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>
<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> was down as much as 5% on Friday on weak FQ4 earnings as the company’s revenue and OP missed consensus by 1.9% and 2.6% respectively.</li>
<li>Earnings likely peaked in FQ3 as fuel retail margin and merchandise sales trend reversed in FQ4.</li>
<li>Given the reversal of fuel retail margin and merchandise sales trend and the negative impact of the exchange rate, the risk rewards appear favourable for a short trade.</li>
</ul>



Seven &amp; I Holdings (3382 JP) was down as much as 5% on Friday on weak FQ4 earnings as the company’s revenue and OP missed consensus by 1.9% and 2.6% respectively.
Earnings likely peaked in FQ3 as fuel retail margin and merchandise sales trend reversed in FQ4.
Given the reversal of fuel retail margin and merchandise sales trend and the negative impact of the exchange rate, the risk rewards appear favourable for a short trade.


Seven & I: Earnings Peak and Valuation Multiples Nearing Breaking Point

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS. Good Friday holidays. US Economy proving to be pretty resilient. Non-farm payrolls showed hiring continued to be strong in March. NFP was 236k vs Cons 230k. Telsa cuts prices(again)</li>
<li>JAPAN. NKY Futs +0.5% vs Cash as US Equity(Cash) markets closed. USDJPY 132.2. Likely see some beta led reversals of losses seen in the latter half of last week.</li>
<li>NUGGET.  Kuroda bids Farewell after 10 years as BOJ Governor. He created a new playbook on monetary policy that will be studied for years. Net-net, positive outcome.</li>
</ul>


OVERSEAS. Good Friday holidays. US Economy proving to be pretty resilient. Non-farm payrolls showed hiring continued to be strong in March. NFP was 236k vs Cons 230k. Telsa cuts prices(again)
JAPAN. NKY Futs +0.5% vs Cash as US Equity(Cash) markets closed. USDJPY 132.2. Likely see some beta led reversals of losses seen in the latter half of last week.
NUGGET.  Kuroda bids Farewell after 10 years as BOJ Governor. He created a new playbook on monetary policy that will be studied for years. Net-net, positive outcome.


Good Morning Japan |Jobs Galore - Strong NFP; Watch for the Fed Hawks; NUGGET: Kuroda Exits..a Hero?

<ul>
<li>OVERSEAS.  Bullard Calms Recession fears; SPX stabilizes; 2Yr Yields Rise: Non Farm Payrolls in Focus ahead of Good Friday Holidays </li>
<li>JAPAN. NKY Futs +0.5% vs Cash; USDJPY 131.7; ex-IMF Chief Economist Blanchard says BOJ to remain accomodative;  JP Corporates doubles buying of own stocks in 2022; Point 72 JP expansion</li>
<li>NUGGET.  KEPCO reconfirmed its plan to bring 2 addl Nuclear power plans online in a few months. The profit uptick will be considerable. We maintain KEPCO as a TOP PICK.</li>
</ul>


OVERSEAS.  Bullard Calms Recession fears; SPX stabilizes; 2Yr Yields Rise: Non Farm Payrolls in Focus ahead of Good Friday Holidays 
JAPAN. NKY Futs +0.5% vs Cash; USDJPY 131.7; ex-IMF Chief Economist Blanchard says BOJ to remain accomodative;  JP Corporates doubles buying of own stocks in 2022; Point 72 JP expansion
NUGGET.  KEPCO reconfirmed its plan to bring 2 addl Nuclear power plans online in a few months. The profit uptick will be considerable. We maintain KEPCO as a TOP PICK.


Good Morning Japan |Fed's Bullard Offers Comfort; NUGGET: Kansai Electric- Watch the Nuke Restarts !

