'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Thematic (Sector/Industry)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/115/943/original/2020-02-01_07-00-20.png?1580599138" class="editor-image img-responsive" data-smartkarma-image-id="115943"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/115/944/original/2020-02-02_08-38-57.png?1580600364" class="editor-image img-responsive" data-smartkarma-image-id="115944"></figure><div class="content-caption">Source • Japan Analytics</div>30TH JANUARY ROUNDUP - The downward trends in both our Results Score and Forecast/Revision Scores that have been building all week are now more apparent last Friday. On the second-busiest day of this quarter's 'calendar', there were 407 results and 114 forecasts or revisions announcements. The Results Score declined by nine basis points to 0.68, the lowest since April 2017 while the Forecast/Revision Score fell by 15bps and was last this low in December 2016. The 'upside gap' between the market and both Scores is still larger than at any time since our data series commenced and needs to close further. The Bank of Japan bought ETFs on three days last week and will be back in action on Monday.<hr>• SECTOR TIMELINE •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/115/946/original/2020-02-02_09-01-27.png?1580601710" class="editor-image img-responsive" data-smartkarma-image-id="115946"></figure><div class="content-caption">Source • Japan Analytics</div>SECTOR TIMELINE - This quarter's Sector winners and losers are now emerging.  The former are lead by Banks, Non-Bank Finance, Machinery, Technology Hardware, and Electrical Equipment, with the losers being Transportation, Consumer Services, Healthcare, Utilities and Building Materials.  Of the top ten positive changes in all-cap Results Score on Friday, eight were in the financial sectors. A shift in earnings momentum leadership from consumer to finance and technology-related Sectors is in train.

Source • Japan Analytics30TH JANUARY ROUNDUP - The downward trends in both our Results Score and Forecast/Revision Scores that have been building all week are now more apparent last Friday. On the second-busiest day of this quarter's 'calendar', there were 407 results and 114 forecasts or revisions announcements. The Results Score declined by nine basis points to 0.68, the lowest since April 2017 while the Forecast/Revision Score fell by 15bps and was last this low in December 2016. The 'upside gap' between the market and both Scores is still larger than at any time since our data series commenced and needs to close further. The Bank of Japan bought ETFs on three days last week and will be back in action on Monday.• SECTOR TIMELINE •Source • Japan AnalyticsSECTOR TIMELINE - This quarter's Sector winners and losers are now emerging.  The former are lead by Banks, Non-Bank Finance, Machinery, Technology Hardware, and Electrical Equipment, with the losers being Transportation, Consumer Services, Healthcare, Utilities and Building Materials.  Of the top ten positive changes in all-cap Results Score on Friday, eight were in the financial sectors. A shift in earnings momentum leadership from consumer to finance and technology-related Sectors is in train.

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 31st January ►6861 ▲9433 8473 ▼3099 9062 4922

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. 

Equity Bottom-Up

Isetan Mitsukoshi Holdings Ltd / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/isetan-mitsukoshi-holdings-l" target="_blank" data-smartkarma-citation="entities:18871:1" rel="noopener">Isetan Mitsukoshi Holdings (3099 JP)</a>  continues to scrap-and-invest, closing down loss-making stores and investing solely in those stores that it believes have a long-term future.While there are still more stores in the group that should be disposed of, the upcoming closure of Mitsukoshi Niigata is a further sign of decisiveness, as is investment in the neighbouring Isetan Niigata.

Isetan Mitsukoshi Holdings (3099 JP)  continues to scrap-and-invest, closing down loss-making stores and investing solely in those stores that it believes have a long-term future.While there are still more stores in the group that should be disposed of, the upcoming closure of Mitsukoshi Niigata is a further sign of decisiveness, as is investment in the neighbouring Isetan Niigata.

¥5 Billion Investment for Isetan Niigata as Mitsukoshi Closes

<a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I's (3382 JP)</a> Sogo Seibu will undergo significant restructuring as part of the cull of Seven &amp; I’s poorest performing businesses.
The department store has slashed the number of stores in half since the 1990s with just 15 today, but five more will now close, with one more converted to a mall.
Other department stores have already earmarked 10 stores for closure in 2019, but Seven &amp; I’s decisiveness will encourage even more doors to shut.
Since 2008, 68 department stores have closed and sales of almost ¥2 trillion have been lost from the sector. After reaching a peak of 311 stores in 1999, the total number of stores will fall to 200 during 2020.
This is negative for sector growth but we continue to be optimistic about the remaining chains' potential to improve operating margins.

