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>The market position of Japanese cosmetics in China is weakening with Japanese exports declining around 5.0% YoY in January and February 2022.</li>
<li>With Shanghai under a strict lockdown and the recovery of inbound demand taking more time than expected, it is possible that <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> could downgrade its 2022 guidance.</li>
<li>These forces could take Shiseido’s valuation multiples to the pre-2013 level, resulting in a downside of close to 30%.</li>
</ul>


The market position of Japanese cosmetics in China is weakening with Japanese exports declining around 5.0% YoY in January and February 2022.
With Shanghai under a strict lockdown and the recovery of inbound demand taking more time than expected, it is possible that Shiseido Company (4911 JP) could downgrade its 2022 guidance.
These forces could take Shiseido’s valuation multiples to the pre-2013 level, resulting in a downside of close to 30%.


Shiseido: Shanghai Lockdown Adds Pressure to Faltering Japanese Cosmetics

<ul>
<li>We last wrote on this relatively small Japanese cosmetics company in September 2021 suggesting that it could be worth keeping an eye on given its cheaper valuation compared to peers.</li>
<li>
<a href="https://www.smartkarma.com/entities/premier-anti-aging-co-ltd" target="_blank" data-smartkarma-citation="entities:34292:1" rel="noopener">Premier Anti-Aging (4934 JP)</a> shares are down 80% from the peak, mostly because it was sold-off alongside the low quality names in Mothers.</li>
<li>It seems early to turn outright bullish on Premier Anti-Aging yet. However, if you are short other unprofitable names in Mothers, we think Premier Anti-Aging is a sensible long hedge.</li>
</ul>


We last wrote on this relatively small Japanese cosmetics company in September 2021 suggesting that it could be worth keeping an eye on given its cheaper valuation compared to peers.

Premier Anti-Aging (4934 JP) shares are down 80% from the peak, mostly because it was sold-off alongside the low quality names in Mothers.
It seems early to turn outright bullish on Premier Anti-Aging yet. However, if you are short other unprofitable names in Mothers, we think Premier Anti-Aging is a sensible long hedge.


Premier Anti-Aging Company:  Getting to an Interesting Level

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

<ul>
<li>In this insight, we discuss the recent COVID-19 stats including cases, deaths, and recovery/death rates.</li>
<li>In addition, we analyze the easing of travel restrictions among major Asian countries including Australia, India, Japan, Singapore, Thailand, and South Korea. </li>
<li>More countries are treating COVID-19 not as a pandemic but as a serious flu. </li>
</ul>


In this insight, we discuss the recent COVID-19 stats including cases, deaths, and recovery/death rates.
In addition, we analyze the easing of travel restrictions among major Asian countries including Australia, India, Japan, Singapore, Thailand, and South Korea. 
More countries are treating COVID-19 not as a pandemic but as a serious flu. 


A Review of COVID-19 Cases & The Easing of Travel Restrictions in Major Asian Countries

<ul>
<li>With Omicron under control, Japan is expected to relax home quarantine requirements for foreign travellers some time or the other.</li>
<li>Meanwhile, Google Mobility data hints that domestic customers are starting to head back to places like shopping centres, suggesting an improvement in demand conditions.</li>
<li>Based on valuation and the price performance trend, long time underperformer <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> seems like the best option to capitalise on the reopening of Japan to foreign tourists.</li>
</ul>


With Omicron under control, Japan is expected to relax home quarantine requirements for foreign travellers some time or the other.
Meanwhile, Google Mobility data hints that domestic customers are starting to head back to places like shopping centres, suggesting an improvement in demand conditions.
Based on valuation and the price performance trend, long time underperformer Pola Orbis Holdings (4927 JP) seems like the best option to capitalise on the reopening of Japan to foreign tourists.


Pola Orbis: Our Preferred Choice Leading up The Reopening of Japan to Foreign Tourists

Equity Long-Short Analyst

Pyari Menon

<ul>
<li>Procter &amp; Gamble Co (PG US), Amorepacific Corp (090430 KS), L'Oreal SA (OR FP), <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>,  and Kao Corp (4452 JP), lead product innovation table</li>
<li>Among the smaller names <a href="https://www.smartkarma.com/entities/cosmax-inc" target="_blank" data-smartkarma-citation="entities:4491:1" rel="noopener">Cosmax Inc (192820 KS)</a>, Pola Orbis Holdings (4927 JP),  <a href="https://www.smartkarma.com/entities/kolmar-bnh-co-ltd" target="_blank" data-smartkarma-citation="entities:33240:1" rel="noopener">Kolmar BNH (200130 KS)</a>, have been relatively prolific in innovating over the last three years.</li>
<li>Apart from the quality of the ingredients, consistency, stability of the formulations, the packaging, dispensing, virtual try-on, personalized recommendations, sustainability seem to be some of the key trends in innovations.</li>
</ul>


Procter &amp; Gamble Co (PG US), Amorepacific Corp (090430 KS), L'Oreal SA (OR FP), LG Household &amp; Health Care (051900 KS),  and Kao Corp (4452 JP), lead product innovation table
Among the smaller names Cosmax Inc (192820 KS), Pola Orbis Holdings (4927 JP),  Kolmar BNH (200130 KS), have been relatively prolific in innovating over the last three years.
Apart from the quality of the ingredients, consistency, stability of the formulations, the packaging, dispensing, virtual try-on, personalized recommendations, sustainability seem to be some of the key trends in innovations.


Insights from Datamining Technical Publications - Cosmetics

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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Shiseido Company (4911 JP)

Shiseido: Shanghai Lockdown Adds Pressure to Faltering Japanese Cosmetics

With Shanghai under a strict lockdown and the recovery of inbound demand taking more time than expected, it is possible that Shiseido could...

Oshadhi Kumarasiri

Premier Anti-Aging Company: Getting to an Interesting Level

Premier Anti-Aging’s current multiple is around 27% below the sector’s cyclical low multiple suggesting that there could be significant upside...

Oshadhi Kumarasiri

A Review of COVID-19 Cases & The Easing of Travel Restrictions in Major Asian Countries

We discuss the recent COVID-19 stats including cases, deaths, and recovery/death rates in major Asian countries. More countries are treating COVID...

Douglas Kim

Pola Orbis: Our Preferred Choice Leading up The Reopening of Japan to Foreign Tourists

Based on valuation and the price performance trend, long time underperformer Pola Orbis seems like the best option to capitalise on the reopening...

Oshadhi Kumarasiri

Insights from Datamining Technical Publications - Cosmetics

The beauty industry - where innovation can be real and driven by science, but sometimes just cosmetic to just change the perception

Pyari Menon

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