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

Shiseido: Departing From Cost Discipline or Playing Safe?

Shiseido’s 2023 Transformation Plan Kicks Into Gear With The Proposed Sale of The Personal-Care Unit

Long Shiseido/Short KOSE As Japanese Cosmetics Shift Focus to Margin Expansion

Japanese Cosmetics Industry Statistics- May 2020: China Recovers While Domestic Demand Deteriorates

Japanese Cosmetics Statistics: 1Q20 Earnings Is Just a Preview, Expect the Worst in 2Q20

Shiseido 1Q20 Earnings Preview: Market More Cautious than Consensus

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

As lockdowns and restrictions eased towards the end of the second quarter and into the third quarter, Japanese cosmetics companies are expected to stage a comeback in 3Q2020. As a result, all major Japanese cosmetics companies (excluding Pola Orbis, who is struggling to regain its mojo) are trading near their historical high FY+2 EV/EBIT multiples.Main overseas markets have performed exceptionally well during the July and August 2020 months. Japan’s cosmetics exports to main countries grew 23% year-on-year during the July-August period compared to 4.5% in 2Q20.However, domestic sales during July and August 2020 remained 25-30% lower than the pre-pandemic level. We believe the immediate domestic cosmetics sales recovery could be over. The 25-30% loss of domestic demand is predominantly a result of non-existent inbound sales while behavioural changes due to COVID-19 may have also had a small impact. We expect the behavioural changes to have a lasting impact on domestic demand. However, as travel restrictions are lifted inbound demand could return and warrant a sharp increase in domestic sales.In this insight, we analyse Japan’s cosmetic industry using the monthly data released by the Ministry of Economy, Trade and Industry (METI) and the Ministry of Finance.

As lockdowns and restrictions eased towards the end of the second quarter and into the third quarter, Japanese cosmetics companies are expected to stage a comeback in 3Q2020. As a result, all major Japanese cosmetics companies (excluding Pola Orbis, who is struggling to regain its mojo) are trading near their historical high FY+2 EV/EBIT multiples.Main overseas markets have performed exceptionally well during the July and August 2020 months. Japan’s cosmetics exports to main countries grew 23% year-on-year during the July-August period compared to 4.5% in 2Q20.However, domestic sales during July and August 2020 remained 25-30% lower than the pre-pandemic level. We believe the immediate domestic cosmetics sales recovery could be over. The 25-30% loss of domestic demand is predominantly a result of non-existent inbound sales while behavioural changes due to COVID-19 may have also had a small impact. We expect the behavioural changes to have a lasting impact on domestic demand. However, as travel restrictions are lifted inbound demand could return and warrant a sharp increase in domestic sales.In this insight, we analyse Japan’s cosmetic industry using the monthly data released by the Ministry of Economy, Trade and Industry (METI) and the Ministry of Finance.

Japanese Cosmetics Stats: Absent Inbound Demand Pauses Domestic Recovery, Exports Grow Double-Digits

Shiseido Company

Japanese Cosmetics Stats: Absent Inbound Demand Pauses Domestic Recovery, Exports Grow Double-Digits