Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>The core eCommerce and Fintech segments posted good results for the quarter but that will certainly get lost in the discussion on mobile</li>
<li>Mobile operating losses exceeded $1bn in Q4 and whilst management is guiding to losses bottoming out in Q1 22, the magnitude of improvements remains undefined</li>
<li>Rakuten Mobile capex is on par with incumbents and will remain unchanged in FY22</li>
</ul>


The core eCommerce and Fintech segments posted good results for the quarter but that will certainly get lost in the discussion on mobile
Mobile operating losses exceeded $1bn in Q4 and whilst management is guiding to losses bottoming out in Q1 22, the magnitude of improvements remains undefined
Rakuten Mobile capex is on par with incumbents and will remain unchanged in FY22


Rakuten (Neutral) - Q4 21 Results Reaction: Hard to Look past Mobile Losses

<ul>
<li>Results were pretty much in line with expectations as growth from Z Holdings and Enterprise sales offset consumer mobile weakness.</li>
<li>The company is slightly behind the pace needed to meet its full-year operating profit target but appears confident on meeting FY21 and FY22 commitments</li>
<li>Management reports that cashless app PayPay generated ¥21bn in Q3 revenue as SME monetization kicked in</li>
</ul>


Results were pretty much in line with expectations as growth from Z Holdings and Enterprise sales offset consumer mobile weakness.
The company is slightly behind the pace needed to meet its full-year operating profit target but appears confident on meeting FY21 and FY22 commitments
Management reports that cashless app PayPay generated ¥21bn in Q3 revenue as SME monetization kicked in


Softbank Corp (Buy) - Q3 21 Results Reaction: Weak Consumer Mobile but FY Targets in Sight

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<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> today announced a 4.9% buyback, likely via ToSTNeT-3, designed to lower the holding of parent <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a>, to meet TSE Prime Tradable Share criteria.</li>
<li>While 5.1% earnings accretive, it will not be enough, and the structure suggests despite significant excess cash, the next tranche won't come immediately.</li>
<li>There is short-term strategy, and there is longer-term positioning. Both may work in this case.</li>
</ul>



Askul Corp (2678 JP) today announced a 4.9% buyback, likely via ToSTNeT-3, designed to lower the holding of parent Z Holdings (4689 JP), to meet TSE Prime Tradable Share criteria.
While 5.1% earnings accretive, it will not be enough, and the structure suggests despite significant excess cash, the next tranche won't come immediately.
There is short-term strategy, and there is longer-term positioning. Both may work in this case.


ASKUL (2678) - Large, Accretive, Not Enough for Prime So Look For More

<ul>
<li>Q3 21 in-line for revenue but well ahead for EBITDA on solid advertising growth leading to an upgrade in management's full-year EBITDA target.</li>
<li>Operational results were encouraging with double-digit gains in ad sales and 7% eCommerce growth despite strong year-ago comps.</li>
<li>Impairment losses for equity associate Demae-Can sting but the overall story is positive.</li>
</ul>


Q3 21 in-line for revenue but well ahead for EBITDA on solid advertising growth leading to an upgrade in management's full-year EBITDA target.
Operational results were encouraging with double-digit gains in ad sales and 7% eCommerce growth despite strong year-ago comps.
Impairment losses for equity associate Demae-Can sting but the overall story is positive.


Z Holdings (Buy) Q3 21 Results Reaction: Mostly Positive as Ad Sales Continues to Impress

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>
<a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a> and <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a> are in a battle for share in online fashion with both companies increasingly aping the other to attract both merchants and consumers. </li>
<li>
<a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a> and <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a> aren’t standing still either but the competitive pressures between Rakuten and Zozo may put them ahead of their rivals.</li>
<li>This competitive edge now encompasses both physical stores and online platforms for physical retailers, with the aim to bind them ever closer to the platform.</li>
</ul>



Rakuten Inc (4755 JP) and ZOZO Inc (3092 JP) are in a battle for share in online fashion with both companies increasingly aping the other to attract both merchants and consumers. 

Amazon.com Inc (AMZN US) and Z Holdings (4689 JP) aren’t standing still either but the competitive pressures between Rakuten and Zozo may put them ahead of their rivals.
This competitive edge now encompasses both physical stores and online platforms for physical retailers, with the aim to bind them ever closer to the platform.


Platforms Add Merchant Support as Japan's Online Fashion Wars Move Offline

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)

Rakuten (Neutral) - Q4 21 Results Reaction: Hard to Look past Mobile Losses

Rakuten’s mobile business is losing a billion dollars per quarter and capital spending is higher than incumbents. That is going to obscure solid...

Kirk Boodry

Softbank Corp (Buy) - Q3 21 Results Reaction: Weak Consumer Mobile but FY Targets in Sight

Through Q3, SBC is behind last year’s pace to meet a similar operating profit target but Q4 growth looks achievable and management remains...

Kirk Boodry

ASKUL (2678) - Large, Accretive, Not Enough for Prime So Look For More

ASKUL announced a large buyback today, designed to lower parent Z Holdings ownership to be able to meet the TSE Prime Tradable Share Ratio...

Travis Lundy

Z Holdings (Buy) Q3 21 Results Reaction: Mostly Positive as Ad Sales Continues to Impress

This was a good quarter with better-than-expected growth in eCommerce, ad sales and cashless payments and an upgrade to the full-year EBITDA target...

Kirk Boodry

Platforms Add Merchant Support as Japan's Online Fashion Wars Move Offline

Zozo has had a good run during the pandemic and we continue to remain bullish about its growth thanks to many recent innovations but the biggest...

Michael Causton

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