'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Event-Driven

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/157/903/original/2020-09-09_10-14-19.png?1599614088" class="editor-image img-responsive" data-smartkarma-image-id="157903"></figure><div class="content-caption">Source for all charts: Japan Analytics</div>LISTED RESTAURANTS - Japan currently has 102 listed restaurant companies with an aggregate market value of ¥4.9 trillion, representing 2.6% of all listed companies and 0.9% of total market value. Only thirteen companies are capitalised at over ¥100 billion, and forty-one have a market value of less than ¥10 billion. The Sector is ripe for consolidation and COVID-19 should provide a catalyst for an acceleration of the process.  Both <a href="https://www.smartkarma.com/entities/create-restaurants-holdings-inc" target="_blank" data-smartkarma-citation="entities:11513:1" rel="noopener">create restaurants (3387 JP)</a>, and <a href="https://www.smartkarma.com/entities/colowide-co-ltd" target="_blank" data-smartkarma-citation="entities:13967:1" rel="noopener">Colowide (7616 JP)</a> have positioned themselves as consolidators, but have become highly leveraged in the process.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/157/917/original/File%202020-09-09%2010%2025%2051.jpeg?1599614981" class="editor-image img-responsive" data-smartkarma-image-id="157917"></figure>Also, the Sector is highly fragmented and segmented by type of food and concept. Only nineteen companies can be deemed 'diversified'. Furthermore, there are only five listed take-out/delivery specialists, of which <a href="https://www.smartkarma.com/entities/ride-on-express-co-ltd" target="_blank" data-smartkarma-citation="entities:2812:1" rel="noopener">Ride On Express (6082 JP)</a> has been the best performer. Overall, the Sector has declined by 3.6% over one year and by 3.2% over three months - a third quartile performance. Colowide's 31% rise over the last month has pushed the Sector into fourth place amongst our thirty market Sectors, fueled by the apparent success of the tender offer for <a href="https://www.smartkarma.com/entities/ootoya-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7329:1" rel="noopener">OOTOYA (2705 JP)</a>.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/157/928/original/2020-09-09_10-38-37.png?1599615530" class="editor-image img-responsive" data-smartkarma-image-id="157928"></figure>YUTAI KEN - One important consideration for investors to note is the widespread practice of offering kabunushi yutai-ken. In addition to dividends, shareholders are sent coupons that can be redeemed at most of the company's restaurants. Many specialist publications review such programs and offer stock recommendations based on the yutai-yield. As a result, restaurant companies in Japan have some of the highest shareholder counts among listed companies. As coupon-customers normally top-up their spending, this practice helps provide a basic level of cash flow but is a costly exercise to administer. However, there is the added benefit of limiting the number of shares for shorting.<a href="https://www.smartkarma.com/entities/yoshinoya-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:14630:1" rel="noopener"></a>100,000+ CLUB - <a href="https://www.smartkarma.com/entities/yoshinoya-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:14630:1" rel="noopener">Yoshinoya (9861 JP)</a>, <a href="https://www.smartkarma.com/entities/atom-corp" target="_blank" data-smartkarma-citation="entities:12420:1" rel="noopener">Atom (7412 JP)</a>, <a href="https://www.smartkarma.com/entities/zensho-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:4586:1" rel="noopener">Zensho (7550 JP)</a>, <a href="https://www.smartkarma.com/entities/kappa-create-co-ltd" target="_blank" data-smartkarma-citation="entities:19456:1" rel="noopener">Kappa Create (7421 JP)</a>, <a href="https://www.smartkarma.com/entities/komeda-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:24019:1" rel="noopener">Komeda (3543 JP)</a>, and <a href="https://www.smartkarma.com/entities/create-restaurants-holdings-inc" target="_blank" data-smartkarma-citation="entities:11513:1" rel="noopener">create (3387 JP)</a> are all in the top-fifty listed companies ranked by the number of shareholders. All exceed 100,000 shareholders -  beef-bowl chain Yoshiniya has 308,265 exceeding <a href="https://www.smartkarma.com/entities/mitsui-co-ltd" target="_blank" data-smartkarma-citation="entities:20799:1" rel="noopener">Mitsui (8031 JP)</a> which has twenty-four times the capitalisation.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/157/942/original/2020-09-09_11-15-31.png?1599617746" class="editor-image img-responsive" data-smartkarma-image-id="157942"></figure>In this DETAIL below, we shall review Colowide's long-term performance, returns and valuation and offer a view on the prospects for further consolidation. The Colowide group currently comprises of two listed chains - <a href="https://www.smartkarma.com/entities/kappa-create-co-ltd" target="_blank" data-smartkarma-citation="entities:19456:1" rel="noopener">Kappa Create (7421 JP)</a> and <a href="https://www.smartkarma.com/entities/atom-corp" target="_blank" data-smartkarma-citation="entities:12420:1" rel="noopener">Atom (7412 JP)</a> and the franchise chain Reins International which also operates in Asia and the US.