Seven &amp; I's (3382 JP) Sogo Seibu will undergo significant restructuring as part of the cull of Seven &amp; I’s poorest performing businesses.
The department store has slashed the number of stores in half since the 1990s with just 15 today, but five more will now close, with one more converted to a mall.
Other department stores have already earmarked 10 stores for closure in 2019, but Seven &amp; I’s decisiveness will encourage even more doors to shut.
Since 2008, 68 department stores have closed and sales of almost ¥2 trillion have been lost from the sector. After reaching a peak of 311 stores in 1999, the total number of stores will fall to 200 during 2020.
This is negative for sector growth but we continue to be optimistic about the remaining chains' potential to improve operating margins.

Seven & I: Sogo Seibu to Close 30% of Remaining Stores

The consumption tax was raised from 8% to 10% at the beginning of October, five years after the government reluctantly raised it from 5% to 8%.This time around, the lower, 2 point increase, backed by experience gained in 2014 and a much more confident retail industry as a whole, should all contribute to a smoother transition for the majority.Many businesses are expecting a relatively short and shallow spending downturn in the weeks to come.

The consumption tax was raised from 8% to 10% at the beginning of October, five years after the government reluctantly raised it from 5% to 8%.This time around, the lower, 2 point increase, backed by experience gained in 2014 and a much more confident retail industry as a whole, should all contribute to a smoother transition for the majority.Many businesses are expecting a relatively short and shallow spending downturn in the weeks to come.

Japan: Higher Consumption Tax Slides Smoothly into Place

As our review posted today of the department store sector makes clear (<a href="https://www.smartkarma.com/insights/japanese-department-stores-2018-19-taking-new-risks-creates-opportunity" target="_blank" rel="noopener">Japanese Department Stores 2018-19: Taking New Risks Creates Opportunity</a>), the sector overall continues to decline. The contraction is slowing but it will continue for at least the next decade.
This negative pall puts many investors off, perhaps not surprisingly given the poor consistency of performance among even the better operators.
However, within this contracting market are emerging signs of improved performance particularly in terms of extracting more sales per square metre and, in turn, improved profitability from each store. The leading four firms, <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><a href="https://www.smartkarma.com/entities/takashimaya-co-ltd" target="_blank" data-smartkarma-citation="entities:370:1" rel="noopener">Takashimaya (8233 JP),</a><a href="https://www.smartkarma.com/entities/isetan-mitsukoshi-holdings-l" target="_blank" data-smartkarma-citation="entities:18871:1" rel="noopener">Isetan Mitsukoshi Holdings L (3099 JP)</a> and Sogo Seibu (<a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> all have different strategies on how to achieve this. The following is a review of each of the big four.

As our review posted today of the department store sector makes clear (Japanese Department Stores 2018-19: Taking New Risks Creates Opportunity), the sector overall continues to decline. The contraction is slowing but it will continue for at least the next decade.
This negative pall puts many investors off, perhaps not surprisingly given the poor consistency of performance among even the better operators.
However, within this contracting market are emerging signs of improved performance particularly in terms of extracting more sales per square metre and, in turn, improved profitability from each store. The leading four firms, J Front Retailing (3086 JP), Takashimaya (8233 JP),Isetan Mitsukoshi Holdings L (3099 JP) and Sogo Seibu (Seven &amp; I Holdings (3382 JP) all have different strategies on how to achieve this. The following is a review of each of the big four.

Hell Will Freeze over And (Some) Japanese Department Stores Will Increase OPM

Japan

Isetan Mitsukoshi Holdings Ltd. is a holding company established through a merger of Mitsukoshi and Isetan. The group operates department stores nationwide, selling clothing, foods, household goods, cosmetics and general merchandise.

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Isetan Mitsukoshi Holdings Ltd (3099 JP)

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 31st January ►6861 ▲9433 8473 ▼3099 9062 4922

30TH JANUARY ROUNDUP - The downward trends in both our Results Score and Forecast/Revision Scores that have been building all week are now more...

Campbell Gunn

¥5 Billion Investment for Isetan Niigata as Mitsukoshi Closes

Isetan Mitsukoshi Holdings (3099 JP) continues to scrap-and-invest, closing down loss-making stores and investing solely in those stores that it...

Michael Causton

Seven & I: Sogo Seibu to Close 30% of Remaining Stores

Seven & I's (3382 JP) Sogo Seibu will undergo significant restructuring as part of the cull of Seven & I’s poorest performing...

Michael Causton

Japan: Higher Consumption Tax Slides Smoothly into Place

The consumption tax was raised from 8% to 10% at the beginning of October, five years after the government reluctantly raised it from 5% to 8%.This...

Michael Causton

Hell Will Freeze over And (Some) Japanese Department Stores Will Increase OPM

As our review posted today of the department store sector makes clear (Japanese Department Stores 2018-19: Taking New Risks Creates Opportunity),...

Michael Causton

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