Asia Consumer Research, Investory

Devi Subhakesan

Asia Consumer Research

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Thematic (Sector/Industry)

<p><strong>Emerging Asia -</strong> notably China and India -  is witnessing a  steady expansion in the Male grooming sector as men's habits around personal care is shifting - led by a confluence of social, economic and <strong>compelling demographic factors</strong>. Expect this trend to gather more momentum as image-conscious young men adopt a wider array of personal care products. Skincare products that address specific needs/concerns of male customers will drive the early stage of segment growth; light cosmetics are picking up demand too. Companies that are quick to identify and address the demand with male-specific products/brands stand to gain from early mover advantage given male customers, reportedly, are far more brand loyal compared to female counterparts.</p>
<p><strong>What is original in this report?</strong> We discuss the social, economic and <strong>compelling demographic </strong>factors driving the shift and growth in the Male grooming sector in China and India. We look at the emerging trends across segments and in both the markets to arrive at a pecking order in terms of investment potential. We have scanned the personal care and cosmetics products landscape to shortlist brands and companies that offer a male-specific product range. A brief on select companies - private and listed -  are presented for further investment analysis and evaluation. </p>

Emerging Asia - notably China and India -  is witnessing a  steady expansion in the Male grooming sector as men's habits around personal care is shifting - led by a confluence of social, economic and compelling demographic factors. Expect this trend to gather more momentum as image-conscious young men adopt a wider array of personal care products. Skincare products that address specific needs/concerns of male customers will drive the early stage of segment growth; light cosmetics are picking up demand too. Companies that are quick to identify and address the demand with male-specific products/brands stand to gain from early mover advantage given male customers, reportedly, are far more brand loyal compared to female counterparts.
What is original in this report? We discuss the social, economic and compelling demographic factors driving the shift and growth in the Male grooming sector in China and India. We look at the emerging trends across segments and in both the markets to arrive at a pecking order in terms of investment potential. We have scanned the personal care and cosmetics products landscape to shortlist brands and companies that offer a male-specific product range. A brief on select companies - private and listed -  are presented for further investment analysis and evaluation. 

Male Grooming in Asia: Blooming Prospects. Skincare to Drive Growth

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<div class="content-highlight"><p>While Amorepacfic spent time building one of the most beautiful headquarters building in Korea in the past several years, LG H&amp;H has become the number one cosmetics company in Korea, bypassing Amorepacific. In this insight, we discuss the key investment merits of LG H&amp;H. Regardless of the market conditions over the next 6-12 months, we believe LG H&amp;H can outperform the overall market. </p></div><h2>Key Catalysts</h2><ul>
<li><strong>Excellent performance of the cosmetics business despite worst-ever global environment for cosmetics </strong></li>
<li>
<strong>Improving overseas online sales of luxury cosmetics</strong> </li>
<li><strong>Improving operating margins of the HDB (Home Care &amp; Daily Beauty) &amp; beverages business units</strong></li>
</ul><div class="content-highlight"><p><strong>We believe that LG H&amp;H has a 30%+ upside from current levels using the relative historical P/E and P/B valuation methods. LG H&amp;H's current price is 1,600,000 won, so a 30% upside would represent 2,080,000 won over a one year period.  </strong></p></div>

While Amorepacfic spent time building one of the most beautiful headquarters building in Korea in the past several years, LG H&amp;H has become the number one cosmetics company in Korea, bypassing Amorepacific. In this insight, we discuss the key investment merits of LG H&amp;H. Regardless of the market conditions over the next 6-12 months, we believe LG H&amp;H can outperform the overall market. Key Catalysts
Excellent performance of the cosmetics business despite worst-ever global environment for cosmetics 

Improving overseas online sales of luxury cosmetics 
Improving operating margins of the HDB (Home Care &amp; Daily Beauty) &amp; beverages business units
We believe that LG H&amp;H has a 30%+ upside from current levels using the relative historical P/E and P/B valuation methods. LG H&amp;H's current price is 1,600,000 won, so a 30% upside would represent 2,080,000 won over a one year period.  

Lg H&H - Will The "Magic" Of the CEO Cha Continue?

