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)

<p>Only 35 new SCs are expected to open this year, the lowest number in more than two decades and five of these will be rebuilds of other shopping facilities. At the same time, the character of new malls is changing, with dining making up 24% of new sales last year, up nine points, and merchandise tenancies accounting for only just over half. There are serious implications for the wider retail industry, particularly fashion and lifestyle specialty chains.</p>

Only 35 new SCs are expected to open this year, the lowest number in more than two decades and five of these will be rebuilds of other shopping facilities. At the same time, the character of new malls is changing, with dining making up 24% of new sales last year, up nine points, and merchandise tenancies accounting for only just over half. There are serious implications for the wider retail industry, particularly fashion and lifestyle specialty chains.

Japan Shopping Mall Development Stalls in 2021

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Quantitative Analysis

<p>Since our Original on <a href="https://www.smartkarma.com/insights/asia-dividend-forecasting-the-rise-and-fall-of-dividends-across-asian-companies" target="_blank" data-smartkarma-citation="insights:43022" rel="noopener">Asia Dividend Forecasting | The Rise and Fall of Dividends Across Asian Companies</a>, published on Sep 30 2020, this is our first quarterly update. Our models take into account latest reported fiscal year-end financials to provide updated results. We also discuss companies where there is notable change in our conviction level based on updated data.</p>
<p>At the webinar in October, there was also a request for conducting price movement analysis corresponding to forward dividend growth/cut for our back-test results. This analysis is now available. Our results show a high correlation between price movements and dividend growth/cut, suggesting that users of our models will benefit from guiding their investment decisions based on dividend growth/cut outlook.</p>

Since our Original on Asia Dividend Forecasting | The Rise and Fall of Dividends Across Asian Companies, published on Sep 30 2020, this is our first quarterly update. Our models take into account latest reported fiscal year-end financials to provide updated results. We also discuss companies where there is notable change in our conviction level based on updated data.
At the webinar in October, there was also a request for conducting price movement analysis corresponding to forward dividend growth/cut for our back-test results. This analysis is now available. Our results show a high correlation between price movements and dividend growth/cut, suggesting that users of our models will benefit from guiding their investment decisions based on dividend growth/cut outlook.

Asia Dividend Forecasting | Quarterly Update 1.0

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.

Equity Bottom-Up

<p><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> delivered its 1QFY21 results on 14<sup>th</sup> Thursday with operating profit surpassing consensus estimate by more than 11%. However, the company’s 1QFY21 consolidated revenue was 2.5% below consensus. Despite mixed Q1 results, Fast Retailing's flexibility and resilience in the time of COVID is highly commendable as YoY revenue decline narrowed to just 0.6% YoY in 1QFY21 while operating profit improved by 23.3% YoY. With the FY+2 EV/OP multiple at 28.5x, 43% above the past three-year average, the market has generously compensated Fast Retailing for its commendable performance amidst COVID-19.</p>
<p>Though the company has maintained FY21 revenue and OP guidance at ¥2,200bn (4% below pre-pandemic revenue) and ¥245bn (8% below pre-pandemic OP) respectively, consensus revenue estimate is 5.5% above guidance while OP estimate is 9.7% above guidance, indicating that the market expects FY21 revenue and profitability to be above the pre-pandemic level.</p>
<p>On the surface, 1QFY21 revenue and OP growth indicate that everything is on track to meet FY21 consensus. However, this may not be entirely accurate as 1QFY20 was affected by the Hong Kong protests and the South Korea Boycott. Thus, Fast Retailing could be vulnerable to downside risks, if it fails to return revenue and profitability to the pre-pandemic level in FY21.</p>

Fast Retailing (9983 JP) delivered its 1QFY21 results on 14th Thursday with operating profit surpassing consensus estimate by more than 11%. However, the company’s 1QFY21 consolidated revenue was 2.5% below consensus. Despite mixed Q1 results, Fast Retailing's flexibility and resilience in the time of COVID is highly commendable as YoY revenue decline narrowed to just 0.6% YoY in 1QFY21 while operating profit improved by 23.3% YoY. With the FY+2 EV/OP multiple at 28.5x, 43% above the past three-year average, the market has generously compensated Fast Retailing for its commendable performance amidst COVID-19.
Though the company has maintained FY21 revenue and OP guidance at ¥2,200bn (4% below pre-pandemic revenue) and ¥245bn (8% below pre-pandemic OP) respectively, consensus revenue estimate is 5.5% above guidance while OP estimate is 9.7% above guidance, indicating that the market expects FY21 revenue and profitability to be above the pre-pandemic level.
On the surface, 1QFY21 revenue and OP growth indicate that everything is on track to meet FY21 consensus. However, this may not be entirely accurate as 1QFY20 was affected by the Hong Kong protests and the South Korea Boycott. Thus, Fast Retailing could be vulnerable to downside risks, if it fails to return revenue and profitability to the pre-pandemic level in FY21.

