IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.bloomberg.com/news/articles/2023-08-09/l-occitane-boss-is-said-in-advanced-talks-on-6-5-billion-buyout?in_source=embedded-checkout-banner" target="_blank" rel="noopener">According to Bloomberg</a>, <a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a> is set to receive a HK$35 per share privatisation offer from Reinold Geiger, the Chairman and the largest shareholder.</li>
<li>The rumoured price is attractive and represents an all-time high share price. Therefore, Acatis KVG, the shareholder with a blocking stake, would be supportive.</li>
<li>The rumoured price implies multiples at a discount to peer multiples, which explains Mr Geiger’s ambitions for a possible European listing to secure higher valuation multiples. </li>
</ul>



According to Bloomberg, L'Occitane (973 HK) is set to receive a HK$35 per share privatisation offer from Reinold Geiger, the Chairman and the largest shareholder.
The rumoured price is attractive and represents an all-time high share price. Therefore, Acatis KVG, the shareholder with a blocking stake, would be supportive.
The rumoured price implies multiples at a discount to peer multiples, which explains Mr Geiger’s ambitions for a possible European listing to secure higher valuation multiples. 


L’Occitane (973 HK): HK$35 Offer from the Controlling Shareholder?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a> is drawing takeover interest from Reinold Geiger, the Chairman and the largest shareholder, <a href="https://www.bloomberg.com/news/articles/2023-07-25/l-occitane-owner-said-to-mull-buyout-of-4-billion-beauty-firm" target="_blank" rel="noopener">according to Bloomberg</a>. Mr Geiger has been exploring financing options for the potential deal.</li>
<li>The presence of a significant disinterested shareholder, Acatis KVG, necessitates an attractive takeover premium. Acatis KVG trimmed its stake in July 2021 at HK$30.01 per share.</li>
<li>L’Occitane released a solid <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0725/2023072500263.pdf" target="_blank" rel="noopener">1QFY2024 update</a> today with constant currency growth of 24.5% YoY. Irrespective of a bid materialising, the valuation is undemanding compared to peer multiples. </li>
</ul>



L'Occitane (973 HK) is drawing takeover interest from Reinold Geiger, the Chairman and the largest shareholder, according to Bloomberg. Mr Geiger has been exploring financing options for the potential deal.
The presence of a significant disinterested shareholder, Acatis KVG, necessitates an attractive takeover premium. Acatis KVG trimmed its stake in July 2021 at HK$30.01 per share.
L’Occitane released a solid 1QFY2024 update today with constant currency growth of 24.5% YoY. Irrespective of a bid materialising, the valuation is undemanding compared to peer multiples. 


L’Occitane (973 HK): Controlling Shareholder Mulling a Bid?

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

<ul>
<li>Oddity Tech, owner of famous global brands IL MAKIAGE and SpoiledChild, is growing slower than in 2022 and 2023. The overall growth will slow down to ~20% y/y in 2025.</li>
<li>According to my estimates and SEC filings, private equity firm L Catterton, the largest shareholder, reduced its stake in Oddity Tech to 18.4%, down from ~42% prior to an IPO.</li>
<li>I see ~34% downside risk in Oddity Tech stock as growth will slow down and the company will launch new brands only in the second half of 2025.</li>
</ul>


Oddity Tech, owner of famous global brands IL MAKIAGE and SpoiledChild, is growing slower than in 2022 and 2023. The overall growth will slow down to ~20% y/y in 2025.
According to my estimates and SEC filings, private equity firm L Catterton, the largest shareholder, reduced its stake in Oddity Tech to 18.4%, down from ~42% prior to an IPO.
I see ~34% downside risk in Oddity Tech stock as growth will slow down and the company will launch new brands only in the second half of 2025.


Oddity Tech: ~34% Downside Risk As Growth Will Slow Down

Equity Research Focusing on the Consumer Sector, Small Cap Consumer Research

Small Cap Consumer Research

Equity Research Focusing on the Consumer Sector

Small Cap Consumer Research, LLC is a leading company-sponsored equity research provider focusing on the consumer sector (apparel, brand licensing and specialty retailing segments).

