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

Roland Returns at Cheaper Multiples: Not Going to Sing Well With Yamaha

Short Roland/Long Yamaha as Roland May Fail to Meet Demand Due to Production Shortages

Roland IPO Valuation: Cyclicality Unaccounted For

Roland Corporation IPO: More In Tune Than Yamaha Lately

Roland Corporation IPO: Better Prepared for Cyclicality Than Before

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 Capital Markets

<ul>
<li>The <a href="https://www.smartkarma.com/entities/roland-corp" target="_blank" data-smartkarma-citation="entities:30727:1" rel="noopener">Roland Corp (7944 JP)</a> IPO, which is scheduled to list on the first section of the Tokyo Stock Exchange on 16th December 2020, was priced at  ¥3,100 per share on 8th December. The application period started on 9th December and will remain open until 14th Monday.</li>
<li>After a woeful period following the global financial crisis, that resulted in a MBO and delisting from the Tokyo Stock Exchange in 2014, Roland has made a number of changes to its business and has outperformed the local peer <a href="https://www.smartkarma.com/entities/yamaha-corp" target="_blank" data-smartkarma-citation="entities:17841:1" rel="noopener">Yamaha Corp (7951 JP)</a> and the overall electronic musical instrument industry through 2015-20.</li>
<li>We prefer Roland over Yamaha on a relative value basis, since Roland has trimmed its fixed costs, streamlined operations, and stands in a strong financial position heading into a tough time period in the business cycle. Roland is priced at a discount to its closest peer, Yamaha. However, the domestic musical instruments industry is currently overvalued, considering the cyclical nature of the business. Therefore, we would avoid this IPO on long-term fundamentals.</li>
<li>Nonetheless, Roland could be an excellent hedge for a short position in Yamaha.</li>
</ul>


The Roland Corp (7944 JP) IPO, which is scheduled to list on the first section of the Tokyo Stock Exchange on 16th December 2020, was priced at  ¥3,100 per share on 8th December. The application period started on 9th December and will remain open until 14th Monday.
After a woeful period following the global financial crisis, that resulted in a MBO and delisting from the Tokyo Stock Exchange in 2014, Roland has made a number of changes to its business and has outperformed the local peer Yamaha Corp (7951 JP) and the overall electronic musical instrument industry through 2015-20.
We prefer Roland over Yamaha on a relative value basis, since Roland has trimmed its fixed costs, streamlined operations, and stands in a strong financial position heading into a tough time period in the business cycle. Roland is priced at a discount to its closest peer, Yamaha. However, the domestic musical instruments industry is currently overvalued, considering the cyclical nature of the business. Therefore, we would avoid this IPO on long-term fundamentals.
Nonetheless, Roland could be an excellent hedge for a short position in Yamaha.


Roland Corp

Roland IPO: Valuation