Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Fast Retailing’s stock price is overvalued and faces downside risks from its Q3 results (maybe), China outlook (perhaps), and index rebalancing (most likely).</li>
<li>Fast Retailing has enjoyed a premium over its global peers largely due to its higher exposure to China growth. Any wobbles here could be negative catalyst</li>
<li>There is also a technical issue that will likely cap the weighting of Fast Retailing in the Nikkei 225 = index selling pressure</li>
</ul>


Fast Retailing’s stock price is overvalued and faces downside risks from its Q3 results (maybe), China outlook (perhaps), and index rebalancing (most likely).
Fast Retailing has enjoyed a premium over its global peers largely due to its higher exposure to China growth. Any wobbles here could be negative catalyst
There is also a technical issue that will likely cap the weighting of Fast Retailing in the Nikkei 225 = index selling pressure


Fast Retailing (9983) | Is China Still Recovering?

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.

<ul>
<li>Japan's strong domestic demand and a rebound in China fuel optimistic growth outlook for <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 short term.</li>
<li>Furthermore, the markets such as Europe, North America, South East Asia, India, and Australia present promising long-term growth opportunities.</li>
<li>However, Fast Retailing's valuation is a cause for concern as it currently trades at a consensus FY27 OP of 20.0x.</li>
</ul>


Japan's strong domestic demand and a rebound in China fuel optimistic growth outlook for Fast Retailing (9983 JP) in the short term.
Furthermore, the markets such as Europe, North America, South East Asia, India, and Australia present promising long-term growth opportunities.
However, Fast Retailing's valuation is a cause for concern as it currently trades at a consensus FY27 OP of 20.0x.


Fast Retailing: Opportunities for Long-Term Growth Overshadowed by High Valuation

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<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> announced Q2 earnings two weeks ago. Revenues were good. OP was good. And the company raised full-year forecasts for Sales, OP, Pre-tax, and Net Profit.</li>
<li>The stock popped sharply. It isn't "cheap" but it is under-owned, actively. And revenues up 20%yoy is a very good look.  </li>
<li>The Conundrum: the more active investors decide they like it, the more there is to sell. That creates interesting opportunities.
</li>
</ul>



Fast Retailing (9983 JP) announced Q2 earnings two weeks ago. Revenues were good. OP was good. And the company raised full-year forecasts for Sales, OP, Pre-tax, and Net Profit.
The stock popped sharply. It isn't "cheap" but it is under-owned, actively. And revenues up 20%yoy is a very good look.  
The Conundrum: the more active investors decide they like it, the more there is to sell. That creates interesting opportunities.



The Fast Retailing (9983) Selldown Conundrum - Not Now, But Soon... Then For A Long Time

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)

<ul>
<li>The following is an in-depth review of the Japanese retail sector in 2021-22 and is designed to provide a complete overview for any investor in Japanese retail/consumer markets.</li>
<li>FY2021-22 proved a rebound year for retailers at the sector level. But on a company by company basis, there has been radical divergence between the best and the rest. </li>
<li>We look at the reasons for this divergence and the implications for Japanese retail and consumer firms in the years ahead.</li>
</ul>


The following is an in-depth review of the Japanese retail sector in 2021-22 and is designed to provide a complete overview for any investor in Japanese retail/consumer markets.
FY2021-22 proved a rebound year for retailers at the sector level. But on a company by company basis, there has been radical divergence between the best and the rest. 
We look at the reasons for this divergence and the implications for Japanese retail and consumer firms in the years ahead.


Japanese Retailing 2021-22: What's Really Going on and What's Next?

<ul>
<li>It was reported yesterday that Uniqlo plans to continue doing business in Russia despite the Ukraine war situation.</li>
<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>’s decision to continue doing business in Russia has not gone too well with some of its customers.</li>
<li>If this leads to a fully blown boycott, the price impact could be significant as the company’s valuation remains towards the expensive side even after a 45% drop in valuation.</li>
</ul>


It was reported yesterday that Uniqlo plans to continue doing business in Russia despite the Ukraine war situation.

Fast Retailing (9983 JP)’s decision to continue doing business in Russia has not gone too well with some of its customers.
If this leads to a fully blown boycott, the price impact could be significant as the company’s valuation remains towards the expensive side even after a 45% drop in valuation.


Fast Retailing: Siding with Russia Could Be a Recipe for a Boycott

Japan

Nitori Holdings Co., Ltd., is based in Hokkaido and operates a furniture retail chain.  The Company sells living room furniture, storage furniture, dining furniture, office furniture, beds, and interior goods.  Nitori Holdings also sells original brand merchandise and imported merchandise.

ABC-MART, INC. plans, develops, wholesales, and retails shoes.  The Company also plans and develops brand name shoes such as VANS and G.T. HAWKINS.  ABC-Mart imports and wholesales shoes, apparel, bags, and sundries as well.

