Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>Z Holdings will integrate its eCommerce platforms in a move that boosts the PayPay brand and may generate some (very) modest synergies</li>
<li>We are publishing updated forecasts and setting a new target price at ¥550 but we remain cautious on the shares in the near term as consensus remains high</li>
<li>Shares of ZHD still appear expensive at 14-16x our estimate of FY22e EBITDA and are more expensive than Alphabet at these levels (12x EBITDA)</li>
</ul>


Z Holdings will integrate its eCommerce platforms in a move that boosts the PayPay brand and may generate some (very) modest synergies
We are publishing updated forecasts and setting a new target price at ¥550 but we remain cautious on the shares in the near term as consensus remains high
Shares of ZHD still appear expensive at 14-16x our estimate of FY22e EBITDA and are more expensive than Alphabet at these levels (12x EBITDA)


Z Holdings (Neutral) - PayPay Rebranding of ECommerce; We Remain Cautious in a Rebuilding Year

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>Net Protections Holdings, a buy now pay later service provider, raised around US$570m via selling a mix of primary and secondary shares in its Japan IPO in Dec 2021.</li>
<li>As per Yano Research, it had 40% market share in the domestic BNPL market for B2C transactions.</li>
<li>In this note, we will talk about the upcoming lock-up expiry on 12th Jun 2022.</li>
</ul>


Net Protections Holdings, a buy now pay later service provider, raised around US$570m via selling a mix of primary and secondary shares in its Japan IPO in Dec 2021.
As per Yano Research, it had 40% market share in the domestic BNPL market for B2C transactions.
In this note, we will talk about the upcoming lock-up expiry on 12th Jun 2022.


Net Protections Holding IPO Lock-Up - Small Expiry Now, Before 20% Is Released Later in the Year

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>The three Japanese telecoms reported earnings this week. <a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank Corp (9434 JP)</a> was disappointing (and slightly confusing). <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> was much of a muchness.</li>
<li>
<a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a>  looked the best, and announced the largest buyback - ¥400bn or 3%. But it comes from a government sale, not the market. </li>
<li>Nevertheless, the company is doing what it promised and executing on its promise. And despite the "bullishness" in the revenue forecast, earnings forecasts to March 2023 look conservative.</li>
</ul>


The three Japanese telecoms reported earnings this week. Softbank Corp (9434 JP) was disappointing (and slightly confusing). KDDI Corp (9433 JP) was much of a muchness.

NTT (Nippon Telegraph &amp; Telephone) (9432 JP)  looked the best, and announced the largest buyback - ¥400bn or 3%. But it comes from a government sale, not the market. 
Nevertheless, the company is doing what it promised and executing on its promise. And despite the "bullishness" in the revenue forecast, earnings forecasts to March 2023 look conservative.


NTT (9432) - Salutary Earnings Salutary Buyback, More to Go

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.

<ul>
<li>Monotaro’s 1Q22 topline was broadly in line with expectations but OP overshot consensus and company guidance by ¥355m and ¥396m respectively as SG&amp;A fell short of the plan by ¥435m.</li>
<li>Although the market treated <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" data-smartkarma-citation="entities:15441:1" rel="noopener">MonotaRO Co Ltd (3064 JP)</a> as a pandemic stock, it has stronger fundamentals than most pandemic winners.</li>
<li>Shares are not cheap enough to be outright bullish but it is still a decent long hedge to short many other low-quality names.</li>
</ul>


Monotaro’s 1Q22 topline was broadly in line with expectations but OP overshot consensus and company guidance by ¥355m and ¥396m respectively as SG&amp;A fell short of the plan by ¥435m.
Although the market treated MonotaRO Co Ltd (3064 JP) as a pandemic stock, it has stronger fundamentals than most pandemic winners.
Shares are not cheap enough to be outright bullish but it is still a decent long hedge to short many other low-quality names.


<ul>
<li>FY22 EBITDA guidance is disappointing as strategic investments accelerate yet again and leaving investors uncertain on whether previous guidance for FY23 can be met</li>
<li>We think ZHD's FY23 target of ¥ 390bn in EBITDA is reachable but a meaningful beat, which is factored into consensus, is less likely</li>
<li>So FY22 is another transition year but without the excitement on the potential for LINE as an alternative theme. It is better to be on the sidelines. </li>
</ul>


FY22 EBITDA guidance is disappointing as strategic investments accelerate yet again and leaving investors uncertain on whether previous guidance for FY23 can be met
We think ZHD's FY23 target of ¥ 390bn in EBITDA is reachable but a meaningful beat, which is factored into consensus, is less likely
So FY22 is another transition year but without the excitement on the potential for LINE as an alternative theme. It is better to be on the sidelines. 


