Equity Analyst, LightStream Research

Supun Walpola

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

In our previous note, <a href="https://www.smartkarma.com/insights/z-holdings-1q-update-strong-gmv-growth-is-not-expected-to-last-longer-than-covid-19" target="_blank" data-smartkarma-citation="insights:41903" rel="noopener">Z Holdings 1Q Update: Strong GMV Growth Is Not Expected to Last Longer Than COVID-19</a>, we suggested that <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a>’s 1Q FY03/21 could be a temporary bump driven by strong stay-at-home demand and is unlikely to continue in the post-COVID-19 environment. We believe the market has accounted for this somewhat, although, Z’s FY2 consensus revenue growth expectations still seem slightly aggressive. Moreover, Z’s FY2 EV/OP is at a 5-year high, but we believe Z’s declining growth in a maturing Japanese e-commerce market does not justify this high valuation. We expect a correction in the next two years as growth falls below expectations.

In our previous note, Z Holdings 1Q Update: Strong GMV Growth Is Not Expected to Last Longer Than COVID-19, we suggested that Z Holdings (4689 JP)’s 1Q FY03/21 could be a temporary bump driven by strong stay-at-home demand and is unlikely to continue in the post-COVID-19 environment. We believe the market has accounted for this somewhat, although, Z’s FY2 consensus revenue growth expectations still seem slightly aggressive. Moreover, Z’s FY2 EV/OP is at a 5-year high, but we believe Z’s declining growth in a maturing Japanese e-commerce market does not justify this high valuation. We expect a correction in the next two years as growth falls below expectations.

Z Holdings: Aggressive Consensus + Expensive Valuation

When we last looked at <a href="https://www.smartkarma.com/entities/yahoo-japan-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Yahoo Japan (4689 JP)</a>, our main concern for the company was its long-term growth prospects or the lack of thereof. <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a>’s acquisition puts YJ in the familiar territory of M&amp;A led growth, however, YJ’s past track record with acquisitions remains a worry. That being said, it would be interesting to see how YJ would manage both “post-Maezawa Zozo” and “post-Iwata ASKUL”, and whether the two companies could live up to the synergies that have been promised. This coupled with some of the newer initiatives, such as the expansion of PayPay (the mobile payment platform), and the launch of PayPay Mall and PayPay Flea Market, should add some light to YJ’s growth prospects which looked rather dim at the end of last quarter. However, even with these developments, and reasonably attractive valuation (of 9x EV/OP compared to 15x EV/OP of <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a>), we find it challenging to put together a decent bullish thesis for YJ and would take a few more quarters of positive results to be least convinced.

When we last looked at Yahoo Japan (4689 JP), our main concern for the company was its long-term growth prospects or the lack of thereof. ZOZO Inc (3092 JP)’s acquisition puts YJ in the familiar territory of M&amp;A led growth, however, YJ’s past track record with acquisitions remains a worry. That being said, it would be interesting to see how YJ would manage both “post-Maezawa Zozo” and “post-Iwata ASKUL”, and whether the two companies could live up to the synergies that have been promised. This coupled with some of the newer initiatives, such as the expansion of PayPay (the mobile payment platform), and the launch of PayPay Mall and PayPay Flea Market, should add some light to YJ’s growth prospects which looked rather dim at the end of last quarter. However, even with these developments, and reasonably attractive valuation (of 9x EV/OP compared to 15x EV/OP of Rakuten Inc (4755 JP)), we find it challenging to put together a decent bullish thesis for YJ and would take a few more quarters of positive results to be least convinced.  

Yahoo Japan: Something Is Better Than Nothing?

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Event-Driven

<h2>THE BACKGROUND</h2><a href="https://www.smartkarma.com/entities/19603" target="_blank" data-smartkarma-citation="entities:19603">Yahoo Japan Corp</a>  (36.4% owned by Softbank and 35.5% owned by Yahoo Inc of the US) announced after the close today that it would launch a tender offer from December 16 to February 3 2016 to buy between 2/3 and 100% of <a href="https://www.smartkarma.com/entities/19139" target="_blank" data-smartkarma-citation="entities:19139">Ikyu Corp</a> , a leading Japanese online hotel, resort, and restaurant reservation booking network, at a 42% premium to last trade, spending JPY 100.2bn yen. President Masafumi Mori founded Ikyu's predecessor company 17yrs ago, launched ikyu.com in 2000, and owns 41.17%…

THE BACKGROUNDYahoo Japan Corp  (36.4% owned by Softbank and 35.5% owned by Yahoo Inc of the US) announced after the close today that it would launch a tender offer from December 16 to February 3 2016 to buy between 2/3 and 100% of Ikyu Corp , a leading Japanese online hotel, resort, and restaurant reservation booking network, at a 42% premium to last trade, spending JPY 100.2bn yen. President Masafumi Mori founded Ikyu's predecessor company 17yrs ago, launched ikyu.com in 2000, and owns 41.17%…

Japan

Ikyu Corporation provides online travel services for high end hotel, Japanese Inn reservation and restaurant reservation.  The Company also operates an auction website and a website that looks up conference and banquet rooms.

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

Ikyu Corp (2450 JP)

Z Holdings: Aggressive Consensus + Expensive Valuation

In our previous note, Z Holdings 1Q Update: Strong GMV Growth Is Not Expected to Last Longer Than COVID-19, we suggested that Z Holdings (4689...

Supun Walpola

Yahoo Japan: Something Is Better Than Nothing?

When we last looked at Yahoo Japan (4689 JP), our main concern for the company was its long-term growth prospects or the lack of thereof. ZOZO Inc...

Supun Walpola

Yahoo Japan to Buy Ikyu

THE BACKGROUNDYahoo Japan Corp (36.4% owned by Softbank and 35.5% owned by Yahoo Inc of the US) announced after the close today that it would...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)