APAC Signal-to-Noise: Tourism strength in Korea and Japan

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APAC Signal-to-Noise

Tourism strength in Korea and Japan

Signal-to-Noise

03 August 2026

This week, we discuss diversified inbound tourism trends in Korea and Japan, and new coverage initiations in

Japan's food & beverage sector. Additionally, we introduce a new product tracking China mutual fund

positioning data.

Equity Strategy

Asia-Pacific

Diversified inbound tourism to Korea and Japan

We see continued strength in inbound travel to Korea and Japan (see note), supported by increasingly

diversified visitor countries and rising average spending per customer. Department stores and beauty/fashion

brands continue to enjoy strong momentum across both markets. Chinese travelers are no longer as dominant

a driver of inbound demand as in previous years. In Korea, our analyst Ahyung Cho highlights Shinsegae,

APR, and Amorepacific given their high exposure to global consumers through both inbound tourism and

overseas operations. In Japan, our analyst Arashi Nishizawa likes Pan Pacific on resilient ex-China demand

and the shift to a refund-based tax-free system; Goldwin and ABC-Mart are Buys that benefit from Korea

inbound demand.

4 stock initiations in Japan F&B: Buy Meiji and Japan Tobacco

Beyond tourism beneficiaries, we also see opportunities in Japan's food & beverage sector (see note). Within

the sector, our analyst Manabu Sumoge initiated four stocks - Meiji and Japan Tobacco at Buy; instant

noodle-purveyors Toyo Suisan and Nissin at Neutral (report). Two key sector themes are margin expansion

following price hikes and consumption tax cuts, which could help mitigate volume weakness following recent

price increases. Among the new initiations, Meiji stands out as a major beneficiary if a consumption tax cut is

implemented given 86% of revenue are domestic food related. Also, management's focus on ROE, production

restructuring, the exit from its loss-making China dairy business, and lower cocoa procurement costs should

support earnings growth.

Trading ideas and investment strategies discussed herein may give rise to significant risk and are not suitable for all investors.

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