Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<p>Shiseido is scheduled to release its 2Q19 earnings on 8<sup>th</sup> August 2019. All other Japanese cosmetic companies have already reported their results and most of them had a relatively weak quarter when compared to the last 2-3 years. This was mainly down to the relatively weaker demand in the domestic market especially in product categories such as UV care, Shampoo and Milky Lotions.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/095/048/original/1.PNG?1565158215" class="editor-image img-responsive" data-smartkarma-image-id="95048"></figure><div class="content-caption">Source: Truedata POS</div>

Shiseido is scheduled to release its 2Q19 earnings on 8th August 2019. All other Japanese cosmetic companies have already reported their results and most of them had a relatively weak quarter when compared to the last 2-3 years. This was mainly down to the relatively weaker demand in the domestic market especially in product categories such as UV care, Shampoo and Milky Lotions.Source: Truedata POS

Shiseido: POS Alternative Data Report - 2Q19 Earnings

Event-Driven

<p>Today, 6<sup>th</sup> August 2019 Kirin Holdings and FANCL Corporation made an announcement regarding a capital and a business alliance between the two companies. According to the agreement, Kirin will purchase 39.54m shares of FANCL corporation from the founder Mr. Kenji Ikemori, his relatives and their asset management company on 6<sup>th</sup> September 2019 for a purchase consideration of ¥129.3bn.</p><p>Under this agreement, Kirin is acquiring 30.3% of FANCL’s outstanding shares at a price of ¥3,270 per share. The agreed upon price is at a 35% premium to FANCL’s current share price of ¥2,425. The voting rights attached to these shares acquired by Kirin will come to about 33% of the total voting rights and as a part of this deal, Kirin will get board representation at FANCL from June 2020. Kirin will be allowed to appoint one full time director and one part time director to the board of directors which currently consists of 9 directors (both executive directors and NEDs). Furthermore, Kirin will also receive the right to appoint one full time auditor to FANCL.</p>

Today, 6th August 2019 Kirin Holdings and FANCL Corporation made an announcement regarding a capital and a business alliance between the two companies. According to the agreement, Kirin will purchase 39.54m shares of FANCL corporation from the founder Mr. Kenji Ikemori, his relatives and their asset management company on 6th September 2019 for a purchase consideration of ¥129.3bn.Under this agreement, Kirin is acquiring 30.3% of FANCL’s outstanding shares at a price of ¥3,270 per share. The agreed upon price is at a 35% premium to FANCL’s current share price of ¥2,425. The voting rights attached to these shares acquired by Kirin will come to about 33% of the total voting rights and as a part of this deal, Kirin will get board representation at FANCL from June 2020. Kirin will be allowed to appoint one full time director and one part time director to the board of directors which currently consists of 9 directors (both executive directors and NEDs). Furthermore, Kirin will also receive the right to appoint one full time auditor to FANCL.

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

<p>At about 3:30pm JST news broke that <a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin Holdings (2503 JP)</a> would acquire a 30.3% stake in <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl Corp (4921 JP)</a> from the company's founder and his family. The deal value was announced to be ¥129.3bn which values the company at ¥426.7bn, a 35% premium to the last close and just a hair under its high for this year which is also its high this century. We attended the company's explanatory meeting and discuss our impressions below.</p>

At about 3:30pm JST news broke that Kirin Holdings (2503 JP) would acquire a 30.3% stake in Fancl Corp (4921 JP) from the company's founder and his family. The deal value was announced to be ¥129.3bn which values the company at ¥426.7bn, a 35% premium to the last close and just a hair under its high for this year which is also its high this century. We attended the company's explanatory meeting and discuss our impressions below.

Fancl: Explanatory Meeting On Kirin's Stake Acquisition Light on Details but Stay Positive Anyway

<p>Our analysis of Truedata POS sales of FANCL’s Nutritional Supplements business indicates a 23% YoY growth in 1QFY03/20. A big part of this growth came from new products such as Naishi Support and Nyosan Support. The seasoned products such as Calolimit showed signs of a slowdown on a QoQ basis. However, the growth was still positive for Calolimit in YoY terms.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/489/original/1.PNG?1564461970" class="editor-image img-responsive" data-smartkarma-image-id="94489"></figure><div class="content-caption">Source: Truedata POS</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/094/490/original/2.PNG?1564461984" class="editor-image img-responsive" data-smartkarma-image-id="94490"></figure><div class="content-caption">Source: Truedata POS</div><p>We have used our analysis of POS data to forecast the 1QFY03/20 revenues for the Nutritional Supplements business. Our POS data covers about 4% of FANCL’s Nutritional Supplements Business’ domestic revenue, thus improving the reliability of our forecasts. We have used a linear regression to forecast the segment revenues from POS data and it indicates a YoY growth rate in the high-teens range for 1QFY03/20.</p>

Our analysis of Truedata POS sales of FANCL’s Nutritional Supplements business indicates a 23% YoY growth in 1QFY03/20. A big part of this growth came from new products such as Naishi Support and Nyosan Support. The seasoned products such as Calolimit showed signs of a slowdown on a QoQ basis. However, the growth was still positive for Calolimit in YoY terms.Source: Truedata POSSource: Truedata POSWe have used our analysis of POS data to forecast the 1QFY03/20 revenues for the Nutritional Supplements business. Our POS data covers about 4% of FANCL’s Nutritional Supplements Business’ domestic revenue, thus improving the reliability of our forecasts. We have used a linear regression to forecast the segment revenues from POS data and it indicates a YoY growth rate in the high-teens range for 1QFY03/20.