<ul><li>We are reiterating our Buy rating and $0.25 price target, but reducing our projections after Starco Brands posted a lower than expected 2Q24 and did not provide 2024 guidance, as management continues to pivot to multiple new and expanded retailer relationships for virtually all their brands, including the addition of Costco as a key new partner.</li><li>We believe, beginning in 3Q24, Starco will take their stable of brands to a new level in terms of door penetration which, when combined with an aggressive focus on adding new categories, will position the company for strong top line and Adjusted EBITDA expansion for 2025 and beyond.</li><li>As such, we continue to view the future of Starco as strong, and we reiterate our Buy rating and $0.25 price target for STCB.</li></ul>

We are reiterating our Buy rating and $0.25 price target, but reducing our projections after Starco Brands posted a lower than expected 2Q24 and did not provide 2024 guidance, as management continues to pivot to multiple new and expanded retailer relationships for virtually all their brands, including the addition of Costco as a key new partner.We believe, beginning in 3Q24, Starco will take their stable of brands to a new level in terms of door penetration which, when combined with an aggressive focus on adding new categories, will position the company for strong top line and Adjusted EBITDA expansion for 2025 and beyond.As such, we continue to view the future of Starco as strong, and we reiterate our Buy rating and $0.25 price target for STCB.

elf Beauty Inc - STCB: 2Q Review: Adding Costco, Planning for the Future, Reiterate Buy

<ul><li>We are reiterating our Buy rating, price target and projections for Starco Brands with the company announcing 2Q24 (June) results after the close on Tuesday.</li><li>We believe, after resetting near-term expectations in 1Q due to multiple expansions for key brands in 2H and 2025 and Whipshots slightly plateauing, the 2Q call will be focused on laying out the road map for material expansion on multiple levels/brands and the longer term positive implications.</li><li>We believe there remain multiple pathways to upside for the company over the longer-term and, the model of leveraging the company's manufacturing and marketing infrastructure remains fully intact.</li></ul>

We are reiterating our Buy rating, price target and projections for Starco Brands with the company announcing 2Q24 (June) results after the close on Tuesday.We believe, after resetting near-term expectations in 1Q due to multiple expansions for key brands in 2H and 2025 and Whipshots slightly plateauing, the 2Q call will be focused on laying out the road map for material expansion on multiple levels/brands and the longer term positive implications.We believe there remain multiple pathways to upside for the company over the longer-term and, the model of leveraging the company's manufacturing and marketing infrastructure remains fully intact.

elf Beauty Inc - STCB: 2Q Preview: Putting the Building Blocks Together; Reiterate Buy, PT

United States

Coty Inc. manufactures and distributes beauty products. The Company offers fragrances, color cosmetics, hygiene, sun care, and skin treatment products. Coty supplies its products to department stores, specialty retailers, mass-market retailers, and duty free shops in airports worldwide.

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Coty Inc Cl A (COTY US)

L’Occitane (973 HK): HK$35 Offer from the Controlling Shareholder?

Shares are currently in a trading halt. The rumoured offer price of HK$35 per share is attractive and represents an all-time high price. Therefore,...

Arun George

L’Occitane (973 HK): Controlling Shareholder Mulling a Bid?

The presence of a significant disinterested shareholder necessitates an attractive takeover premium. Irrespective of a bid materialising, the...

Arun George

Oddity Tech: ~34% Downside Risk As Growth Will Slow Down

I see ~34% downside risk in Oddity Tech stock, reflecting lower peer multiples, heavy insider selling and continued slowdown in the beauty industry

Andrei Zakharov

elf Beauty Inc - STCB: 2Q Review: Adding Costco, Planning for the Future, Reiterate Buy

We are reiterating our Buy rating and $0.25 price target, but reducing our projections after Starco Brands posted a lower than expected 2Q24 and...

Small Cap Consumer Research

elf Beauty Inc - STCB: 2Q Preview: Putting the Building Blocks Together; Reiterate Buy, PT

We are reiterating our Buy rating, price target and projections for Starco Brands with the company announcing 2Q24 (June) results after the close...

Small Cap Consumer Research

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