<ul>
<li>OVERSEAS. SPX rose +0.4% lead by gains in Energy, which was well bid on OPEC+ surprise cut; ISM Manf  PMI print weaker; Rates retreat as US 2Yr dips below 4%</li>
<li>JAPAN. NKY Futs +0.1% vs Cash; USDJPY 132.4; BOJ Tankan reading points to weaker manufacturing; Potentially complicates BOJ exit; Activist ValueAct Presses Seven &amp; I </li>
<li>NUGGET. Watch FY3/24  Japan Total Payout Ratios - The Heat is On ! as JP Corporate significantly lags in Total Payout Ratios, while also sitting on ¥100 trn of cash.</li>
</ul>


OVERSEAS. SPX rose +0.4% lead by gains in Energy, which was well bid on OPEC+ surprise cut; ISM Manf  PMI print weaker; Rates retreat as US 2Yr dips below 4%
JAPAN. NKY Futs +0.1% vs Cash; USDJPY 132.4; BOJ Tankan reading points to weaker manufacturing; Potentially complicates BOJ exit; Activist ValueAct Presses Seven &amp; I 
NUGGET. Watch FY3/24  Japan Total Payout Ratios - The Heat is On ! as JP Corporate significantly lags in Total Payout Ratios, while also sitting on ¥100 trn of cash.


Good Morning Japan |Energy Leads SPX to Gains; NUGGET: Watch FY3/24 JP Payout Ratios-The Heat Is On!

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>Seven &amp; I will have its entire 7-11 chain online by 2025 and could use the service to bind all its food retail assets into a more coherent whole. </li>
<li>Rivals are doing the same thing through Uber Eats and other services, but Seven thinks its proprietary system will provide a long term advantage, especially in ease of use.</li>
<li>While Q-commerce deliveries from CVS are growing, the inherent proximity of stores to homes suggests an online adjunct is sub-optimal – but will be ideal for Seven's "new" SIP format.</li>
</ul>


Seven &amp; I will have its entire 7-11 chain online by 2025 and could use the service to bind all its food retail assets into a more coherent whole. 
Rivals are doing the same thing through Uber Eats and other services, but Seven thinks its proprietary system will provide a long term advantage, especially in ease of use.
While Q-commerce deliveries from CVS are growing, the inherent proximity of stores to homes suggests an online adjunct is sub-optimal – but will be ideal for Seven's "new" SIP format.


Seven & I Finally Making E-Commerce Work? 7Now at 5,000 Stores and Perfect for SIP

Japan

Seven & i Holdings Co., Ltd. is a holding company which was established through the merger of Ito-Yokado Co., Seven Eleven Japan Co., and Denny's Japan. The Company plans, manages, and operates mainly convenience stores, supermarkets, and department stores.

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Seven & I Holdings (3382 JP)

Seven & I: Earnings Peak and Valuation Multiples Nearing Breaking Point

We see a potential short opportunity with Seven & I as retail fuel margins are expected to decrease by around 22%, merchandise sales in US gas...

Oshadhi Kumarasiri

Good Morning Japan |Jobs Galore - Strong NFP; Watch for the Fed Hawks; NUGGET: Kuroda Exits..a Hero?

SDJPY 132.2, weaker post US Non Farm Payrolls. We are likely to see some beta-led reversals of losses observed in the latter half of last week....

Mark Chadwick

Good Morning Japan |Fed's Bullard Offers Comfort; NUGGET: Kansai Electric- Watch the Nuke Restarts !

Bullard Calms Markets; ex-IMF Chief Economist Blanchard says BOJ to remain accomodative; Japanese Corporates doubles buying of own stocks

Mark Chadwick

Good Morning Japan |Energy Leads SPX to Gains; NUGGET: Watch FY3/24 JP Payout Ratios-The Heat Is On!

Japan desires inflation, but not the cost input-driven type likely to result from OPEC+'s decision. Tankan manufacturing came in weaker...

Mark Chadwick

Seven & I Finally Making E-Commerce Work? 7Now at 5,000 Stores and Perfect for SIP

Seven & I may finally have turned the corner and found an e-commerce solution that works. If it has, the potential to roll it out beyond just the...

Michael Causton

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