Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>The pending IPO of Rakuten Bank could be worth ¥380bn (2x book) and boosts appreciation of a fintech business we think is worth ¥1,400/share</li>
<li>That is well above the current share price reflecting the valuation drag of an expensive mobile segment, which is expected to hit peak losses in Q1 22</li>
<li>We expect mobile break-even will take longer than expected and downside here offsets fintech excitement - we remain at Neutral</li>
</ul>


The pending IPO of Rakuten Bank could be worth ¥380bn (2x book) and boosts appreciation of a fintech business we think is worth ¥1,400/share
That is well above the current share price reflecting the valuation drag of an expensive mobile segment, which is expected to hit peak losses in Q1 22
We expect mobile break-even will take longer than expected and downside here offsets fintech excitement - we remain at Neutral


Rakuten Group (Neutral) - Bank IPO a Step Towards Unlocking Fintech but Mobile Worries Remain

<ul>
<li>Q3 22 results were in-line/ahead of consensus expectations but shares fell 7% today anyway</li>
<li>Operating profit fell 10% as improvements in operating losses for new businesses like Lohaco and logistics were not enough to make up for higher spending in the core B2B segment</li>
<li>Despite the decline, Askul shares have largely outperformed peers YTD on optimism over the planned launch of quick commerce business Yahoo!Mart announced in late January</li>
</ul>


Q3 22 results were in-line/ahead of consensus expectations but shares fell 7% today anyway
Operating profit fell 10% as improvements in operating losses for new businesses like Lohaco and logistics were not enough to make up for higher spending in the core B2B segment
Despite the decline, Askul shares have largely outperformed peers YTD on optimism over the planned launch of quick commerce business Yahoo!Mart announced in late January


Askul Corp - Q3 22 Results Reaction: Margin Concerns Hold Back Shares Despite Beat

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/sre-holdings-corp" target="_blank" data-smartkarma-citation="entities:29672:1" rel="noopener">SRE Holdings Corp (2980 JP)</a> last week announced an offering of new shares and a secondary share sale by <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> of the bulk of its holdings.</li>
<li>The Z Holdings sale coincides with a "new business alliance" between SRE and Yahoo. At first glance, it appears as if both sides have decided to rejig what they do.</li>
<li>SRE has an interesting business model which is quite growthy. It is growthier than it planned and others expected, but the stock has fallen 70% in 3mos. It's a buy.</li>
</ul>



SRE Holdings Corp (2980 JP) last week announced an offering of new shares and a secondary share sale by Z Holdings (4689 JP) of the bulk of its holdings.
The Z Holdings sale coincides with a "new business alliance" between SRE and Yahoo. At first glance, it appears as if both sides have decided to rejig what they do.
SRE has an interesting business model which is quite growthy. It is growthier than it planned and others expected, but the stock has fallen 70% in 3mos. It's a buy.


SRE Holdings (2980 JP) Offering - New Higher Growth at New Lower Multiple

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. 

<ul>
<li>LINE Gift is fast becoming the most popular way to send gifts of all kinds, even traditional gifts sent at mid-year and New Year. </li>
<li>This is good news for <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> and Softbank, as well as LINE, as the gifting platform acts as a unifying point for their disparate e-commerce platforms.</li>
<li>Although the corporate gift market is in decline, personal gift giving remains a growth market, offering further upside.</li>
</ul>


LINE Gift is fast becoming the most popular way to send gifts of all kinds, even traditional gifts sent at mid-year and New Year. 
This is good news for Z Holdings (4689 JP) and Softbank, as well as LINE, as the gifting platform acts as a unifying point for their disparate e-commerce platforms.
Although the corporate gift market is in decline, personal gift giving remains a growth market, offering further upside.


Thematic (Sector/Industry)

<ul>
<li>This is an in-depth review of Japanese e-commerce in the last 18 months, a time when e-commerce expanded rapidly and by 2023, e-commerce will be Japan’s single biggest retail channel.</li>
<li>We are now riding a wave of change as retailers integrate the e-commerce channel into their businesses, increasingly approaching a true omnichannel model.</li>
<li>And this is important in Japan because, although e-commerce penetration appears low, this overlooks the importance, convenience and ease of access to physical shops and integration with online.</li>
</ul>


This is an in-depth review of Japanese e-commerce in the last 18 months, a time when e-commerce expanded rapidly and by 2023, e-commerce will be Japan’s single biggest retail channel.
We are now riding a wave of change as retailers integrate the e-commerce channel into their businesses, increasingly approaching a true omnichannel model.
And this is important in Japan because, although e-commerce penetration appears low, this overlooks the importance, convenience and ease of access to physical shops and integration with online.


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)

Rakuten Group (Neutral) - Bank IPO a Step Towards Unlocking Fintech but Mobile Worries Remain

We take a closer look at Rakuten Bank including a financial history but mobile remains the primary sentiment driver and steeper losses are a drag...

Kirk Boodry

Askul Corp - Q3 22 Results Reaction: Margin Concerns Hold Back Shares Despite Beat

Q3 22 results were largely as expected but concerns on near-term margins after a 22% decline in core B2B segment operating income may be weighing...

Kirk Boodry

SRE Holdings (2980 JP) Offering - New Higher Growth at New Lower Multiple

SRE and Yahoo are re-jigging their business tie-up, and Yahoo is selling most of its shares in SRE. Shares are down 70% from 14 weeks ago. That's...

Travis Lundy

LINE Gift up 330% in 2021

LINE Gift is growing faster than any other e-commerce platform and is testament to the potential synergies across Z Holdings. Much more can be done...

Michael Causton

E-Commerce in Japan: The Big Review

Japan's e-commerce sector expanded rapidly in the last 18 months. The following is a complete review and analysis of the major trends as well as...

Michael Causton

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