HIKARI TSUSHIN, INC. is a mobile telecommunication service subscription agency. The Company also operates telecommunication services stores, HIT SHOP, which sell cellular telephones, and related goods.  Hikari Tsushin also sells office automation equipment and insurance.

Sanrio Company, Ltd. manufactures and sells character goods including gift merchandise, greeting cards, and stationery products.  The Company also produces books, magazines, and movies, and though its subsidiary, operates restaurants and amusement parks.

USS CO LTD manages used car auction facilities throughout  Japan. The Company al so conducts auto auctions through satellites, and provides used car information through internet.

SHIMAMURA CO., Ltd. operates chain stores selling mainly clothing for men, women, children, and also bedding and furnishing goods.  The Company has stores in mainly suburb areas throughout Japan.

YAMADA DENKI CO., LTD. operates consumer electronic mass sales stores throughout Japan.  The Company sells home appliances, audio & visual systems, office automation equipment, telecommunication equipment, software, and computers. The Company also provides repair services for its merchandises.

WORKMAN CO., LTD. designs, produces, and retails work uniforms and related goods including work gloves and safety shoes.  The Company operates its own stores and franchise stores located throughout eastern Japan.

BIC CAMERA INC. operates electronic retail stores throughout Japan focusing on the Tokyo metropolitan area.  The Company sells audio and video equipments, electrical home appliances and telecommunication equipments.  Bic Camera also runs an Internet shopping site.

K'S HOLDINGS CORPORATION, based in Ibaraki prefecture, operates large scale electrical appliance store chain.  Franchise stores operates throughout Japan. The Company sells a variety of electrical appliances including refrigerators, washing machines, cooking appliances, computers, audio & visual systems, and air conditioners.

Dick's Sporting Goods, Inc. operates as a sporting goods retailer that manages stores primarily in the eastern and central United States. The Company owns stores that offers a broad selection of brand name sporting goods equipment, apparel, and footwear.

Burlington Stores, Inc. owns and operates clothing retail stores. The Company offers, through its stores and internet sites, men's, women's, and children's apparel. Burlington Holding operates within the United States and Puerto Rico.

Tractor Supply Company operates a retail farm store chain in the United States. The Company provides farm maintenance products, animal products, general maintenance products, lawn and garden products, light truck equipment, work clothing, and other products.  Customers include hobby, part-time, and full-time farmers and ranchers, as well as rural customers, contractors, and tradesman.

Lowe's Companies, Inc. is a home improvement retailer that distributes building materials and supplies through stores in the United States. The Company offers a complete line of products and services for home decorating, maintenance, repair, remodeling, and property maintenance.

Murphy USA Inc. produces and distributes petroleum products. The Company engages in refining, marketing, and transportation of oil and gas products. Murphy USA provides products and services worldwide.

O'Reilly Automotive, Inc. retails and supplies automotive aftermarket parts, tools, supplies, equipment, and accessories.  The Company sells its products to do-it-yourself customers and professional mechanics or service technicians. O'Reilly operates stores throughout the United States.

Ulta Beauty, Inc. operates a chain of beauty stores. The Company offers cosmetics, fragrance, skin, and hair care products, as well as salon services. Ulta Beauty serves customers throughout the United States.

Williams-Sonoma, Inc. retails cooking and serving equipment, home furnishings, and home accessories through retail stores, mail order catalogs and e-commerce. The Company offers its merchandise under the Williams-Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, and West Elm.

Hotai Motor Company Ltd. operates as an automobile dealership. The Company sells and services new and used cars and trucks in Taiwan.

GameStop Corporation operates specialty electronic game and PC entertainment software stores throughout the United States, Australia, Canada and Europe. The Company stores sell new and used video game hardware, video game software and accessories, as well as PC entertainment software, and related accessories and other merchandise.

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) | Is China Still Recovering?

Fast Retailing’s stock price is overvalued and faces downside risks from its Q3 results (maybe), China outlook (perhaps), and index rebalancing...

Mark Chadwick

Fast Retailing: Opportunities for Long-Term Growth Overshadowed by High Valuation

Markets such as Europe, North America, South East Asia, India, and Australia present promising long-term growth opportunities, but at a consensus...

Oshadhi Kumarasiri

The Fast Retailing (9983) Selldown Conundrum - Not Now, But Soon... Then For A Long Time

Fast Retailing has overhang. On a realtime basis, that disappears if FR underperforms Nikkei 225 by 2% in the next 3 months. But it comes back next...

Travis Lundy

Japanese Retailing 2021-22: What's Really Going on and What's Next?

There is increasing divergence between the winners and losers in Japanese retailing and the following in-depth review looks at performance in the...

Michael Causton

Fast Retailing: Siding with Russia Could Be a Recipe for a Boycott

Fast Retailing's decision to continue doing business in Russia could backfire badly, especially if the international community decides to boycott...

Oshadhi Kumarasiri

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