Source for all charts: Japan AnalyticsLISTED RESTAURANTS - Japan currently has 102 listed restaurant companies with an aggregate market value of ¥4.9 trillion, representing 2.6% of all listed companies and 0.9% of total market value. Only thirteen companies are capitalised at over ¥100 billion, and forty-one have a market value of less than ¥10 billion. The Sector is ripe for consolidation and COVID-19 should provide a catalyst for an acceleration of the process.  Both create restaurants (3387 JP), and Colowide (7616 JP) have positioned themselves as consolidators, but have become highly leveraged in the process.Also, the Sector is highly fragmented and segmented by type of food and concept. Only nineteen companies can be deemed 'diversified'. Furthermore, there are only five listed take-out/delivery specialists, of which Ride On Express (6082 JP) has been the best performer. Overall, the Sector has declined by 3.6% over one year and by 3.2% over three months - a third quartile performance. Colowide's 31% rise over the last month has pushed the Sector into fourth place amongst our thirty market Sectors, fueled by the apparent success of the tender offer for OOTOYA (2705 JP).YUTAI KEN - One important consideration for investors to note is the widespread practice of offering kabunushi yutai-ken. In addition to dividends, shareholders are sent coupons that can be redeemed at most of the company's restaurants. Many specialist publications review such programs and offer stock recommendations based on the yutai-yield. As a result, restaurant companies in Japan have some of the highest shareholder counts among listed companies. As coupon-customers normally top-up their spending, this practice helps provide a basic level of cash flow but is a costly exercise to administer. However, there is the added benefit of limiting the number of shares for shorting.100,000+ CLUB - Yoshinoya (9861 JP), Atom (7412 JP), Zensho (7550 JP), Kappa Create (7421 JP), Komeda (3543 JP), and create (3387 JP) are all in the top-fifty listed companies ranked by the number of shareholders. All exceed 100,000 shareholders -  beef-bowl chain Yoshiniya has 308,265 exceeding Mitsui (8031 JP) which has twenty-four times the capitalisation.In this DETAIL below, we shall review Colowide's long-term performance, returns and valuation and offer a view on the prospects for further consolidation. The Colowide group currently comprises of two listed chains - Kappa Create (7421 JP) and Atom (7412 JP) and the franchise chain Reins International which also operates in Asia and the US.

🇯🇵 Japan • Colowide (7616 JP) - A Bite Too Far

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

Haidilao International Holding / Equity Bottom-Up

Haidilao's upcoming IPO is lauded as one of the biggest IPO in 2018 and more importantly, it is a non-technology related business and domestic centric without any potential from being hurt by the ongoing trade war. In this note, we will discuss Haidilao's key strengths, related party transactions, the comparables and real competitors of Haidilao and growth strategy.

Haidilao's upcoming IPO is lauded as one of the biggest IPO in 2018 and more importantly, it is a non-technology related business and domestic centric without any potential from being hurt by the ongoing trade war. In this note, we will discuss Haidilao's key strengths, related party transactions, the comparables and real competitors of Haidilao and growth strategy. 

Haidilao IPO: Hotpot for the Flu from Trade War

Equity Analyst, LightStream Research

Chacko Jacob

Equity Analyst

<a href="https://www.smartkarma.com/entities/14630" target="_blank" data-smartkarma-citation="entities:14630:1">Yoshinoya Holdings (9861 JP)</a> is the second largest chain of beef bowl restaurants in Japan after <a href="https://www.smartkarma.com/entities/4586" target="_blank" data-smartkarma-citation="entities:4586:1">Zensho Holdings (7550 JP)</a> (Sukiya). The company has adopted a number of strategies in recent years to diversify its offerings and expand its overseas base. We look at some of these strategies and offer our outlook on the company. And since we already cover Zensho, we also provide our pick between the two.

