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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ly-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">LY (4689 JP)</a>'s Yahoo Shopping looks to be in trouble after five straight quarters of negative growth while Amazon and Rakuten move ahead.</li>
<li>Despite a revenue increase in 4Q2023, Yahoo Shopping continues to struggle with merchant fraud and a lack of a clear USP.</li>
<li>If effective integration between the many parts of LY is not forthcoming soon, the company may eventually attract demands for better synergies, as well as a stick-wielding Softbank.</li>
</ul>



LY (4689 JP)'s Yahoo Shopping looks to be in trouble after five straight quarters of negative growth while Amazon and Rakuten move ahead.
Despite a revenue increase in 4Q2023, Yahoo Shopping continues to struggle with merchant fraud and a lack of a clear USP.
If effective integration between the many parts of LY is not forthcoming soon, the company may eventually attract demands for better synergies, as well as a stick-wielding Softbank.


Yahoo Still Falling Further Behind Amazon and Rakuten

Telco/Internet specialist

Kirk Boodry

Redex Research

<ul>
<li>Internet advertising revenue growth has come in below expectations for Google, Meta and CyberAgent as ad budgets appear to be shrinking</li>
<li>There is an indirect read-across to Z Holdings which has almost always posted slower ad growth although it has some insulation from volatility with eCommerce and LINE official accounts</li>
<li>Sill, management targets for ad revenue growth of 5-10% look increasingly challenging which is an issue when Media generates c. 80% of profitability. We remain cautious</li>
</ul>


Internet advertising revenue growth has come in below expectations for Google, Meta and CyberAgent as ad budgets appear to be shrinking
There is an indirect read-across to Z Holdings which has almost always posted slower ad growth although it has some insulation from volatility with eCommerce and LINE official accounts
Sill, management targets for ad revenue growth of 5-10% look increasingly challenging which is an issue when Media generates c. 80% of profitability. We remain cautious


Z Holdings (Neutral) - Quick Thoughts on the Read Across from Google, Meta, and CyberAgent

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>
<a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank Corp (9434 JP)</a> shares have underperformed telco peers that benefit from a risk-off environment despite a sector-high dividend payout as 38% of value comes from Internet and fintech</li>
<li>That dividend payout looks safe across our forecast period though as the telco business provides sufficient free cash and parent <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> can always use more cash</li>
<li>At Q3, management reiterated confidence in financial guidance through FY22 and a positive <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> Q4 report could help shares make up lost ground </li>
</ul>



Softbank Corp (9434 JP) shares have underperformed telco peers that benefit from a risk-off environment despite a sector-high dividend payout as 38% of value comes from Internet and fintech
That dividend payout looks safe across our forecast period though as the telco business provides sufficient free cash and parent Softbank Group (9984 JP) can always use more cash
At Q3, management reiterated confidence in financial guidance through FY22 and a positive Z Holdings (4689 JP) Q4 report could help shares make up lost ground 


Softbank Corp (Buy) - Growth/Value Hybrid Has Been Left Behind by Telco Peers

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>
<a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a> is currently trading 20% below the bottom end of the long term trend channel.</li>
<li>With consensus FY+2 EBITDA at ¥309.8bn, Rakuten’s current EV/EBITDA is at an all-time low of 1.7x compared to the historical median and peak of 9.0x and 16.1x respectively.</li>
<li>Based on the consensus FY+2 EBITDA and EV trend, we feel the fair valuation of Rakuten could be somewhere around ¥3,000bn EV.</li>
</ul>



Rakuten Inc (4755 JP) is currently trading 20% below the bottom end of the long term trend channel.
With consensus FY+2 EBITDA at ¥309.8bn, Rakuten’s current EV/EBITDA is at an all-time low of 1.7x compared to the historical median and peak of 9.0x and 16.1x respectively.
Based on the consensus FY+2 EBITDA and EV trend, we feel the fair valuation of Rakuten could be somewhere around ¥3,000bn EV.


Rakuten: At a New Forward EV/EBITDA Bottom

Japan

LY Corporation operates as an internet search engine "Yahoo! JAPAN". The Company provides electronic commerce and settlement finance services for small medium enterprises and individuals. LY also operates media business including search linked advertising and display advertising services.

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LY (4689 JP)

Yahoo Still Falling Further Behind Amazon and Rakuten

LY Corp's Yahoo Shopping faces challenges with negative growth in many recent quarters and lack of USP, risking pressure for better integration...

Michael Causton

Z Holdings (Neutral) - Quick Thoughts on the Read Across from Google, Meta, and CyberAgent

Industry ad revenue growth has disappointed which could put Z Holding's target of 5-10% growth at risk. Unique exposure to eCommerce monetization...

Kirk Boodry

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

Softbank Corp (Buy) - Growth/Value Hybrid Has Been Left Behind by Telco Peers

Softbank Corp has underperformed telco peers on tech exposure as Z Holdings is down 38% from recent highs. Despite that it still offers sector-high...

Kirk Boodry

Rakuten: At a New Forward EV/EBITDA Bottom

After falling 6% following Q4 earnings and 39% since March 2021 to ¥945 per share, Rakuten seems an attractive bet on the long side in the Japanese...

Oshadhi Kumarasiri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Yahoo Still Falling Further Behind Amazon and Rakuten

​LY Corp's Yahoo Shopping faces challenges with negative growth in many recent quarters and lack of USP, risking pressure for better integration...

Michael Causton

Z Holdings (Neutral) - Quick Thoughts on the Read Across from Google, Meta, and CyberAgent

Industry ad revenue growth has disappointed which could put Z Holding's target of 5-10% growth at risk. Unique exposure to eCommerce monetization...

Kirk Boodry

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

Softbank Corp (Buy) - Growth/Value Hybrid Has Been Left Behind by Telco Peers

Softbank Corp has underperformed telco peers on tech exposure as Z Holdings is down 38% from recent highs. Despite that it still offers sector-high...

Kirk Boodry

Rakuten: At a New Forward EV/EBITDA Bottom

After falling 6% following Q4 earnings and 39% since March 2021 to ¥945 per share, Rakuten seems an attractive bet on the long side in the Japanese...

Oshadhi Kumarasiri

LY Corp's Yahoo Shopping faces challenges with negative growth in many recent quarters and lack of USP, risking pressure for better integration...