimates</li>
<li>We maintain our full year earnings estimates. The stock has declined by around 6% since Q2 results, but remains fully valued.</li>
</ul>


Fast Retailing is due to report Q3 results on 11 July. We update our views on the outlook for the stock heading into the announcement.
Uniqlo Japan has already released monthly sales data for the March to May quarter. Performance in May was again strong, slightly surpassing our estimates
We maintain our full year earnings estimates. The stock has declined by around 6% since Q2 results, but remains fully valued.


Fast Retailing (9983) | Positive Q3 Outlook, but Priced In

Derivatives and Quantitative Strategist

Gaudenz Schneider

<ul>
<li>This strategy exploits relative value in implied volatilities and combines it with a long Nifty 50 vs. short Nikkei 225 directional view over a period of two months.</li>
<li>The strategy performs well if the Nifty 50 rises <em>and</em> outperforms the Nikkei 225. If both indices decline, neither profit nor loss is incurred.</li>
<li>Leverage increases both the strategy's payoff and probability of success.</li>
</ul>


This strategy exploits relative value in implied volatilities and combines it with a long Nifty 50 vs. short Nikkei 225 directional view over a period of two months.
The strategy performs well if the Nifty 50 rises and outperforms the Nikkei 225. If both indices decline, neither profit nor loss is incurred.
Leverage increases both the strategy's payoff and probability of success.


EQD | Long Nifty 50 Vs. Short Nikkei 225 - A Relative Value Option Strategy with a Kicker

<ul>
<li>
<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> today announced better than guided results, and 10% revenue growth, 18% OP growth to August 2024. NP is light, but still well higher than street consensus.</li>
<li>At 10.37% Nikkei 225 weight, it is still above the target for 31 July 2024. If it does not underperform Nikkei 225 between now and then, US$2bn to sell end-Sep24.</li>
<li>If people like the growthiness, that can be absorbed. But if the stock were to go up 10% vs Nikkei, there'd be US$2bn, then maybe another US$2bn to sell. </li>
</ul>



Fast Retailing (9983 JP) today announced better than guided results, and 10% revenue growth, 18% OP growth to August 2024. NP is light, but still well higher than street consensus.
At 10.37% Nikkei 225 weight, it is still above the target for 31 July 2024. If it does not underperform Nikkei 225 between now and then, US$2bn to sell end-Sep24.
If people like the growthiness, that can be absorbed. But if the stock were to go up 10% vs Nikkei, there'd be US$2bn, then maybe another US$2bn to sell. 


Fast Retailing (9983) Beats Guidance, Stronger Forecasts, STILL Has a Nikkei 225 Problem

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.

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Fast Retailing (9983 JP)

Fast Retailing (9983) | Q3 Masterclass

Fast Retailing reported an 8.1% year-on-year increase in domestic same-store sales for UNIQLO in July, marking four consecutive months of growth....

Mark Chadwick

Fast Retailing (9983) - Great (Bte) Earnings Now Out of The Way; Anticipating End-July Capping Data

Fast Retailing reported great Q3 and 9mo results yesterday after the close. Revenue up, OP up, inventory problems being dealt with, higher...

Travis Lundy

Fast Retailing (9983) | Positive Q3 Outlook, but Priced In

H&M reported Q2 results with sales growth +3% and gross profits +11% YoY. Inditex, which reported a month earlier, saw sales +7% YoY. Both...

Mark Chadwick

EQD | Long Nifty 50 Vs. Short Nikkei 225 - A Relative Value Option Strategy with a Kicker

Option strategy: exploit relative value in implied volatilities combined with directional positioning for a leveraged payoff in a long Nifty 50 vs....

Gaudenz Schneider

Fast Retailing (9983) Beats Guidance, Stronger Forecasts, STILL Has a Nikkei 225 Problem

Fast Retailing beat its guidance and consensus forecasts, and guidance to Aug 2024 is ahead of consensus by a ways. But the stock still has a...

Travis Lundy

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