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

Further Downside Is Possible As Kose Keeps Losing Ground in Japan

Kose: China and E-Commerce Propels Kose’s Performance Towards the Pre-Pandemic Level

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

<a href="https://www.smartkarma.com/entities/kose-corp" target="_blank" data-smartkarma-citation="entities:18009:1" rel="noopener">Kose Corp (4922 JP)</a>’s share price dropped 12.2% today after a disappointing 2Q21 results release on 30th July 2021 (aftermarket) with revenue and OP growth of 2.7% and 210.5% respectively from the same period of the COVID affected previous year.
Quarterly revenue was down 21.9% on a QoQ basis. Yet, the OP increased 57.5% QoQ on cost controls.  Even though there is an impact from seasonality, the entire QoQ revenue decline is not accounted for by seasonal changes (Kose’s 1H21 revenue declined 1.4% YoY).
The company has shifted to a December year-end and therefore quarterly consensus estimates are unavailable. However, the company has maintained its guidance for the 9 months from April-December 2021 at ¥230bn in revenue and ¥20bn in OP, which implies a full-year revenue and OP of ¥313.3bn and ¥22.2bn respectively in CY2021 compared to ¥282.8bn and ¥13.5bn in the COVID affected previous calendar year.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/221/684/original/image_8875511821627900294641.png?1627900295" class="editor-image img-responsive" data-smartkarma-image-id="221684"></figure>

Kose Corp (4922 JP)’s share price dropped 12.2% today after a disappointing 2Q21 results release on 30th July 2021 (aftermarket) with revenue and OP growth of 2.7% and 210.5% respectively from the same period of the COVID affected previous year.
Quarterly revenue was down 21.9% on a QoQ basis. Yet, the OP increased 57.5% QoQ on cost controls.  Even though there is an impact from seasonality, the entire QoQ revenue decline is not accounted for by seasonal changes (Kose’s 1H21 revenue declined 1.4% YoY).
The company has shifted to a December year-end and therefore quarterly consensus estimates are unavailable. However, the company has maintained its guidance for the 9 months from April-December 2021 at ¥230bn in revenue and ¥20bn in OP, which implies a full-year revenue and OP of ¥313.3bn and ¥22.2bn respectively in CY2021 compared to ¥282.8bn and ¥13.5bn in the COVID affected previous calendar year.


Asia Growth Hits The Breaks, KOSE Tumbles 12.2%