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Japan Stock Writeups |
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Aeon Delight. Captive sales growth and sector consolidation are the key earnings drivers for this office maintenance company. As part of the Aeon Group, the company is benefiting from store openings and consolidation across the retail empire. We expect Aeon Delight to further penetrate this group with its extensive range of facilities management services, and to develop a wider external client base. In addition, sector consolidation can be expected to continue. In the last year the company's market share has increased to 4.2% from 3.3%. Through consolidation, it has proved adept at realising good operating leverage by stripping out costs and economies of scale.
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Aeon Mall (previously held and profitably sold) has now finalised the details of its merger with fellow mall operator Diamond City in March. The new group will be Japan's largest shopping centre operator. The merger makes sense strategically - Aeon has mainly out-of-town centres and a good reputation for gaining large 'anchor' tenants whilst Diamond is better known for city centre locations and niche retailers. The stripping-out of central costs, together with the strong position, contribute to making this stock a buy.
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The airline is getting hit by the rising oil price eating into domestic demand, as travellers switch to cheaper airlines and the increasing use of the train network. Although ANA will benefit from any decline in the oil price, this will be offset by reduced activity from both domestic and international travel as global growth slows. All Nippon Airways. In the last year ANA has increased international passenger numbers by 10.9% and domestic by 1.8% against falls of -5.0% and -2.0% for Japan Air as their domestic competitor was hit by concerns over safety and the poor levels of service. ANA has been building up it's international cargo business. ANA is now an established international airline and has been a member of Star Alliance since 2005. In particular it has an especially strong market shares on routes between Japan and both the US and China with a good market share of routes between Japan and the rest of Asia.
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