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

The Fast Retailing (9983) Selldown Conundrum - Not Now, But Soon... Then For A Long Time

Nikkei 225 Sep 2023 Review - Still Fastie, Nitori, Zozo, and Lasertec as Interesting Names

Fast Retailing: Growth Markets Look Weak & Uniqlo Japan Profitability Affected By Rising Wages

Fast Retailing: Japan Demand Not Enough to Warrant an Upside, Downside Risks Looming on The Horizon

Fast Retailing: Another Beat Would Suggest That FR’s North America & Europe Expansion Is Viable

Gravity Works As WeWork Doesn't; Now Plan B

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>Consensus FY+2 EBIT seems inflated by around 16%, driven by optimistic assumptions of recovery in China and growth in North America and Europe.</li>
<li>However, apparel demand in China was lower than expected, while wage hikes and a potential US recession could negatively impact profitability in the short-medium term.</li>
<li>As risks are skewed to the downside, we remain short <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> leading up to 2QFY23 results.</li>
</ul>


Consensus FY+2 EBIT seems inflated by around 16%, driven by optimistic assumptions of recovery in China and growth in North America and Europe.
However, apparel demand in China was lower than expected, while wage hikes and a potential US recession could negatively impact profitability in the short-medium term.
As risks are skewed to the downside, we remain short Fast Retailing (9983 JP) leading up to 2QFY23 results.


Fast Retailing: Inflated Earnings Expectations & Stretched Multiples, A Cause for Concern