Investment Rating - The report indicates a positive outlook for small businesses, with the NFIB small business optimism index rising 2.2 points to 93.7 in July, surpassing estimates and consensus expectations [2][3]. Core Insights - Small business optimism has improved for five consecutive months, although it remains below the long-term average of 98 for the 31st month in a row [2]. - The share of firms considering it a good time to expand is historically low at 5%, but expectations for economic improvement surged by 18 points [2][4]. - Employment expectations remain stable, with net plans to increase employment at 15% for three consecutive months [3]. - Inflation continues to be a significant concern, with 25% of businesses citing it as their biggest problem, up from 21% last month [4]. Summary by Sections Small Business Sentiment - The NFIB small business optimism index increased to 93.7, indicating a positive shift in sentiment [2]. - Expectations for higher real sales rose by 4 points to a net -9% [2]. Employment and Compensation - Net plans to increase employment remained steady at 15%, while the share of businesses unable to fill positions rose to 38% [3]. - The share of firms raising compensation dropped to 33%, with plans to increase compensation in the next three months declining to 18% [3]. Credit Conditions - Small businesses report that credit is harder to obtain, with a net reporting of 6% indicating tougher conditions [4]. - The share of households experiencing tighter credit conditions increased to 52%, although expectations for future credit conditions improved slightly [7]. Inflation Expectations - Medium-term inflation expectations fell to 2.3%, marking a series low, while one-year and five-year expectations remained unchanged at 3.0% and 2.8%, respectively [6]. - The perception of inflation uncertainty remained stable across all time horizons [6].

Global Research and Evidence Lab 13 August 2024 Equities Japan Retail Sector July 2024 sales (announced 9 and 13 August): SEJ's same-store sales continue to seesaw Japan Retail Welcia HD (3141): Sales missed the company's plan again in July Monthly sales (end of month, FY2/25): Group same-store sales rose 0.3% yoy, with customer numbers down 1.0% yoy and sales per customer up 1.3% yoy. By category, product sales fell 2.4% yoy (pharmaceuticals -0.5%, hygiene and nursing care -8.8%, counselling cosmetics -4.2 ...

Global Research and Evidence Lab 13 August 2024 US Economic Data Core PPI perks up a little Headline producer prices edge up 0.1% in July, core rises 0.3% The headline Producer Price Index (PPI for final demand) increased 0.1% in July, in line with our expectations (0.1%) and a touch below consensus (0.2%). Prices for final demand goods climbed 0.6%, on the back of the 1.9% increase in energy prices. The volatile trade services weighed on the monthly gain, holding down the increase in headline PPI by 0.3 pp ...

Global Research and Evidence Lab 13 August 2024 First Read Japan Retail Sector Jiji Press report: Government to alter the consumption tax-exemption system – as has been expected; no surprises Summary On 13 August, Jiji Press reported that the government and current ruling party will proceed with a fundamental review of the consumption tax-exemption system for visitors to Japan. Specifically, the report said the system will change so that consumers get their tax refund after it is confirmed that tax-free pur ...

Global Research and Evidence Lab 13 August 2024 Tsuruha Holdings Revising forecasts: Showing merger effects will be important Action: Earnings update We are updating our earnings estimates. In addition to lowering our OP forecast slightly, we are reflecting growth in the number of stores for the overall sector and continued upward pressure on labour costs over the medium term, and we are changing our OP margin forecast from FY5/30 onward from 4.5% to 4.0%. Measures to maintain or increase profitability in t ...

Investment Rating - The report assigns a 12-month investment rating of Neutral for the industry [1]. Core Insights - The company reported a core operating profit of ¥25.6 billion for Q1, reflecting a year-on-year increase of 7% and surpassing forecasts by 4% [1]. - The quarterly operating profit rose to ¥27.2 billion, exceeding consensus estimates of ¥23.6 billion, driven by higher stock profits and a business divestment gain of ¥1.3 billion [1]. - The company announced a share buy-back program worth up to ¥10 billion, representing 1.13% of shares in issue, and increased its quarterly dividend from ¥612 to ¥624 per share [1]. - The firm’s investment securities had a book value of ¥636.4 billion and a market value of ¥1.1 trillion at the end of June, indicating an 8% increase in book value compared to the end of March [1]. - The company has improved its financial visibility by increasing segmental disclosures and providing data on its securities holdings [1]. Financial Performance Summary - Revenue for FY3/23 was ¥643.98 billion, showing an 11.4% year-on-year increase, while FY3/24 revenue is projected to decline by 6.5% to ¥601.95 billion [2]. - Operating profit for FY3/23 was ¥86.62 billion, a 4.3% increase, with FY3/24 expected to rise by 9.2% to ¥94.55 billion [2]. - The net profit for FY3/23 was reported at ¥91.35 billion, with a projected increase to ¥122.23 billion for FY3/24 [2]. - The basic EPS for FY3/23 was ¥2,037.6, with an expected increase to ¥2,753.5 for FY3/24 [2]. Quarterly Performance - In Q1 FY24, the company reported revenue of ¥146.15 billion, a 4.3% increase year-on-year, and an operating profit of ¥27.22 billion, reflecting a 13.6% increase [3]. - The operating profit margin for Q1 FY24 was 18.6%, indicating a positive trend in profitability [3]. - The net profit for Q1 FY24 was ¥45.90 billion, showing a significant year-on-year increase [3].