Yoshinoya Holdings (9861 JP) is the second largest chain of beef bowl restaurants in Japan after Zensho Holdings (7550 JP) (Sukiya). The company has adopted a number of strategies in recent years to diversify its offerings and expand its overseas base. We look at some of these strategies and offer our outlook on the company. And since we already cover Zensho, we also provide our pick between the two.

Yoshinoya (9861 JP): Poor Returns From Overseas Investments Obscure Changes to Menu and Kitchen Tech

<h2>Company Background</h2>
<a href="https://www.smartkarma.com/entities/4586" target="_blank" data-smartkarma-citation="entities:4586:1">Zensho Holdings Co Ltd (7550 JP)</a> is the largest restaurant chain company in Japan with 19 brands spread across 5,000 locations. Zensho’s flagship chain Sukiya, which is also Japan’s leading gyudon (beef rice bowl) chain, operates 24hrs a day, 365 days a year. Aside from gyudons, the company’s other brands serve up udon, hamburger steaks, yakiniku and sushi, to name a few.
<div class="content-caption">Sales Composition in Percentage</div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/056/794/original/z1.png?1530670125" class="editor-image img-responsive" data-smartkarma-image-id="56794"></figure>
<div class="content-caption">Source: Company</div>
Zensho was incorporated in June 1982 and opened its first…

Company Background
Zensho Holdings Co Ltd (7550 JP) is the largest restaurant chain company in Japan with 19 brands spread across 5,000 locations. Zensho’s flagship chain Sukiya, which is also Japan’s leading gyudon (beef rice bowl) chain, operates 24hrs a day, 365 days a year. Aside from gyudons, the company’s other brands serve up udon, hamburger steaks, yakiniku and sushi, to name a few.
Sales Composition in Percentage

Source: Company
Zensho was incorporated in June 1982 and opened its first…

In the Land of Japanese Beef Bowls Zensho Could Be "Don"

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

TSE2-listed <a href="https://www.smartkarma.com/entities/5313" target="_blank" data-smartkarma-citation="entities:5313:1">SFP Dining Co Ltd (3198 JP)</a> is a company with 11 branded restaurant chains - ten "traditional Japanese" food themes (sushi, chicken, gyoza, etc) and a Spanish tapas bar-like chain - with a total of 214 restaurants. Over half the restaurants are in Tokyo with 90% of all restaurants in the Greater Tokyo Metropolitan Area and the remainder in the Kansai area (Osaka and Hyogo Prefecture). About two thirds of the restaurants are one brand of seafood restaurant, about 20% are the chicken…

TSE2-listed SFP Dining Co Ltd (3198 JP) is a company with 11 branded restaurant chains - ten "traditional Japanese" food themes (sushi, chicken, gyoza, etc) and a Spanish tapas bar-like chain - with a total of 214 restaurants. Over half the restaurants are in Tokyo with 90% of all restaurants in the Greater Tokyo Metropolitan Area and the remainder in the Kansai area (Osaka and Hyogo Prefecture). About two thirds of the restaurants are one brand of seafood restaurant, about 20% are the chicken…

SFP Holdings (3198) - BIG Buyback Means TSE1 Eligibility

Japan

RESORTTRUST, INC. plans, develops, markets, and operates timeshare resort hotels under the "XIV" and "SUN MEMBERS" brand name.  The Company's resort facilities are located in the suburb of major Japanese cities.  Resorttrust operates golf courses.

SAIZERIYA CO., LTD. operates an Italian restaurant chain based in the Tokyo metropolitan area.  The Company's menu includes pizza, pasta, seafood, and meat entrees.

Food & Life Companies Limited operates sushi restaurant chains. The Company operates kaiten sushi stores and restaurants, sushi takeout, sushi bars with snacks, and more. Food & Life Companies serves customers worldwide.

Skylark Co. Ltd. mainly operates a family restaurant chain across Japan.  The Company offers Japanese-style, Western-style, and Asia-style foods for a wide variety of targeted customer segments.  Skylark also sells food and provides delivery servies.

ROUND ONE Corporation operates bowling alleys and video game arcades.  The Company operates primarily in the Osaka area.

create restaurants holdings inc. operates direct-run Western, Chinese, and Japanese restaurants.  The Company also operates fast food restaurants.

create restaurants holdings inc. (3387 JP)

COLOWIDE CO., LTD. manages, as a holding company, its group companies that operate Japanese style pub restaurant chain named Kantaro and Italian restaurant chain named Itameshiya La Pausa primarily in Tokyo.  The Company also operates KARAOKE business.

