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)

<ul>
<li>As we have been tracking in recent months, the market for rapid home delivery of FMCG and food is hotting up, with much of the action at convenience stores.</li>
<li>The CVS sector was one of the hardest hit by the pandemic but with a network of 56,000 stores, there is an opportunity to use these stores as supply points.</li>
<li>CVS need to engage with delivery services given the growing number of firms creating their own dark store networks which compete with local supermarkets and CVS.</li>
</ul>


As we have been tracking in recent months, the market for rapid home delivery of FMCG and food is hotting up, with much of the action at convenience stores.
The CVS sector was one of the hardest hit by the pandemic but with a network of 56,000 stores, there is an opportunity to use these stores as supply points.
CVS need to engage with delivery services given the growing number of firms creating their own dark store networks which compete with local supermarkets and CVS.


Quick Commerce and Unmanned Stores Challenge Japanese Convenience Retailing

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

<ul>
<li>Among many e-commerce names, <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" data-smartkarma-citation="entities:15441:1" rel="noopener">MonotaRO Co Ltd (3064 JP)</a> is one of the most promising with operating profitability predicted to improve by 200 bps to 14.0% by 2023.</li>
<li>Unlike many e-commerce players, the company doesn’t strain itself financially while pursuing revenue growth through expansion.</li>
<li>At 35.8x OP, MonotaRo is not cheap to be outright bullish. However, it is a reasonable long hedge to allow you to short a lot of other names in e-commerce.</li>
</ul>


Among many e-commerce names, MonotaRO Co Ltd (3064 JP) is one of the most promising with operating profitability predicted to improve by 200 bps to 14.0% by 2023.
Unlike many e-commerce players, the company doesn’t strain itself financially while pursuing revenue growth through expansion.
At 35.8x OP, MonotaRo is not cheap to be outright bullish. However, it is a reasonable long hedge to allow you to short a lot of other names in e-commerce.


<ul>
<li>LINE Gift has doubled its user base to 20 million in a year, and added merchants like Seven Eleven, but isn’t content with this. </li>
<li>It has only just integrated with Zozo and Yahoo Shopping and expects these new partners, as well as new TV ad campaigns, to deliver a major increase in user numbers.</li>
<li>The collaboration with Z Holdings' through Yahoo Shopping and Zozo shows the potential for leveraging the groups' huge user base.</li>
</ul>


LINE Gift has doubled its user base to 20 million in a year, and added merchants like Seven Eleven, but isn’t content with this. 
It has only just integrated with Zozo and Yahoo Shopping and expects these new partners, as well as new TV ad campaigns, to deliver a major increase in user numbers.
The collaboration with Z Holdings' through Yahoo Shopping and Zozo shows the potential for leveraging the groups' huge user base.


Telco/Internet specialist

Kirk Boodry

Redex Research

<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

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)

Quick Commerce and Unmanned Stores Challenge Japanese Convenience Retailing

As we have been tracking in recent months, the market for rapid home delivery of FMCG and food is hotting up, with much of the action at...

Michael Causton

MonotaRo: A Rare Winner in E-Commerce

While most e-commerce players are fighting each other and the e-commerce arms of traditional businesses, MonotaRo operates in a niche with very...

Oshadhi Kumarasiri

LINE Gift: The Next Stage

LINE Gift has doubled its user base to 20 million in a year but has plans to grow much bigger and is a great example of the potential to leverage...

Michael Causton

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

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