Equity Analyst, LightStream Research

Chacko Jacob

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

Pan Pacific International Holdings / Equity Bottom-Up

Pan Pacific International Holdings (7532 JP)

<p>Earlier in October, <a href="https://www.smartkarma.com/entities/13475" target="_blank" data-smartkarma-citation="entities:13475:1">Don Quijote Holdings (7532 JP)</a> and FamilyMart UNY came to an agreement for the former to acquire all of FamilyMart’s holdings in UNY. While a number of IPs have commented on the nature of the deal, in this report we will look at the potential earnings impact of the deal on Donki.</p>
<p>Don Quijote had already acquired a 40% stake in UNY in late 2017 and had begun converting some of the latter’s stores into a new store format named “MEGA Don Quijote UNY”. As of FY06/18, Donki had converted 6 stores, which together witnessed a 90% YoY increase in sales (March–August) from JPY 6.8bn to JPY 13.2bn. During the same period, traffic at the converted stores grew 60% from 20,000 people/day to 32,000. As with its own stores, Donki was able to attract crowds from the younger generation.</p>

Earlier in October, Don Quijote Holdings (7532 JP) and FamilyMart UNY came to an agreement for the former to acquire all of FamilyMart’s holdings in UNY. While a number of IPs have commented on the nature of the deal, in this report we will look at the potential earnings impact of the deal on Donki.
Don Quijote had already acquired a 40% stake in UNY in late 2017 and had begun converting some of the latter’s stores into a new store format named “MEGA Don Quijote UNY”. As of FY06/18, Donki had converted 6 stores, which together witnessed a 90% YoY increase in sales (March–August) from JPY 6.8bn to JPY 13.2bn. During the same period, traffic at the converted stores grew 60% from 20,000 people/day to 32,000. As with its own stores, Donki was able to attract crowds from the younger generation.

Don Quijote: Potential Earnings Impact from Conversion of UNY Stores