Fast Retailing: Upbeat Consensus Unlikely to Be Met in 2QFY21

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

<p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p><p>Thursday was the disclosure 'peak' for the November/February/May/August year-end group of companies. One-quarter of the companies reporting results yesterday were in the red, and average revenues are margins are still declining. Half of the large caps are reporting losses for the trailing twelve-month period. On a brighter note,  <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon (7751 JP)</a>, <a href="https://www.smartkarma.com/entities/nachi-fujikoshi-corp" target="_blank" data-smartkarma-citation="entities:9817:1" rel="noopener">Nachi Fujikoshi (6474 JP)</a>, and <a href="https://www.smartkarma.com/entities/agc-inc" target="_blank" data-smartkarma-citation="entities:2167:1" rel="noopener">AGC (5201 JP) </a>continued the trend of industrial upward revisions ahead of their imminent full-year results. Our best and worst pairing from Thursday's announcements is <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> and <a href="https://www.smartkarma.com/entities/create-restaurants-holdings-inc" target="_blank" data-smartkarma-citation="entities:11513:1" rel="noopener">create restaurants (3387 JP)</a>. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/182/603/original/2021-01-15_06-37-49.png?1610660282" class="editor-image img-responsive" data-smartkarma-image-id="182603"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/182/604/original/2021-01-15_06-38-33.png?1610660325" class="editor-image img-responsive" data-smartkarma-image-id="182604"></figure></section><div class="content-caption">Source for all charts &amp; tables: Japan Analytics.</div>

• BEST &amp; WORST •Thursday was the disclosure 'peak' for the November/February/May/August year-end group of companies. One-quarter of the companies reporting results yesterday were in the red, and average revenues are margins are still declining. Half of the large caps are reporting losses for the trailing twelve-month period. On a brighter note,  Canon (7751 JP), Nachi Fujikoshi (6474 JP), and AGC (5201 JP) continued the trend of industrial upward revisions ahead of their imminent full-year results. Our best and worst pairing from Thursday's announcements is Fast Retailing (9983 JP) and create restaurants (3387 JP). Source for all charts &amp; tables: Japan Analytics.

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​​​14 Fast, Create, Canon, AGC

<p style="text-align: center;"><strong>• BEST &amp; WORST • </strong></p><p style="text-align: left;">The retail theme continues in Monday's best and worst pairing - <a href="https://www.smartkarma.com/entities/shimamura-co-ltd" target="_blank" data-smartkarma-citation="entities:15213:1" rel="noopener">Shimamura (8227 JP)</a> and <a href="https://www.smartkarma.com/entities/j-front-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:8947:1" rel="noopener">J Front Retailing (3086 JP)</a>. The former is a 'sleeper' that has been unduly overlooked, while the latter's earnings momentum has turned negative again.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/180/324/original/2020-12-29_06-26-11.png?1609190783" class="editor-image img-responsive" data-smartkarma-image-id="180324"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/180/325/original/2020-12-29_06-27-27.png?1609190862" class="editor-image img-responsive" data-smartkarma-image-id="180325"></figure></section><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div>

• BEST &amp; WORST • The retail theme continues in Monday's best and worst pairing - Shimamura (8227 JP) and J Front Retailing (3086 JP). The former is a 'sleeper' that has been unduly overlooked, while the latter's earnings momentum has turned negative again.Source for all charts &amp; tables: Japan Analytics

🇯🇵 JAPAN • Results & Revisions 12/​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​28 -

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)

Japan Shopping Mall Development Stalls in 2021

The collapse in new shopping mall development in Japan does not just affect real estate developers but also the wider retail industry, especially...

Michael Causton

Asia Dividend Forecasting | Quarterly Update 1.0

We incorporate latest reported financial data to provide updated results for our Asia Dividend Forecasting models. We also ran an insightful price...

Ankit Agrawal, CFA

Fast Retailing: Upbeat Consensus Unlikely to Be Met in 2QFY21

Implied consensus revenue and OP growth for December 2020 to August 2021 period seem excessive, making an earnings miss or downgrade very likely in...

Oshadhi Kumarasiri

🇯🇵 JAPAN • Results & Revisions 01/14 Fast, Create, Canon, AGC

Thursday was the disclosure 'peak' for the November/February/May/August year-end group of companies. One-quarter of the companies reporting results...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 12/28 -

The retail theme continues in Monday's best and worst pairing - Shimamura (8227 JP) and J Front Retailing (3086 JP)._____

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Shopping Mall Development Stalls in 2021

The collapse in new shopping mall development in Japan does not just affect real estate developers but also the wider retail industry, especially...

Michael Causton

Asia Dividend Forecasting | Quarterly Update 1.0

We incorporate latest reported financial data to provide updated results for our Asia Dividend Forecasting models. We also ran an insightful price...

Ankit Agrawal, CFA

Fast Retailing: Upbeat Consensus Unlikely to Be Met in 2QFY21

Implied consensus revenue and OP growth for December 2020 to August 2021 period seem excessive, making an earnings miss or downgrade very likely in...

Oshadhi Kumarasiri

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​​​14 Fast, Create, Canon, AGC

Thursday was the disclosure 'peak' for the November/February/May/August year-end group of companies. One-quarter of the companies reporting results...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 12/​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​28 -

The retail theme continues in Monday's best and worst pairing - Shimamura (8227 JP) and J Front Retailing (3086 JP)._____

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 01/14 Fast, Create, Canon, AGC

🇯🇵 JAPAN • Results & Revisions 12/28 -