FANCL: Truedata POS Alternative Data Report: Robust Growth in 1QFY03/20 Via New Products

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Quantitative Analysis

<p style="text-align: center;"><strong>• RELATIVE PRICE SCORE</strong> • </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/226/original/2019-06-13_16-47-07.png?1560412038" class="editor-image img-responsive" data-smartkarma-image-id="90226"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>INTRODUCTION </strong>- The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are thus on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company outlier thresholds are set at<strong> +4</strong> &amp; <strong>-2</strong> and equate to the top and bottom first-to-second percentiles of historical observations from which mean reversion takes a matter of months. RPS outliers with a Score of greater than 10.0 are rare outside of the 2000 tech 'bubble'. <a href="https://www.smartkarma.com/entities/goldwin-inc" target="_blank" data-smartkarma-citation="entities:410:1">Goldwin (8111 JP)</a> has the distinction of being one of only two large-cap RPS 'ten-baggers' since that time.</p><p><strong>This insight updates our list of Overbought and Oversold companies, reviews the best and worst performing companies in terms of RPS over the last three months and adds some specific comments on stocks on each category.</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/196/original/2019-06-13_11-15-27.png?1560392157" class="editor-image img-responsive" data-smartkarma-image-id="90196"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>STATISTICS</strong> - Currently, of the 3,832 listed companies for which daily RPS data is available, 94 companies are 'Overbought', and 131 are 'Oversold' - 2.5% and 3.4%, respectively of the total. For the 758 companies with a market capitalisation of over ¥100b, there are 50 'Overbought' and 18 'Oversold' companies, 6.6% and 5.0%, respectively. As noted the companion Insight, <a href="https://www.smartkarma.com/insights/japan-june-relative-price-scores-market-sectors-peer-groups-more-of-the-same" target="_blank" data-smartkarma-citation="insights:30323">🇯🇵 Japan • June Relative Price Scores: Market, Sectors &amp; Peer Groups - More of The Same</a>, these numbers and percentages are unusual and were last seen in the Japanese market in 2000. </p><hr><p style="text-align: center;"><strong>• RELATIVE PRICE SCORE TOPS •</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/202/original/2019-06-13_13-06-49.png?1560398835" class="editor-image img-responsive" data-smartkarma-image-id="90202"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>RPS 'TOPS'</strong> - In the last two years, 444 companies have achieved an RPS of '4' or more and the average Overbought 'persistence' is 43 days. 1.4% of the total of 1.29 million traded stock days were by companies with an RPS of over 4. For companies with a market capitalisation higher than ¥100b, the numbers are 96 companies and 75 days - demonstrating the superior persistence of large capitalisation companies in this regard. Some examples of RPS mean reversion in the last three months have been <a href="https://www.smartkarma.com/entities/descente-ltd" target="_blank" data-smartkarma-citation="entities:8225:1">Descente (8114 JP)</a>, <a href="https://www.smartkarma.com/entities/alfresa-holdings-corp" target="_blank" data-smartkarma-citation="entities:10610:1">Alfresa (2784 JP)</a>, <a href="https://www.smartkarma.com/entities/320" target="_blank" data-smartkarma-citation="entities:320:1">FamilyMart Uny (8028 JP)</a>, <a href="https://www.smartkarma.com/entities/kikkoman-corp" target="_blank" data-smartkarma-citation="entities:11720:1">Kikkoman (2801 JP)</a>, <a href="https://www.smartkarma.com/entities/kobayashi-pharmaceutical-co" target="_blank" data-smartkarma-citation="entities:14930:1">Kobayashi Pharmaceutical (4967 JP)</a>, and <a href="https://www.smartkarma.com/entities/eiken-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:12675:1">Eiken Chemical (4549 JP)</a>.  </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/201/original/2019-06-13_13-04-38.png?1560398780" class="editor-image img-responsive" data-smartkarma-image-id="90201"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/203/original/2019-06-13_13-08-46.png?1560398945" class="editor-image img-responsive" data-smartkarma-image-id="90203"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/204/original/2019-06-13_13-09-37.png?1560399049" class="editor-image img-responsive" data-smartkarma-image-id="90204"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/205/original/2019-06-13_13-12-01.png?1560399142" class="editor-image img-responsive" data-smartkarma-image-id="90205"></figure><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/316/original/2019-06-15_19-45-47.png?1560595558" class="editor-image img-responsive" data-smartkarma-image-id="90316"></figure><p>Source: Japan Analytics</p>
</div><p><strong>RPS 'BOTTOMS'</strong> - 372 companies have seen their RPS fall to '-2' or below in the last two years, and the average Oversold 'persistence' is 61 days. 1.5% of the total of 1.29 million traded stock days were by companies with an RPS of less than -2.  For larger capitalisation companies, the numbers are 85 companies and 89 days. A recent example of positive RPS mean reversion is <a href="https://www.smartkarma.com/entities/k-o-energy-group-inc" target="_blank" data-smartkarma-citation="entities:17701:1">K&amp;O Energy (1663 JP)</a>.</p><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/207/original/2019-06-13_13-14-03.png?1560399270" class="editor-image img-responsive" data-smartkarma-image-id="90207"></figure><p>Source: Japan Analytics</p>
</div><div class="content-highlight"><p>In the <strong>DETAIL </strong>section below, we list the current very overbought (RPS&gt;5), too late to buy (RPS &gt;4&lt;5) and oversold (RPS &lt;-2) stocks as well as the most substantial three-month positive and negative changes in RPS.</p></div>