<div class="content-highlight">
<p><strong>In this insight, we provide an updated SoTP valuation analysis on <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a>. We have a positive view of this stock. Our base case valuation analysis suggests an implied price of 120,787 won per share, representing a 60% upside from current levels.</strong></p>
</div>
<p>In addition to its deep discount versus its NAV, there are also 4 key catalysts for the company which are as follows:</p>
<ul>
<li><strong>Potential for higher dividends</strong></li>
<li><strong>IPO of LG Energy Solutions</strong></li>
<li>
<strong>Split of LG International and LG Hausys </strong><strong>from the LG Group </strong>
</li>
<li><strong> Time to Close to the Gaps With Major Affiliates </strong></li>
</ul>


In this insight, we provide an updated SoTP valuation analysis on LG Corp (003550 KS). We have a positive view of this stock. Our base case valuation analysis suggests an implied price of 120,787 won per share, representing a 60% upside from current levels.

In addition to its deep discount versus its NAV, there are also 4 key catalysts for the company which are as follows:

Potential for higher dividends
IPO of LG Energy Solutions

Split of LG International and LG Hausys from the LG Group 

 Time to Close to the Gaps With Major Affiliates 


Founder/CEO of ROK Advisory, ROK Advisory LLC

Ken S. Kim

Founder/CEO of ROK Advisory

ROK Advisory LLC

ROK is an independent research advisory firm. We guide you to minimize the information gap between foreign and local investors in Northeast Asia with a focus in Korea, Taiwan and Japan.

Independent Research Advisory Firm

<div>While the details are scarce, local press is reporting that SKT and AMZN has been in talks for more than a year and would allow really an export/import biz on both of their channels (ie Korean products to be bought by US consumers and US products to be bought thru 11th St (SK's ecommerce portal) for Koreans. </div><div></div><div>This can't be good for the ecommerce players in Korea.  In the US, if you hear that AMZN is coming in whatever business, the whole sector falls.   Is Naver next? </div>

While the details are scarce, local press is reporting that SKT and AMZN has been in talks for more than a year and would allow really an export/import biz on both of their channels (ie Korean products to be bought by US consumers and US products to be bought thru 11th St (SK's ecommerce portal) for Koreans. This can't be good for the ecommerce players in Korea.  In the US, if you hear that AMZN is coming in whatever business, the whole sector falls.   Is Naver next? 

AMZN into Korea - "We Are Not Here to Take Part, We're Here to Take Over!"

