Daily Brief Consumer: Samyang Foods, Fancl Corp, Sumitomo Electric Industries and more

In today’s briefing:

KOSPI 200 Ad-Hoc Change: Hyundai Greenfood Out & Samyang Foods Fresh Buy-In on April 10
FANCL: The Flagship FANCL Brand in Trouble
Sumitomo Electric Industries (5802 JP) – LT Momentum Confirms Material Upside Potential in 2023

KOSPI 200 Ad-Hoc Change: Hyundai Greenfood Out & Samyang Foods Fresh Buy-In on April 10

From a trading perspective, we should pay attention to the KOSPI 200 corporate actions in Hyundai Department Group’s demerger events, as both companies are KOSPI 200 constituents.
Hyundai Green Food’s surviving company won’t beat the cutoff, resulting in a KOSPI 200 constituent change on April 10. Samyang Foods will be a new addition.
Even the size of KOSPI 200 ETFs that will likely go into mechanical trading on April 10 will cause a significant price impact from a day trading perspective.

Fancl Corp (4921 JP) delivered 3QFY23 results yesterday, which saw revenue and operating profit decrease by 2.5% and 5.0% YoY respectively to ¥28.3bn (consensus ¥29.8bn) and ¥3.1bn (consensus ¥3.4bn).
Cosmetics growth being the main reason for Fancl’s FY+2 EV/OP of 22.4x, recent trends look scary with cosmetics revenue and OP down 24% and 27% respectively from the pre-COVID level.
Therefore, we would look to short Fancl expecting shares to fall around 25-30% in the short term.

At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
Q1 2023 is confirming that the base built around the historically significant 50 quarter MA since Q3 2021 is likely to be a material LT bottom.
Both price action and LT momentum triggers (particularly the quarterly RSI) are confirming a sustainable LT uptrend in 2023 and potentially well into 2024. Potential 20% upswing.

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