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

<ul>
<li>A couple of Japanese cosmetics names, reported their quarterly results this week, with considerable earnings misses</li>
<li>
<a href="https://www.smartkarma.com/entities/kao-corp" target="_blank" data-smartkarma-citation="entities:12933:1" rel="noopener">Kao Corp (4452 JP)</a> fell 8.5% today following a 40% OP miss while <a href="https://www.smartkarma.com/entities/pola-orbis-holdings-inc" target="_blank" data-smartkarma-citation="entities:2287:1" rel="noopener">Pola Orbis Holdings (4927 JP)</a> was flat after a narrow miss of 2% from a relatively low consensus estimate.</li>
<li>If the two reports released this week are something to go by, we could expect large misses, for <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl Corp (4921 JP)</a> and <a href="https://www.smartkarma.com/entities/kose-corp" target="_blank" data-smartkarma-citation="entities:18009:1" rel="noopener">Kose Corp (4922 JP)</a> next week.</li>
</ul>


A couple of Japanese cosmetics names, reported their quarterly results this week, with considerable earnings misses

Kao Corp (4452 JP) fell 8.5% today following a 40% OP miss while Pola Orbis Holdings (4927 JP) was flat after a narrow miss of 2% from a relatively low consensus estimate.
If the two reports released this week are something to go by, we could expect large misses, for Fancl Corp (4921 JP) and Kose Corp (4922 JP) next week.


Japanese Cosmetics: Trading Around Q3 Earnings

Shifara Samsudeen, ACMA, CGMA

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/giant-biogene-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:35950:1" rel="noopener">Giant Biogene Holding (GBH HK)</a> designs, develops and manufactures professional skin treatment products with recombinant collagen as the key bioactive ingredient in China.</li>
<li>The company’s IPO offering has been downsized and now plans to raise approx. US$80m through issuing 22.6m shares at an indicative IPO price range of HK$24.3-27.7 per share.</li>
<li>Our analysis shows that Giant Biogene’s IPO is attractively priced compared to domestic and international peers, however, we expect the upside to be limited given the current market volatility.</li>
</ul>



Giant Biogene Holding (GBH HK) designs, develops and manufactures professional skin treatment products with recombinant collagen as the key bioactive ingredient in China.
The company’s IPO offering has been downsized and now plans to raise approx. US$80m through issuing 22.6m shares at an indicative IPO price range of HK$24.3-27.7 per share.
Our analysis shows that Giant Biogene’s IPO is attractively priced compared to domestic and international peers, however, we expect the upside to be limited given the current market volatility.


Giant Biogene IPO: Peer Comparison and Valuation

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/giant-biogene-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:35950:1" rel="noopener">Giant Biogene Holding (GBH HK)</a> has launched its HKEx listing atHK$24.30-27.70 per share to raise up to US$80 million, materially below previous expectations of a US$500 million raise.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/giant-biogene-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:81963" rel="noopener">Giant Biogene IPO: The Bull Case</a>, <a href="https://www.smartkarma.com/insights/giant-biogene-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:82037" rel="noopener">Giant Biogene IPO: The Bear Case</a> and<a href="https://www.smartkarma.com/insights/giant-biogene-ipo-valuation-first-look" target="_blank" data-smartkarma-citation="insights:82648" rel="noopener">Giant Biogene IPO: Valuation First Look</a>.</li>
<li>The China A Share peers have derated due to the sharp sell-off in the last few days. Nevertheless, Biogene is attractively valued at the IPO price range. We would participate. </li>
</ul>



Giant Biogene Holding (GBH HK) has launched its HKEx listing atHK$24.30-27.70 per share to raise up to US$80 million, materially below previous expectations of a US$500 million raise.
We previously discussed the IPO in Giant Biogene IPO: The Bull Case, Giant Biogene IPO: The Bear Case andGiant Biogene IPO: Valuation First Look.
The China A Share peers have derated due to the sharp sell-off in the last few days. Nevertheless, Biogene is attractively valued at the IPO price range. We would participate. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/giant-biogene-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:35950:1" rel="noopener">Giant Biogene Holding (GBH HK)</a>, a leading professional skin care product manufacturer, is set to launch a US$500 million HKEx IPO.  </li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/giant-biogene-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:81963" rel="noopener">Giant Biogene IPO: The Bull Case</a> and <a href="https://www.smartkarma.com/insights/giant-biogene-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:82037" rel="noopener">Giant Biogene IPO: The Bear Case</a>.</li>
<li>In this note, we present our forecasts and take the first look at Giant Biogene's potential valuation range. </li>
</ul>



Giant Biogene Holding (GBH HK), a leading professional skin care product manufacturer, is set to launch a US$500 million HKEx IPO.  
We previously discussed the IPO in Giant Biogene IPO: The Bull Case and Giant Biogene IPO: The Bear Case.
In this note, we present our forecasts and take the first look at Giant Biogene's potential valuation range. 


<ul>
<li>The latest rally in Japanese cosmetics, driven by improving domestic market conditions has strangely avoided two of the big names in the market, <a href="https://www.smartkarma.com/entities/shiseido-co-ltd" target="_blank" data-smartkarma-citation="entities:5718:1" rel="noopener">Shiseido Company (4911 JP)</a> &amp; Pola Orbis.</li>
<li>Although both of these names seem to offer big upside potential, we think <a href="https://www.smartkarma.com/entities/pola-orbis-holdings-inc" target="_blank" data-smartkarma-citation="entities:2287:1" rel="noopener">Pola Orbis Holdings (4927 JP)</a> has a significantly better risk-reward profile in the short term.</li>
<li>We would also be inclined to hedge the market risk using <a href="https://www.smartkarma.com/entities/kose-corp" target="_blank" data-smartkarma-citation="entities:18009:1" rel="noopener">Kose Corp (4922 JP)</a> on the short side as the name has the biggest downside potential.</li>
</ul>


The latest rally in Japanese cosmetics, driven by improving domestic market conditions has strangely avoided two of the big names in the market, Shiseido Company (4911 JP) &amp; Pola Orbis.
Although both of these names seem to offer big upside potential, we think Pola Orbis Holdings (4927 JP) has a significantly better risk-reward profile in the short term.
We would also be inclined to hedge the market risk using Kose Corp (4922 JP) on the short side as the name has the biggest downside potential.


Japan

KOSE Corporation manufactures, retails, and exports cosmetics including make up, skin care, and hair care products.  The Company sells its products in Hong Kong, China, Singapore, and Malaysia.

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Kose Corp (4922 JP)

Japanese Cosmetics: Trading Around Q3 Earnings

POla Orbis signalled tough conditions in both local and overseas markets with domestic revenue falling by 1.8% YoY and overseas business affected...

Oshadhi Kumarasiri

Giant Biogene IPO: Peer Comparison and Valuation

Though Biogene's offer is significantly downsized, the IPO is priced attractively compared to doemstic and international peers. We expect limited...

Shifara Samsudeen, ACMA, CGMA

Giant Biogene IPO: Valuation Insights

The China A Share peers have derated due to the sharp sell-off in the last few days. Nevertheless, Biogene is attractively valued at the IPO price...

Arun George

Giant Biogene IPO: Valuation First Look

Giant Biogene will launch its US$500 million HKEx IPO this week. In this note, we present our forecasts and take the first look at its potential...

Arun George

Japanese Cosmetics: Trading Around Q3 Earnings

The latest rally in Japanese cosmetics, driven by improving domestic market conditions has strangely avoided two of the big names in the market,...

Oshadhi Kumarasiri

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