Industry Investment Rating - The report provides a stock ranking for the Japan Food Sector, with Buy and Neutral ratings for various companies in the Beer & Beverage, Processed Food, and Tobacco/Others categories [5] Core Investment Thesis - The report highlights that share prices reacted sharply to concrete earnings figures during the April-June period, with stocks that reported stronger Q1 results than guidance and had high visibility of profit growth for the next fiscal year being favored [2] - Stocks with high medium- and long-term growth prospects but short-term earnings falling short of consensus were overly penalized by the market, presenting potential investment opportunities [2] Stock Recommendations - Nissin Foods is recommended as a Buy due to: 1) Q1 profit stagnation being attributed to a time lag in recording costs, 2) overseas instant noodle sales growing at a high single-digit rate, and 3) outperforming the market in terms of volumes in the US despite price mix issues [3] - Coca-Cola Bottlers Japan is recommended as a Buy due to: 1) strong monthly sales indicating continued positive news flow, and 2) high visibility for the next fiscal year with full contribution from price increase effects [3] Stock Ranking Details - Buy-rated stocks include Coca-Cola Bottlers Japan, Nissin Foods, Asahi GHD, Japan Tobacco, Kikkoman, and Toyo Suisan Kaisha among others [5] - Neutral-rated stocks include Suntory Beverage & Food, Dydo GHD, Itoen, Morinaga Milk, and Yakult among others [5]

Global Research and Evidence Lab 13 August 2024 Japan Equity Strategy & Thematic Research Event Watch: Focus on micro factors while also monitoring macro conditions Equity Strategy Japan Nozomi Moriya Strategist nozomi.moriya@ubs.com +81-3-5208 6260 Miranda Zhang Associate Analyst miranda.zhang@ubs.com +81-3-5208 6283 Focus on Japan-specific corporate change while monitoring macro conditions Having edged down 0.5% in July, Japan's TOPIX index fell by 20% in just three days in August in reaction to the BoJ's ...

Investment Rating - The report assigns a 12-month rating of Neutral to Evolution Mining [2][14]. Core Insights - FY25 guidance aligns broadly with a solid FY24 result, highlighting a final dividend of 5Acps in line with consensus [2]. - The price target remains unchanged at A$3.70, reflecting a neutral valuation stance [2][5]. - Key financial metrics show a revenue of A$3,216 million, surpassing UBS estimates of A$3,118 million and consensus of A$3,179 million [2]. Financial Performance - Underlying EBITDA reached A$1,513 million, exceeding UBS estimates of A$1,221 million and consensus of A$1,378 million [2]. - Underlying NPAT was A$482 million, compared to UBS estimates of A$297 million and consensus of A$354 million [2]. - Basic EPS was reported at 22Acps, above UBS estimates of 15Acps and consensus of 19Acps [2]. Guidance and Projections - FY25 guidance includes gold production of 710-780koz, with UBS estimates at 727koz and consensus at 743koz [2]. - Copper production is projected at 70-80kt, aligning with UBS and consensus estimates of 77kt [2]. - AISC is expected to be A$1,475-1,575/oz, with UBS estimates at A$1,460/oz and consensus at A$1,470/oz [2]. Valuation and Market Metrics - The report indicates a forecast price appreciation of -2.9% and a forecast dividend yield of 5.2%, leading to a forecast stock return of 2.4% [3]. - The market return assumption is set at 9.2%, resulting in a forecast excess return of -6.8% [3]. - Evolution Mining operates six mines across Australia and Canada, focusing on optimizing and upgrading asset quality [4].

Investment Rating - The report assigns a 12-month rating of Neutral to Orora, with a price target of A$2.16 [2][16]. Core Insights - FY24 results exceeded expectations, supporting a re-basing of FY25 consensus estimates. Revenue increased by 9% to A$4.7 billion, and EBIT rose by 26% to A$404 million [2][3]. - The company is undergoing a strategic review and is in discussions to potentially divest its North American Packaging Solutions (OPS) business [2][3]. Summary by Sections Financial Performance - FY24 revenue increased by 9% to A$4.7 billion, EBIT up by 26% to A$404 million, and net profit after tax (UNPAT) rose by 10% to A$224 million [2][3]. - Australasia Beverage EBIT grew by 2% to A$156 million, driven by a 2.5% increase in cans volume [2][3]. - North America EBIT remained flat at A$167 million, with OPS revenue down 11% in USD terms due to price deflation and lower volumes [2][3]. Outlook and Guidance - Orora did not provide formal Group earnings guidance but expects OPS EBIT to align with the 2HFY24 exit run-rate due to transformation benefits and cost management [2][3]. - Australasia EBIT is anticipated to be slightly lower in FY25, with growth in cans offset by the impact of furnace reline [2][3]. Valuation Metrics - Key financial metrics include a forecasted revenue growth to A$5.011 billion in FY25 and an EBIT margin of 7.9% [2][3]. - The report indicates a forecast dividend yield of 4.1% and a forecast stock return of -0.8% [4].