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>Japan may have discovered home decoration and DIY later than some markets but it has made up for this with a convert’s enthusiasm. </li>
<li>In the last decade, the market has grown around 50% and a host of brands and retailers have flourished.</li>
<li>These include <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a>, <a href="https://www.smartkarma.com/entities/ryohin-keikaku-co-ltd" target="_blank" data-smartkarma-citation="entities:2765:1" rel="noopener">Ryohin Keikaku (7453 JP)</a> and the home centres like Cainz and <a href="https://www.smartkarma.com/entities/dcm-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:13042:1" rel="noopener">DCM Holdings (3050 JP). </a> The long-term outlook remains positive.</li>
</ul>


Japan may have discovered home decoration and DIY later than some markets but it has made up for this with a convert’s enthusiasm. 
In the last decade, the market has grown around 50% and a host of brands and retailers have flourished.
These include Nitori Holdings (9843 JP), Ryohin Keikaku (7453 JP) and the home centres like Cainz and DCM Holdings (3050 JP).  The long-term outlook remains positive.


Nitori, Muji Still Benefitting from a Flourishing Japan Home Decor Market

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>If Silchester's activism towards <a href="https://www.smartkarma.com/entities/shiga-bank-ltd" target="_blank" data-smartkarma-citation="entities:18665:1" rel="noopener">Shiga (8366 JP)</a> &amp; <a href="https://www.smartkarma.com/entities/chugoku-bank-ltd" target="_blank" data-smartkarma-citation="entities:11177:1" rel="noopener">Chugoku (8382 JP)</a> is going to be fought, it is going to be fought in the Japanese media, not in the AGM convocation. </li>
<li>The idea that the <a href="https://www.smartkarma.com/entities/agl-energy-ltd" target="_blank" data-smartkarma-citation="entities:554:1" rel="noopener">AGL Energy Ltd (AGL AU)</a> de-merger could be thwarted is something which could dampen spirits on the stock near-term</li>
<li>
<a href="https://www.smartkarma.com/entities/hitachi-transport-system-ltd" target="_blank" data-smartkarma-citation="entities:2395:1" rel="noopener">Hitachi Transport System (9086 JP)</a> as a risk arb situation is trading wide. It should trade tighter. </li>
</ul>


If Silchester's activism towards Shiga (8366 JP) &amp; Chugoku (8382 JP) is going to be fought, it is going to be fought in the Japanese media, not in the AGM convocation. 
The idea that the AGL Energy Ltd (AGL AU) de-merger could be thwarted is something which could dampen spirits on the stock near-term

Hitachi Transport System (9086 JP) as a risk arb situation is trading wide. It should trade tighter. 


Last Week in Event SPACE: Hitachi Transport, Shiga Bank, CP Food, AGL, Woodside/BHP, Yamada Denki

Travis Lundy

<ul>
<li>
<a href="https://www.smartkarma.com/entities/yamada-denki-co-ltd" target="_blank" data-smartkarma-citation="entities:641:1" rel="noopener">Yamada Denki (9831 JP)</a> reported <a href="https://www.yamada-holdings.jp/ir/kessan/2022/220506.pdf" target="_blank" rel="noopener">earnings</a> (Revs -7.6% (slight beat), OP -28.6% (slight miss), NP -2.4% (slight miss)), and slightly upbeat forecasts to Mar-2023 (Revs +4.6%, OP +12.5%, NP +2.9%) </li>
<li>They also <a href="https://www.yamada-holdings.jp/lang-en/pdf/press/220506_1e.pdf" target="_blank" rel="noopener">announced</a> an unchanged dividend at ¥18/share, and a VERY BIG BUYBACK. This is one of the largest, most aggressive, on-market buyback programs I have ever seen.</li>
<li>Previous buybacks have been duds. Yamada Denki is not playing around this time. This time it will be a buy.</li>
</ul>



Yamada Denki (9831 JP) reported earnings (Revs -7.6% (slight beat), OP -28.6% (slight miss), NP -2.4% (slight miss)), and slightly upbeat forecasts to Mar-2023 (Revs +4.6%, OP +12.5%, NP +2.9%) 
They also announced an unchanged dividend at ¥18/share, and a VERY BIG BUYBACK. This is one of the largest, most aggressive, on-market buyback programs I have ever seen.
Previous buybacks have been duds. Yamada Denki is not playing around this time. This time it will be a buy.


Yamada Denki - GINORMOUS Buyback To Dramatically Boost EPS and ROE

<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.


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/yamada-denki-co-ltd" target="_blank" data-smartkarma-citation="entities:641:1" rel="noopener">Yamada Denki (9831 JP)</a>’s recovery during the last two years went unnoticed as the market though that the recovery was a temporary thing driven by COVID-19.</li>
<li>The company’s OP has increased by more than 3.0x from the FY19 level but the share price is currently at ¥386.0 per share, 27% below the FY19 price.  </li>
<li>At ¥85.0bn regular OP, we think Yamada Denki should trade north of ¥660.0 per share, which suggests an upside of over 70%.</li>
</ul>



Yamada Denki (9831 JP)’s recovery during the last two years went unnoticed as the market though that the recovery was a temporary thing driven by COVID-19.
The company’s OP has increased by more than 3.0x from the FY19 level but the share price is currently at ¥386.0 per share, 27% below the FY19 price.  
At ¥85.0bn regular OP, we think Yamada Denki should trade north of ¥660.0 per share, which suggests an upside of over 70%.


Yamada Denki: 70+% Upside With 65% of The Medium Term OP Target

Japan

YAMADA DENKI CO., LTD. operates consumer electronic mass sales stores throughout Japan.  The Company sells home appliances, audio & visual systems, office automation equipment, telecommunication equipment, software, and computers. The Company also provides repair services for its merchandises.

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Yamada Denki (9831 JP)

Nitori, Muji Still Benefitting from a Flourishing Japan Home Decor Market

Japan's home decoration market grew fast in the pandemic but has been growing for 10 years and will continue to outperform other consumer...

Michael Causton

Last Week in Event SPACE: Hitachi Transport, Shiga Bank, CP Food, AGL, Woodside/BHP, Yamada Denki

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

Yamada Denki - GINORMOUS Buyback To Dramatically Boost EPS and ROE

Yamada Denki (9831) just announced better-than-consensus guidance, and a HUGE buyback implying a DPS hike. This will move a lot and will still be...

Travis Lundy

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

Yamada Denki: 70+% Upside With 65% of The Medium Term OP Target

Although, the company’s OP increased from ¥38.3bn in FY20 to ¥92.1bn in FY21, the share price movement suggests that the market is expecting this...

Oshadhi Kumarasiri

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