QUICK Corp.

Equity Bottom-Up

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Promoting focus on the skin care and beauty care domain
SHISEIDO CO., LTD. launched a new medium-term management plan this fiscal year that covers the period through FY12/23. With an eye on the 'After-COVID-19' market, the company plans to reform its business structure, strengthen growth in China and other Asian countries, and keep further focus on products in the skin care and beauty care domain. The company aims to achieve sales of around JPY1tn and an OP margin of 15% in the final year. The…
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Focus on the skin care and beauty care domain. Downsizing in unprofitable areas The company launched a new medium-term management plan this fiscal year that covers the period through FY12/23. With an eye on the 'After COVID-19' market, the company has announced its plans to reform its business structure, strengthen growth in China and other Asian countries, and further focus on the skin care and beauty care domain as a product area. The company is aiming for sales of around JPY1tn and an OP…

Morningstar

Morningstar, Inc.

The global beauty industry has been a rare pocket of growth in the broader consumer landscape, growing at a roughly 4% rate over the last decade while other consumer goods firms have been plagued by lackluster volume, pricing pressure in categories facing secular declines, and heightened competition from niche players and privatelabel fare. We contend that several characteristics inherent to the beauty space, including a relatively price-insensitive consumer base, have helped these firms remain…

After nine months of the year, Shiseido is performing in line with our forecasts and we are reiterating our narrow moat rating and JPY 6,900 fair value estimate. Management’s full-year guidance is below our estimates, but it looks conservative and we are not making major changes to our estimates. We continue to think that management’s 2020 targets are achievable but we believe this is priced into the market price, which we regard as being slightly overvalued.
Analyst: Phillip Graham, CFA, FRM

Shiseido appears well on track to meet our full-year EBIT estimate of JPY 125 billion. At the halfway point of 2018, it is tracking slightly behind our 14% revenue growth assumption and comfortably ahead of our 11% EBIT margin forecast. We are maintaining our estimates in light of the recent strength of the Japanese yen, particularly against the Chinese renminbi, as this could slow inbound tourist volumes in the later part of the year. We remain skeptical about whether Shiseido's current growth…

Japan

Shiseido Company, Limited manufactures cosmetic and toiletry products. The Company offers an array of makeup and skin-care products, toiletries, beauty salon, pharmaceuticals, foodstuffs, and fine chemicals.

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