• RELATIVE PRICE SCORE • Source: Japan AnalyticsINTRODUCTION - The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are thus on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company outlier thresholds are set at +4 &amp; -2 and equate to the top and bottom first-to-second percentiles of historical observations from which mean reversion takes a matter of months. RPS outliers with a Score of greater than 10.0 are rare outside of the 2000 tech 'bubble'. Goldwin (8111 JP) has the distinction of being one of only two large-cap RPS 'ten-baggers' since that time.This insight updates our list of Overbought and Oversold companies, reviews the best and worst performing companies in terms of RPS over the last three months and adds some specific comments on stocks on each category.Source: Japan AnalyticsSTATISTICS - Currently, of the 3,832 listed companies for which daily RPS data is available, 94 companies are 'Overbought', and 131 are 'Oversold' - 2.5% and 3.4%, respectively of the total. For the 758 companies with a market capitalisation of over ¥100b, there are 50 'Overbought' and 18 'Oversold' companies, 6.6% and 5.0%, respectively. As noted the companion Insight, 🇯🇵 Japan • June Relative Price Scores: Market, Sectors &amp; Peer Groups - More of The Same, these numbers and percentages are unusual and were last seen in the Japanese market in 2000. • RELATIVE PRICE SCORE TOPS •Source: Japan AnalyticsRPS 'TOPS' - In the last two years, 444 companies have achieved an RPS of '4' or more and the average Overbought 'persistence' is 43 days. 1.4% of the total of 1.29 million traded stock days were by companies with an RPS of over 4. For companies with a market capitalisation higher than ¥100b, the numbers are 96 companies and 75 days - demonstrating the superior persistence of large capitalisation companies in this regard. Some examples of RPS mean reversion in the last three months have been Descente (8114 JP), Alfresa (2784 JP), FamilyMart Uny (8028 JP), Kikkoman (2801 JP), Kobayashi Pharmaceutical (4967 JP), and Eiken Chemical (4549 JP).  
Source: Japan Analytics
RPS 'BOTTOMS' - 372 companies have seen their RPS fall to '-2' or below in the last two years, and the average Oversold 'persistence' is 61 days. 1.5% of the total of 1.29 million traded stock days were by companies with an RPS of less than -2.  For larger capitalisation companies, the numbers are 85 companies and 89 days. A recent example of positive RPS mean reversion is K&amp;O Energy (1663 JP).
Source: Japan Analytics
In the DETAIL section below, we list the current very overbought (RPS&gt;5), too late to buy (RPS &gt;4&lt;5) and oversold (RPS &lt;-2) stocks as well as the most substantial three-month positive and negative changes in RPS.

🇯🇵 Japan • Relative Price Scores - Overbought & Oversold Companies - June 2019

Japan

FANCL CORPORATION produces and sells additive-free skin care cosmetics for both women and men.  The Company's products include cleansing creams, hair care goods such as shampoos and conditioners, and facial make up products.  Fancl also makes and distributes dietary supplements including royal jelly and various tablets with extracted essence from mushrooms, garlic, ginseng, and soy beans.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Fancl Corp (4921 JP)

Shiseido: POS Alternative Data Report - 2Q19 Earnings

Shiseido is scheduled to release its 2Q19 earnings on 8th August 2019. All other Japanese cosmetic companies have already reported their results...

Oshadhi Kumarasiri

Business Alliance Between Kirin & FANCL

Today, 6th August 2019 Kirin Holdings and FANCL Corporation made an announcement regarding a capital and a business alliance between the two...

Oshadhi Kumarasiri

Fancl: Explanatory Meeting On Kirin's Stake Acquisition Light on Details but Stay Positive Anyway

At about 3:30pm JST news broke that Kirin Holdings (2503 JP) would acquire a 30.3% stake in Fancl Corp (4921 JP) from the company's founder and his...

Mio Kato

FANCL: Truedata POS Alternative Data Report: Robust Growth in 1QFY03/20 Via New Products

Our analysis of Truedata POS sales of FANCL’s Nutritional Supplements business indicates a 23% YoY growth in 1QFY03/20. A big part of this growth...

Oshadhi Kumarasiri

🇯🇵 Japan • Relative Price Scores - Overbought & Oversold Companies - June 2019

• RELATIVE PRICE SCORE • INTRODUCTION - The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by...

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)