Japan/Asia Long-Short, LightStream Research

Mio Kato

Over 15 years analysing Japanese and Asian stocks from a long/short perspective

I focus on cyclically driven sectors such as Gaming, Factory Automation and Autos

An eclectic background as a long-short analyst, upper management at a financial data startup through its listing, and as the founder of a team analysing big/alternative data, all of which supports independent and differentiated views... we hope

An appreciation for Mathematics drives the development of a "Micro-Quantamental" process which can provide a data-driven, historically-informed and semi-automated foundation upon which to layer more qualitative and judgemental analysis, thus improving investment decision-making speed and accuracy

Japan/Asia Long-Short

2021 High Conviction: ZOZO – Good Times Are Zo Far Away

Zozo – Nice Results but It’s Just a COVID Bump

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

<p>Zozo’s 3Q results on the 29<sup>th</sup> of Jan surprised to the upside and have driven the stock up 23.5% since then. Both revenue (¥42.0bn vs. consensus ¥38.8bn) and OP (¥13.9bn vs. consensus ¥9.8bn) beat significantly and the company also raised OP guidance from ¥39.5bn to ¥41.5bn, also touting expansion into luxury goods and cosmetics. The strong results and big stock price rise mirrors our other two conviction calls which just reported (Sony and Mazda), with the rather large caveat that Zozo was a conviction SHORT call. Nevertheless, we believe Zozo’s new, new initiatives will join their old, new initiatives as failures and we believe the strength of results are purely a function of pandemic inflated demand and a marketing push at PayPay Mall by Z Holdings. As such we remain undeterred and consider Zozo to be an extremely attractive short play that should lose well over 50% of its value over two to three years.</p>

Zozo’s 3Q results on the 29th of Jan surprised to the upside and have driven the stock up 23.5% since then. Both revenue (¥42.0bn vs. consensus ¥38.8bn) and OP (¥13.9bn vs. consensus ¥9.8bn) beat significantly and the company also raised OP guidance from ¥39.5bn to ¥41.5bn, also touting expansion into luxury goods and cosmetics. The strong results and big stock price rise mirrors our other two conviction calls which just reported (Sony and Mazda), with the rather large caveat that Zozo was a conviction SHORT call. Nevertheless, we believe Zozo’s new, new initiatives will join their old, new initiatives as failures and we believe the strength of results are purely a function of pandemic inflated demand and a marketing push at PayPay Mall by Z Holdings. As such we remain undeterred and consider Zozo to be an extremely attractive short play that should lose well over 50% of its value over two to three years.

ZOZO – Getting Gamestopped on This 2021 Conviction Call

ZOZO Inc

ZOZO – Getting Gamestopped on This 2021 Conviction Call