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (HK) (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/idreamsky-technology-holdings" target="_blank" data-smartkarma-citation="entities:5570:1" rel="noopener">iDreamsky Technology Limited (1119 HK)</a> and <a href="https://www.smartkarma.com/entities/galaxy-entertainment-group-limited" target="_blank" data-smartkarma-citation="entities:806:1" rel="noopener">Galaxy Entertainment Group (27 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a> and <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK)</a> . Shorts increased in Real Estate, Energy and Consumer Staples and decreased in Financials, Consumer Discretionary, Health Care and Communication Services.</p></div><div>
<p>There was a lot of short covering in Japan during the week. Stocks that saw the most shorts covered were <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a>, <a href="https://www.smartkarma.com/entities/asahi-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10482:1" rel="noopener">Asahi Group Holdings (2502 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a> and <a href="https://www.smartkarma.com/entities/taiyo-yuden-co-ltd" target="_blank" data-smartkarma-citation="entities:9924:1" rel="noopener">Taiyo Yuden (6976 JP)</a>, while shorts increased on <a href="https://www.smartkarma.com/entities/nihon-m-a-center-inc" target="_blank" data-smartkarma-citation="entities:17616:1" rel="noopener">Nihon M&amp;A Center (2127 JP)</a>, <a href="https://www.smartkarma.com/entities/yamato-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2:1" rel="noopener">Yamato Holdings (9064 JP)</a>, <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a> and <a href="https://www.smartkarma.com/entities/mitsubishi-ufj-financial-group" target="_blank" data-smartkarma-citation="entities:218:1" rel="noopener">Mitsubishi UFJ Financial (MUFG) (8306 JP)</a>. Sectorally, the most shorts were covered in Consumer Staples, Information Technology, Consumer Discretionary and Financials.</p>
<p>Stocks in Korea that saw an increase in shorts were <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a> and <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> while stocks that saw the most short covering were <a href="https://www.smartkarma.com/entities/doosan-infracore-co-ltd" target="_blank" data-smartkarma-citation="entities:3982:1" rel="noopener">Doosan Infracore (042670 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-display-co-ltd" target="_blank" data-smartkarma-citation="entities:7145:1" rel="noopener">LG Display (034220 KS)</a>, <a href="https://www.smartkarma.com/entities/netmarble-corporation" target="_blank" data-smartkarma-citation="entities:22839:1" rel="noopener">Netmarble Corporation (251270 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-household-health-care" target="_blank" data-smartkarma-citation="entities:6501:1" rel="noopener">LG Household &amp; Health Care (051900 KS)</a>.</p>
</div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/largan-precision-co-ltd" target="_blank" data-smartkarma-citation="entities:9126:1" rel="noopener">Largan Precision (3008 TT)</a>, <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/genius-electronic-optical-co-ltd" target="_blank" data-smartkarma-citation="entities:9632:1" rel="noopener">Genius Electronic Optical (3406 TT)</a> and <a href="https://www.smartkarma.com/entities/hon-hai-precision-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:745:1" rel="noopener">Hon Hai Precision Industry (2317 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a>, <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a>, <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:6450:1" rel="noopener">United Microelectronics Corp (2303 TT)</a> and <a href="https://www.smartkarma.com/entities/ase-technology-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:27270:1" rel="noopener">ASE Technology Holding Co Ltd (3711 TT)</a>. </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on JD.com (HK) (9618 HK), Xiaomi Corp (1810 HK), iDreamsky Technology Limited (1119 HK) and Galaxy Entertainment Group (27 HK) while there was short covering on Alibaba Group (9988 HK), Tencent Holdings (700 HK), Ping An Insurance (H) (2318 HK) and Ping An Healthcare and Technology Company Limited (1833 HK) . Shorts increased in Real Estate, Energy and Consumer Staples and decreased in Financials, Consumer Discretionary, Health Care and Communication Services.
There was a lot of short covering in Japan during the week. Stocks that saw the most shorts covered were Fast Retailing (9983 JP), Asahi Group Holdings (2502 JP), Toshiba Corp (6502 JP) and Taiyo Yuden (6976 JP), while shorts increased on Nihon M&amp;A Center (2127 JP), Yamato Holdings (9064 JP), Canon Inc (7751 JP) and Mitsubishi UFJ Financial (MUFG) (8306 JP). Sectorally, the most shorts were covered in Consumer Staples, Information Technology, Consumer Discretionary and Financials.
Stocks in Korea that saw an increase in shorts were Kakao Corp (035720 KS) and Celltrion Inc (068270 KS) while stocks that saw the most short covering were Doosan Infracore (042670 KS), LG Display (034220 KS), Netmarble Corporation (251270 KS) and LG Household &amp; Health Care (051900 KS).
Stocks in Taiwan that saw the highest increase in shorts were Largan Precision (3008 TT), TSMC (2330 TT), Genius Electronic Optical (3406 TT) and Hon Hai Precision Industry (2317 TT) while shorts were covered on Yageo Corporation (2327 TT), Novatek Microelectronics Corp (3034 TT), United Microelectronics Corp (2303 TT) and ASE Technology Holding Co Ltd (3711 TT). 

Asia Short Interest Weekly: JD, Xiaomi, Nihon M&A, Asahi, Toshiba, Kakao, Netmarble, Largan, Novatek

South Korea

LG H&H Co., Ltd. manufactures and distributes cosmetics. The Company produces whoo, o hui, sum 37, basic cosmetics, color cosmetics, and other related products. LG H&H also produces toothpaste, soap, detergents, healthy, personal care, and refreshing products.

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LG H&H (Pref) (051905 KS)

Male Grooming in Asia: Blooming Prospects. Skincare to Drive Growth

Steady expansion in the Male grooming sector in China & India is led by a generational shift in grooming habits and not a passing fad. Only a few...

Devi Subhakesan

Lg H&H - Will The "Magic" Of the CEO Cha Continue?

In this insight, we discuss the key investment merits of LG H&H. Regardless of the market conditions over the next 6-12 months, we believe LG H&H...

Douglas Kim

LG Corp: Deep Value + 4 Key Catalysts

In this insight, we provide 4 key catalysts of LG Corp as well as an updated SoTP valuation analysis on the company. Our base case value suggests a...

Douglas Kim

AMZN into Korea - "We Are Not Here to Take Part, We're Here to Take Over!"

I guess the Koreans aren't scared of Amazon's entry into the ecommerce space! I'm a seller of Naver here on the news that Amazon will come into...

Ken S. Kim

Asia Short Interest Weekly: JD, Xiaomi, Nihon M&A, Asahi, Toshiba, Kakao, Netmarble, Largan, Novatek

Highlighting changes in short interest across stocks in HK, Japan, Korea and Taiwan to pinpoint stocks/sectors that are being shorted or covered...

Brian Freitas

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