YOSHINOYA HOLDINGS Co., Ltd. operates a fast food restaurant chain in Japan, the United States, Taiwan, China, and Singapore.  The Company mainly sells "gyudon" (seasoned beef over cooked rice).  Yoshinoya supplies food materials to franchise stores.  The Company also operates Japanese style fast food restaurants, curry restaurants, and revolving sushi restaurants.

KYORITSU MAINTENANCE CO., LTD operates student dormitories and dormitories for young businessmen throughout Japan.  The Company builds condominiums and dormitories.

FUJI KYUKO CO., LTD. provides passenger rail and bus transportation and taxi services in Shizuoka, Yamanashi, and Kanagawa prefectures.  The Company leases and sells real estate, operates department store, and offers construction works. Fuji Kyuko also operates amusement parks, hotels, golf course, skiing ground, restaurants, and other leisure-related businesses.

Domino's Pizza Enterprises Limited is a franchise licence owner of the Domino's Pizza. The Company sits in the quick service restaurant segment within fast food retail and has a license which covers Australia, New Zealand, France, Belgium, The Netherlands and the Principality of Monaco. The Domino's brand is owned by Domino's Pizza, Inc, a listed US company.

SJM Holdings Limited offers amusement and recreation services.  The Company operates casinos, hotels, and other tourism-related facilities in Macau.

Melco Resorts & Entertainment Limited develops, owns, and operates casinos. The Company offers casino gaming, restaurants, bars, and resorts facilities. Melco Resorts & Entertainment serves customers in Asia.

NagaCorp Limited is a leisure and tourism company with casino operations in Phnom Penh, the capital city of Cambodia. The Company also offers hotel accommodation, manages food and beverage outlets, recreational facilities, entertainmentand retail operations.

Kangwon Land Inc. is a casino and hotel services provider located in the Kangwon province area of South Korea.  The Company develops abandoned mines and builds gaming and entertainment facilities.  Kangwon Land operates a number of game tables and slot machines for domestic and international customers under its gaming licenses.

BTG Hotels (Group) Co., Ltd. operates a tourism business.  The Company also invests in hotel and restaurant management, as well as provides advertising and exhibition center management services.

Shenzhen Overseas Chinese Town Co Ltd invests in and manages theme parks in China.  The Company, through its subsidiaries, also provides travel agency service.

Shenzhen Overseas Chinese (A) (000069 CH)

Westlife Development Limited is an operating-cum-investment company that puts up and operates quick service restaurants. The Company, through its subsidiary, operates fast food franchise restaurants across western and southern India.

Bloomin' Brands Inc. owns and operates a chain of casual dining restaurants. The Company offers its products and services through company owned and franchised locations throughout the United States and internationally.

Bloomberry Resorts Corp is a holding company for its subsidiaries which provide lodging and leisure services. The Subsidiaries operates and develops, tourist facilities, casinos, and hotel and amusement-themed projects.

TORIDOLL Holdings Corporation operates a variety of restaurants such as skewered grill chicken, Japanese noodle, ramen noodle, Japanese-style pancake, and pasta restaurants.  The Company operates its business at food courts in shopping centers, stations, highway rest areas, and suburbs.

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TORIDOLL Holdings Corporation (3397 JP)

🇯🇵 Japan • Colowide (7616 JP) - A Bite Too Far

LISTED RESTAURANTS

Campbell Gunn

Haidilao IPO: Hotpot for the Flu from Trade War

Haidilao's upcoming IPO is lauded as one of the biggest IPO in 2018 and more importantly, it is a non-technology related business and domestic...

Henry Soediarko

Yoshinoya (9861 JP): Poor Returns From Overseas Investments Obscure Changes to Menu and Kitchen Tech

Yoshinoya Holdings (9861 JP) is the second largest chain of beef bowl restaurants in Japan after Zensho Holdings (7550 JP) (Sukiya). The company...

Chacko Jacob

In the Land of Japanese Beef Bowls Zensho Could Be "Don"

Company Background Zensho Holdings Co Ltd (7550 JP) is the largest restaurant chain company in Japan with 19 brands spread across 5,000 locations....

Chacko Jacob

SFP Holdings (3198) - BIG Buyback Means TSE1 Eligibility

TSE2-listed SFP Dining Co Ltd (3198 JP) is a company with 11 branded restaurant chains - ten "traditional Japanese" food themes (sushi, chicken,...

Travis Lundy

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