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

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.

Event-Driven

<ul><li>
<a href="https://www.smartkarma.com/entities/christian-dior-se" target="_blank" data-smartkarma-citation="entities:21415:1" rel="noopener">Christian Dior SE (CDI FP)</a>’s 41.2% owned listed subsidiary, <a href="https://www.smartkarma.com/entities/lvmh-moet-hennessy-louis-vui" target="_blank" data-smartkarma-citation="entities:21072:1" rel="noopener">Lvmh Moet Hennessy Louis Vuitton (MC FP)</a>, has outperformed Christian Dior shares by over 31% since LVMH made a non-binding proposal to acquire the US luxury jewellery and speciality retailer <a href="https://www.smartkarma.com/entities/tiffany-co" target="_blank" data-smartkarma-citation="entities:14729:1" rel="noopener">Tiffany &amp; Co (TIF US)</a>.</li></ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/184/744/original/image_9822495321611673131890.png?1611673132" class="editor-image img-responsive" data-smartkarma-image-id="184744"></figure><ul>
<li>After a lawsuit and a counter lawsuit by Tiffany and LVMH respectively, (LVMH requested an amended deal due to COVID-19 led disruptions) LVMH finally managed to complete the acquisition on 7<sup>th</sup> January for $15.8bn, a 3% discount to LVMH’s original offer.</li>
<li>Dior is 97.4% owned by the Arnault Family and therefore has a very low free float compared to LVMH’s 50% free float. The lack of liquidity meant that Dior failed to keep up with LVMH’s share price movement, even though Dior’s only source of revenue/income is LVMH.</li>
<li>Dior’s current NAV discount is 23.9%, compared to an average of 4.0% during 2018-3Q2019. As the trading volume of LVMH normalises following the Tiffany transaction, we expect Dior’s NAV discount to return to the undisturbed long-term average discount range of 10-18%.</li>
</ul>


Christian Dior SE (CDI FP)’s 41.2% owned listed subsidiary, Lvmh Moet Hennessy Louis Vuitton (MC FP), has outperformed Christian Dior shares by over 31% since LVMH made a non-binding proposal to acquire the US luxury jewellery and speciality retailer Tiffany &amp; Co (TIF US).
After a lawsuit and a counter lawsuit by Tiffany and LVMH respectively, (LVMH requested an amended deal due to COVID-19 led disruptions) LVMH finally managed to complete the acquisition on 7th January for $15.8bn, a 3% discount to LVMH’s original offer.
Dior is 97.4% owned by the Arnault Family and therefore has a very low free float compared to LVMH’s 50% free float. The lack of liquidity meant that Dior failed to keep up with LVMH’s share price movement, even though Dior’s only source of revenue/income is LVMH.
Dior’s current NAV discount is 23.9%, compared to an average of 4.0% during 2018-3Q2019. As the trading volume of LVMH normalises following the Tiffany transaction, we expect Dior’s NAV discount to return to the undisturbed long-term average discount range of 10-18%.


Christian Dior: Holdco Discount Could Normalise Following the Completion of Tiffany Acquisition