Z Holdings Q4 21 Results Reaction: Growth Pushed Back a Year; Downgrade to Neutral

Japan

ASKUL Corporation sells office equipment products to medium and small sized business offices via the Internet and facsimiles.  The Company provides next day delivery services throughout Japan.

BELLUNA CO., LTD. is a mail-order company offering clothing, household goods, and hobby goods through catalogs.  The Company also provides financing service.

Oisix ra daichi Inc. sells various food products online. Among other products, the company sells vegetables, fruits, fish, meat, milk, and ready-made food.

Ci Medical Co.,Ltd. manufactures and sells dental care products by mail order. The Company provides dental care products, toothbrushes, and other products. Ci Medical also operates dental magazines publishing.

Demae-can Co., Ltd. operates websites offering comprehensive delivery services.  The Company's websites allow users to order food, dry cleaning, and repair and recycling services through the Internet.

Scroll Corporation operates catalog mail order business.  The Company sells ladies' apparel and underwear and also sundry goods.  The Company sells its merchandise through on-line stores.  Muto also sells Kimono, furs, and precious stones at exhibition.

Beenos Inc sells various type of merchandise using group-buying method through Internet. The Company's merchandises include fashion goods, brand goods, convenience goods, baby goods, and toiletry goods.

Syuppin Co., Ltd. operates a used merchandise business. It buys and sells used and new merchandises both online and in stores.

Evolable Asia Corp. is an online travel agency providing airline tickets and overseas hotel booking through direct-sales websites and OEM. The company also engages in offshore development in Southeast Asia and inbound trip services.

Hamee Corp. designs and wholesales Smart Phone accessories and offers e-commerce service to sell their products. The Company also develops and provides Cloud type management platform for e-commerce businesses.

Vipshop Holdings Ltd. retails branded products at discount over the Internet. The Company retails through flash sales, in which limited quantities of an item are sold at deep discount for a specified period of time.

Etsy, Inc. provides e-commerce services. The Company offers handmade and vintage items, art, and supplies, as well as regular items such as clothing, housewares, paper goods, candles, bags and purses, music, and wood working items. Etsy serves users throughout the United States.

Wayfair Inc. retails household goods online. The Company offers bedroom, living room, kitchen and dining, home entertainment, home office, game room and bar, patio, hallway and entryway, and bathroom furniture. Wayfair offers products and services in the United States.

Mango Excellent Media Co.,Ltd. offers television based services. The Company provides television shopping, online shopping, outbound shopping, and other services. Mango Excellent Media also operates new media platform operation.

Momo.com Inc is an e-commerce services company. The Company offers TV shopping and Internet shopping services, including beauty products, clothing, leather goods and food shops.

Ocado Group PLC distributes a wide range of retail consumer products.  The Company provides home delivery of a wide range of products including food and drink, toiletries and baby, household, pet care, and holiday products.

TripAdvisor Inc. is an online travel research company. The Company's travel research platform aggregates reviews and opinions of members about destinations, accommodations (including hotels, bed and breakfasts ("B&Bs"), specialty lodging and vacation rentals), restaurants and activities throughout the world.

Webjet Limited provides branded online travel services for travelers.  The Company offers one-stop travel shopping and reservation services, providing real-time access to schedule, pricing, and availability information for airlines hotels, and major car rental companies.

zooplus AG retails pet supplies over the Internet.

CJ ENM, Ltd. retails clothes, kitchen utensils, home appliances, and jewelry.  The Company sells its merchandise through TV home shopping channels, catalogs, and the Internet shopping mall.  CJ ENM operates cable television business through a subsidiary.

ZOZO Inc operates internet shopping sites for apparel.  The Company also provides communication services relating to apparel such as blogs by fashion moguls and internet chat room for users.

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ZOZO Inc (3092 JP)

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With the share price down 51% from the peak at one point, markets discounted MonotaRo alongside the rest of the pandemic stocks, even though the...

Oshadhi Kumarasiri

Z Holdings Q4 21 Results Reaction: Growth Pushed Back a Year; Downgrade to Neutral

Guidance for FY22 profitability growth is disappointing and whilst targets for the following year are probably achievable, a material beat is off...

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