Thinking Points

  • Last week, Fisco introduced three research reports in English.
  • Companies covered were: AOI TYO Holdings (TSE: 3975), Create Restaurant Holdings (TSE: 3387), and Prospect (TSE: 3528).
  • As far as I can tell, AOI TYO is rather straightforward while Create Restaurant and Prospect are both difficult to understand and analyze.

Fisco Roundup

Last week, Fisco released reports on 3 companies: AOI TYO Holdings (TSE: 3975), Create Restaurants Holdings (TSE: 3387), and Prospect (TSE: 3528). To stay on top of these reports, you can either check up on Fisco’s website or follow them on Twitter.

Here are quick snapshots of each company:

AOI TYO Holdings

AOI TYO Holdings is the biggest player in TV commercial production through its two companies, AOI and TYO. More than half of its consolidated sales came through Hakuhodo (TSE: 2433) and Dentsu (TSE: 4324) groups in fiscal 2017.

With expectations of a shrinking Japan market, the company looks to China and Southeast Asia for geographical expansion and also Augmented Reality and Virtual Reality for expansion of its existing video production business.

At 9 times EV/EBIT with an okay balance sheet (0.43 equity-to-asset ratio) and a modest to non-existent market growth expectation, the stock price doesn’t look particularly cheap. As a reference, market cap is 32,997 million yen ($301 million USD). My first impression is that AOI TYO Holdings seems like an okay business with an okay price.

Click here to access Fisco’s AOI TYO Holdings Report.


Create Restaurant Holdings

Create Restaurant Holdings operates some 800+ restaurants across 200 brands. The company’s focus is on shopping center food court operations as well as traditional Japanese izakayas (similar to a pub). It’s got a recently aggressive M&A approach, particularly over the last 10 years or so. Create is still in its early stages of foreign expansion.

Recently, Create has slowed down its store openings and closed some of its underperforming locations. The report refers to the group’s “Group Federation Management” management style, which seems like a complicated way of saying “realizing operational synergies across brands”.

Over the last five years,  Create has explosively grown revenues (25.7% CAGR) and operating income (19% CAGR). Today, the company trades at a 26 times EV/EBIT multiple and a 0.28 equity-to-asset ratio. If you’ve been keeping up with this site a while, you probably already know that I’m a little sheepish about retail in general, and also high EV/EBIT multiples. With so many brands under management, I’m not sure anybody can competently analyze the company. Create is in mid cap territory with a market cap of 145 billion yen ($1.3 billion USD).

Click here to access Fisco’s report on Create Restaurant Holdings.



For having a market cap of 22 billion yen (~200 million USD), Prospect has its hands in many different business areas. Its primary source of revenues are in condo sales and construction. However, the company is also involved in asset management and solar power.

The most interesting thing about Prospect is probably the CEO Curtis Freeze. Curtis is a New Yorker and a former Mormon missionary turned hedge fund manager who used to live in Fukushima (nuclear disaster). As such, he is heavily involved in the revival of the Fukushima area, and so it makes sense that solar is part of Prospect’s business.

The best I can say is to read the report to get an idea of what this company does. The summary reads “A conglomerate that conducts a wide range of businesses centered on real estate and including construction, investment advisory, and renewable energy-related businesses”. The financials are even more confusing. I know I’ve mentioned that it’s best to skip the numbers in my “How To Read Fisco Research Reports” article, but for Prospect, it’s best to actually read the whole thing as it’ll give you an idea of what’s going on.

Click here to access Fisco’s report on Prospect.


Wrap up

That’s it for this week guys! If this is your first time reading, this is my first time introducing Fisco’s research reports. The idea here is to give you a quick overview of each company and if it catches your interest, you can go on to read Fisco’s report. If you have any other thoughts on how to make these posts more useful to you, please send me a message! Also, if you have a better suggestion for the name of this series, I’d be grateful.

Author: Kenkyo Investing

Kenkyo Investing applies a value investing approach to Japanese equities, providing insights that are often unavailable to non-Japanese speakers.

    2 replies to "Fisco Roundup: 3 Company Reports, Including Japan’s Largest TV Commercial Company (Week Ending June 8, 2018)"


      hEY CLAYTON,
      I am really thankfull for such a great articles about Fisco’s reports I am about to read through japaneese companies prior to my arrival in october to Japan… I am so curious what I am about to see in Japan for a couple of days…

      • Clayton Young

        Thanks for the kind words Tomasz. I’m trying to make Kenkyo the one-stop shop for English information on Japanese equities 🙂

        I hope you enjoy your trip! Let me know how it goes. I’m sure you’ll have a blast. New/different cultures are always a stimulating experience for me.


Comments are closed.