Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Mercari reported full year operating loss of ¥3.7b on sales of ¥147b, while providing no guidance for the coming year </li>
<li>We remain most concerned about the US business, where GMV is declining and losses look entrenched </li>
<li>Mercari JP is also clearly slowing, partly due to post-Covid, but also due to rising competition  </li>
</ul>


Mercari reported full year operating loss of ¥3.7b on sales of ¥147b, while providing no guidance for the coming year 
We remain most concerned about the US business, where GMV is declining and losses look entrenched 
Mercari JP is also clearly slowing, partly due to post-Covid, but also due to rising competition  


Mercari (4385) | No Path to Profitability

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>Zozo recorded its highest profit ever last year, countering the sceptics once again. </li>
<li>The company has shrugged off the uncertainties surrounding the departure of its founder and, while sticking to its core values, is looking for new growth beyond fashion e-commerce.</li>
<li>While there are some headwinds, Zozo has a solid set of strategies in place to offset these and find new growth streams.</li>
</ul>


Zozo recorded its highest profit ever last year, countering the sceptics once again. 
The company has shrugged off the uncertainties surrounding the departure of its founder and, while sticking to its core values, is looking for new growth beyond fashion e-commerce.
While there are some headwinds, Zozo has a solid set of strategies in place to offset these and find new growth streams.


Zozo: Social Fashion Commerce, Omnichannel and New Ventures

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The TOPIX Free-Float Rebalance for July will be executed tomorrow at the close. </li>
<li>There should be about US$3.5bn to trade one-way with 150+ names down-weighted, 36 names up-weighted, and one inclusion - <a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari Inc (4385 JP)</a>.</li>
<li>The trade has performed well so far, and excess volume appears limited in most cases. It appears uncrowded.</li>
</ul>


The TOPIX Free-Float Rebalance for July will be executed tomorrow at the close. 
There should be about US$3.5bn to trade one-way with 150+ names down-weighted, 36 names up-weighted, and one inclusion - Mercari Inc (4385 JP).
The trade has performed well so far, and excess volume appears limited in most cases. It appears uncrowded.


TOPIX July Rebalance: Good Performance, Low Progression, Should Trade Right Way

<ul>
<li>Yamato Transport is Japan’s largest courier service, owning nearly 50% share, but even the biggest player needs to race to keep up with booming demand for e-commerce. </li>
<li>Over the past six years, it has gradually built an ecosystem of online tools and physical infrastructure to help vendors and customers, importing knowhow when needed.</li>
<li>So far, these measures have helped it stay on top of spiralling demand but there remain pressures.</li>
</ul>


Yamato Transport is Japan’s largest courier service, owning nearly 50% share, but even the biggest player needs to race to keep up with booming demand for e-commerce. 
Over the past six years, it has gradually built an ecosystem of online tools and physical infrastructure to help vendors and customers, importing knowhow when needed.
So far, these measures have helped it stay on top of spiralling demand but there remain pressures.


David Blennerhassett

<ul>
<li>Berkshire appears set to exit <strong><a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a></strong> partially or in full. But why signal to market well in advance?</li>
<li>
<strong><a href="https://www.smartkarma.com/entities/united-tractors-tbk-pt" target="_blank" data-smartkarma-citation="entities:698:1" rel="noopener">United Tractors (UNTR IJ)</a></strong>'s buyback should be impactful. They could do another one afterwards as they have lots of cash. This is a raging buy. Buy now. With both hands.</li>
<li>The BOJ was expected to change its ETF allocations. It stopped buying Nikkei 225 and JPX Nikkei 400 ETFs. As the world moves more to passive, expect float to decrease.</li>
</ul>


Berkshire appears set to exit BYD (1211 HK) partially or in full. But why signal to market well in advance?

United Tractors (UNTR IJ)'s buyback should be impactful. They could do another one afterwards as they have lots of cash. This is a raging buy. Buy now. With both hands.
The BOJ was expected to change its ETF allocations. It stopped buying Nikkei 225 and JPX Nikkei 400 ETFs. As the world moves more to passive, expect float to decrease.


Last Week in Event SPACE: BYD, Astra/United Tractor, Japan Passive, AGL, Genting Singapore

Japan

Mercari, Inc. operates as an electronic commercial company. The Company offers electronic commercial software, operation management, marketing planning, and other marketplace services. Mercari serves customers worldwide.

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Mercari (4385 JP)

Mercari (4385) | No Path to Profitability

Mercari's domestic marketplace growth is clearly slowing. The US looks a long way from profitability and is also losing customer traction. The...

Mark Chadwick

TOPIX July Rebalance: Good Performance, Low Progression, Should Trade Right Way

The JULY TOPIX FFW Rebalance is tomorrow (28 July) at the close. It is $3.5bn one-way and the top 10 sells are all quite large. Excellent LOC...

Travis Lundy

Yamato Builds Courier Ecosystem

Yamato Transport owns close to 50% of fulfilment in Japan and is so far managing to stay on top of demand through new ideas and a focus on reducing...

Michael Causton

Last Week in Event SPACE: BYD, Astra/United Tractor, Japan Passive, AGL, Genting Singapore

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

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52-week Range

Market Cap (USDm)

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Mercari (4385) | No Path to Profitability

Mercari's domestic marketplace growth is clearly slowing. The US looks a long way from profitability and is also losing customer traction. The...

Mark Chadwick

Zozo: Social Fashion Commerce, Omnichannel and New Ventures

Zozo continues to confound sceptics. Despite slowing e-commerce growth post-Covid, Zozo has solid strategies in place to continue to expand and...

Michael Causton

TOPIX July Rebalance: Good Performance, Low Progression, Should Trade Right Way

The JULY TOPIX FFW Rebalance is tomorrow (28 July) at the close. It is $3.5bn one-way and the top 10 sells are all quite large. Excellent LOC...

Travis Lundy

Yamato Builds Courier Ecosystem

Yamato Transport owns close to 50% of fulfilment in Japan and is so far managing to stay on top of demand through new ideas and a focus on reducing...

Michael Causton

Last Week in Event SPACE: BYD, Astra/United Tractor, Japan Passive, AGL, Genting Singapore

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett