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. 

Equity Bottom-Up

<ul>
<li>Quick (Q)-commerce continues to grow, with rapid home delivery providing a new level of convenience to meet demand from busy, urban consumers.  </li>
<li>Z Holdings’ team of Yahoo, Askul and Demae-can have run what is now called Yahoo Mart since 2020 which has opened its first three retail stores, a new omnichannel model.</li>
<li>Given the data analysis and supply chain power of its backers, these stores could quickly become a thorn in the side of the big convenience store chains.</li>
</ul>


Quick (Q)-commerce continues to grow, with rapid home delivery providing a new level of convenience to meet demand from busy, urban consumers.  
Z Holdings’ team of Yahoo, Askul and Demae-can have run what is now called Yahoo Mart since 2020 which has opened its first three retail stores, a new omnichannel model.
Given the data analysis and supply chain power of its backers, these stores could quickly become a thorn in the side of the big convenience store chains.


Yahoo Mart's Q-Conbini Stores: A Potential Competitor to the Big 3 CVS?

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>As a follow-on to <a href="https://www.smartkarma.com/insights/topix-october-2022-rebal-big-names-with-big-flows" target="_blank" data-smartkarma-citation="insights:81835" rel="noopener">TOPIX October 2022 Rebal - BIG Names with BIG Flows</a> which discussed ¥2.1trln a side flows overall, this insight analyses and proposes intra-sector baskets.</li>
<li>In general, the sector-neutral BUYs vs SELLs baskets of all names where Index Shares change by 10% or more have seen BUYs sharply outperform SELLs in the past three weeks.</li>
<li>Look for pre-positioning unwinds so trading BUY vs SELL baskets which have bucked the trend, banks and chemicals - might be worthwhile. Otherwise, pick your spots. Use the flow.</li>
</ul>


As a follow-on to TOPIX October 2022 Rebal - BIG Names with BIG Flows which discussed ¥2.1trln a side flows overall, this insight analyses and proposes intra-sector baskets.
In general, the sector-neutral BUYs vs SELLs baskets of all names where Index Shares change by 10% or more have seen BUYs sharply outperform SELLs in the past three weeks.
Look for pre-positioning unwinds so trading BUY vs SELL baskets which have bucked the trend, banks and chemicals - might be worthwhile. Otherwise, pick your spots. Use the flow.


TOPIX October 2022 Rebal - Buy/Sell Baskets (May the Flow Be Ever In Your Favour)

Telco/Internet specialist

Kirk Boodry

Redex Research

<ul>
<li>The PayPay conversion is complete and management is focused on managing costs, which is reassuring for ZHD financial targets and for an eventual IPO</li>
<li>There was less said about the latter, however, whilst detail on the valuation gain that parent Softbank Corp needs to hit its own operating income target has not been confirmed</li>
<li>Our valuation of ¥500bn for PayPay looks more reasonable as 50-73% YTD declines in public comps have brought trading multiples in line (PayPay at 5x FY22e revenue versus 5-8x)</li>
</ul>


The PayPay conversion is complete and management is focused on managing costs, which is reassuring for ZHD financial targets and for an eventual IPO
There was less said about the latter, however, whilst detail on the valuation gain that parent Softbank Corp needs to hit its own operating income target has not been confirmed
Our valuation of ¥500bn for PayPay looks more reasonable as 50-73% YTD declines in public comps have brought trading multiples in line (PayPay at 5x FY22e revenue versus 5-8x)


Z Holdings / PayPay - A Focus on Margin Improvement as ZHD Moves to Consolidate

Thematic (Sector/Industry)

<ul>
<li>The Japan telecom and Internet companies in our coverage universe held ¥1,253bn in public equities as of Q2(Sep) largely built through capital alliances tied to business collaboration</li>
<li>NTT has the largest portfolio at c. ¥958bn (7% of market cap) followed by KDDI. Toyota (¥354bn) and JTower (three strategic telcos) are the largest and most widely held </li>
<li>The P&amp;L impact of valuation changes in Q2 should be muted. We have included tables for all the companies in our coverage</li>
</ul>


The Japan telecom and Internet companies in our coverage universe held ¥1,253bn in public equities as of Q2(Sep) largely built through capital alliances tied to business collaboration
NTT has the largest portfolio at c. ¥958bn (7% of market cap) followed by KDDI. Toyota (¥354bn) and JTower (three strategic telcos) are the largest and most widely held 
The P&amp;L impact of valuation changes in Q2 should be muted. We have included tables for all the companies in our coverage


Japan Telecoms/Internet - A Quick Look at Public Equity Portfolios

<ul>
<li>
<a href="https://www.smartkarma.com/entities/askul-corp" target="_blank" data-smartkarma-citation="entities:16807:1" rel="noopener">Askul Corp (2678 JP)</a> posted the best revenue growth in six quarters as both B2B and consumer product sales accelerated</li>
<li>The corresponding operating income decline of 10% is less welcome but that includes a front-loading of planned growth investments and full year guidance of 1% growth is unchanged</li>
<li>We are tagging this insight as bearish as headlines of a 10% OP decline might not be as well received as the top-line story </li>
</ul>



Askul Corp (2678 JP) posted the best revenue growth in six quarters as both B2B and consumer product sales accelerated
The corresponding operating income decline of 10% is less welcome but that includes a front-loading of planned growth investments and full year guidance of 1% growth is unchanged
We are tagging this insight as bearish as headlines of a 10% OP decline might not be as well received as the top-line story 


Askul Q1 23 Results Reaction: Solid Revenue but OP Down on Front-Loaded Investments

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)

Yahoo Mart's Q-Conbini Stores: A Potential Competitor to the Big 3 CVS?

All big 3 e-commerce firms in Japan now have an omnichannel model to win out in the next big fight for share: FMCG. Z Holdings' has been slower...

Michael Causton

TOPIX October 2022 Rebal - Buy/Sell Baskets (May the Flow Be Ever In Your Favour)

This companion piece to the first October 2022 FFW Rebalance piece shows both large (>¥5bn) and small (¥1-5bn) intra-sector flows. Using the flows...

Travis Lundy

Z Holdings / PayPay - A Focus on Margin Improvement as ZHD Moves to Consolidate

Z Holdings confirmed it is PayPay’s majority stake. An update on the business includes a stronger message improving the cost structure. Our PayPay...

Kirk Boodry

Japan Telecoms/Internet - A Quick Look at Public Equity Portfolios

Public equity portfolios in our coverage represent 3% of total market cap, driven by capital alliances tied to business collaboration. We thought...

Kirk Boodry

Askul Q1 23 Results Reaction: Solid Revenue but OP Down on Front-Loaded Investments

Askul posted the best revenue growth in six quarters but one-time growth investments drove corresponding OP down 10%. The good news is the rest of...

Kirk Boodry

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