In today’s briefing:
- Japan Eyewear Holdings (5889 JP): Amid China Fear There Are Reasons to Still Stay Bullish
- Timee: Market Overreacts to Potential Competition and Drop in Margins
Japan Eyewear Holdings (5889 JP): Amid China Fear There Are Reasons to Still Stay Bullish
- Japan Eyewear Holdings (5889 JP) reported 30% YoY revenue growth in H1FY25. Profit margins also remained high, with operating profit margin exceeding 33% and operating profit reaching ¥2.7B, 1.5x YoY.
- The company has left FY25 guidance unchanged. The company’s cautious stance, yen appreciation, and darkening outlook of China amid weak economic data are the major downside risks.
- We think reactions are overdone. Limited downside is expected from here. Encouraging SSS growth through continuous increases in unit price and accelerated store expansion will remain the key growth drivers.
Timee: Market Overreacts to Potential Competition and Drop in Margins
- Timee Inc (215A JP) ’s share price has declined 26% over the last five days with the company reporting 3QFY10/2024 earnings on 12th September 2024.
- As we expected, top line growth has further slowed down while OPM for the quarter has dropped both QoQ and YoY concerning investors over Timee’s ability to generate sustainable margins.
- Timee’s proven business model has attracted Mercari and Sharefull to offer similar services, nevertheless, we would not be too concerned as Timee has the first mover advantage.
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