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

Base Inc: Splits Shares & Institutional Investors Are Taking Profits Amidst Slowing Growth

Base Inc: Could Lose Big from Growth to Value Rotation

Base Inc: The Long Tail May Not Be That Long

BASE Inc: Downside Risks Mount As EV/Sales Peak

Base Inc Bubble Is Still Far From Bursting

BASE Inc Moves to Service E-Commerce Via MOSH Acquisition

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/base-inc" target="_blank" data-smartkarma-citation="entities:28353:1" rel="noopener">BASE Inc (4477 JP)</a> delivered 4Q20 results yesterday with revenue and gross profit growth of 104.8% and 108.4% YoY respectively in 4Q20. However, operating loss expanded 113% YoY to ¥343m due to an increase in promotional expenditure.The company’s 2021 revenue guidance of ¥9,750-10,536m (17.6%-27.1% YoY) suggests that BASE Inc’s revenue growth is expected to decelerate rapidly following a temporary increase in 2020 due to COVID. This rapid deceleration in revenue growth is expected while there is a substantial increase in promotional spending. 2021 OP guidance ¥-1,433 to -929m compared to an operating profit of ¥803m in 2020. Therefore, Base Inc’s growth prospects in the domestic market could be somewhat limited and at 15.8x consensus FY+2 EV/Sales (2022 revenue: ¥15,593, 48% YoY), Base Inc appears significantly overvalued. However, the announced five to one stock split effective on 1st April 2021 could be a catalyst for a short-term rally. Thus, we would wait for Base Inc’s share price to react to the stock split news before arranging a short position.

BASE Inc (4477 JP) delivered 4Q20 results yesterday with revenue and gross profit growth of 104.8% and 108.4% YoY respectively in 4Q20. However, operating loss expanded 113% YoY to ¥343m due to an increase in promotional expenditure.The company’s 2021 revenue guidance of ¥9,750-10,536m (17.6%-27.1% YoY) suggests that BASE Inc’s revenue growth is expected to decelerate rapidly following a temporary increase in 2020 due to COVID. This rapid deceleration in revenue growth is expected while there is a substantial increase in promotional spending. 2021 OP guidance ¥-1,433 to -929m compared to an operating profit of ¥803m in 2020. Therefore, Base Inc’s growth prospects in the domestic market could be somewhat limited and at 15.8x consensus FY+2 EV/Sales (2022 revenue: ¥15,593, 48% YoY), Base Inc appears significantly overvalued. However, the announced five to one stock split effective on 1st April 2021 could be a catalyst for a short-term rally. Thus, we would wait for Base Inc’s share price to react to the stock split news before arranging a short position.

BASE Inc

Base Inc: Taking a Wrong Turn