Equity Analyst, LightStream Research

Oshadhi Kumarasiri

An equity research analyst with over 7 years of experience in multiple sectors. Previously worked for one of the world's largest asset managers with about USD2.5trn in AUM, covering small and micro-cap companies in the consumer sphere across Europe and developed Asia. Also experienced in covering multiple industries including banking, insurance and asset management, retail, tech, telco and REIT.

Equity Analyst

A Belated Look Back at Our 2020 and 2021 Conviction Calls and a Look Ahead to 2022

Japan Tobacco: Likely to Increase Payout While Others Stash Their Cash

Japan Tobacco: Ploom X Is Taking the Fight to IQOS

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>After declining for more than five years, <a href="https://www.smartkarma.com/entities/japan-tobacco-inc" target="_blank" data-smartkarma-citation="entities:13498:1" rel="noopener">Japan Tobacco (2914 JP)</a>’s earnings momentum shifted after COVID-19 with both domestic and international segments expected to return to achieving growth in 2021.</li>
<li>The company is expected to make an EBIT of around ¥580-600bn in 2021, which is more than JT’s 2016 EBIT.</li>
<li>With profitability surpassing the 2016 level during the next few years, we think JT’s share price could return to the 2016 level of around ¥4,000 per share.</li>
</ul>


After declining for more than five years, Japan Tobacco (2914 JP)’s earnings momentum shifted after COVID-19 with both domestic and international segments expected to return to achieving growth in 2021.
The company is expected to make an EBIT of around ¥580-600bn in 2021, which is more than JT’s 2016 EBIT.
With profitability surpassing the 2016 level during the next few years, we think JT’s share price could return to the 2016 level of around ¥4,000 per share.


2022 High Conviction - Japan Tobacco: The Comeback Story