Equity Analyst - Asia Consumer Sector, Investory

Devi Subhakesan

Equity Analyst - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Thematic (Sector/Industry)

Emerging Asia - notably China and India -  is witnessing a  steady expansion in the Male grooming sector as men's habits around personal care is shifting - led by a confluence of social, economic and compelling demographic factors. Expect this trend to gather more momentum as image-conscious young men adopt a wider array of personal care products. Skincare products that address specific needs/concerns of male customers will drive the early stage of segment growth; light cosmetics are picking up demand too. Companies that are quick to identify and address the demand with male-specific products/brands stand to gain from early mover advantage given male customers, reportedly, are far more brand loyal compared to female counterparts.
What is original in this report? We discuss the social, economic and compelling demographic factors driving the shift and growth in the Male grooming sector in China and India. We look at the emerging trends across segments and in both the markets to arrive at a pecking order in terms of investment potential. We have scanned the personal care and cosmetics products landscape to shortlist brands and companies that offer a male-specific product range. A brief on select companies - private and listed -  are presented for further investment analysis and evaluation.

Emerging Asia - notably China and India -  is witnessing a  steady expansion in the Male grooming sector as men's habits around personal care is shifting - led by a confluence of social, economic and compelling demographic factors. Expect this trend to gather more momentum as image-conscious young men adopt a wider array of personal care products. Skincare products that address specific needs/concerns of male customers will drive the early stage of segment growth; light cosmetics are picking up demand too. Companies that are quick to identify and address the demand with male-specific products/brands stand to gain from early mover advantage given male customers, reportedly, are far more brand loyal compared to female counterparts.
What is original in this report? We discuss the social, economic and compelling demographic factors driving the shift and growth in the Male grooming sector in China and India. We look at the emerging trends across segments and in both the markets to arrive at a pecking order in terms of investment potential. We have scanned the personal care and cosmetics products landscape to shortlist brands and companies that offer a male-specific product range. A brief on select companies - private and listed -  are presented for further investment analysis and evaluation. 

Male Grooming in Asia: Blooming Prospects. Skincare to Drive Growth

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Friday, mid-cap specialist elevator maker (in the top ten globally) <a href="https://www.smartkarma.com/entities/fujitec-co-ltd" target="_blank" data-smartkarma-citation="entities:11686:1" rel="noopener">Fujitec Co Ltd (6406 JP)</a> announced a <a href="https://www.fujitec.com/common/fjhp/doc/top_global/document/irnews/2139/20201204_Fujitec%20Co.,%20Ltd.%20Announces%20Future%20Strategic%20Direction%20Plan.pdf" target="_blank" rel="noopener">Future Strategy Direction Plan</a> which focused on "priority business areas in the medium-and-long-term, the Company's medium- and long-term strategic targets, and measures aimed at strengthening its governance structure. This sounds kind of jargon-y. Some of it certainly is. But there is actually more than that under the cover, and it is designed to mollify activists who have pursued the company for years. The stock has hardly reacted. Some details clearly kick the can but there is a timer set for summer 2022. More below the fold.

Last Friday, mid-cap specialist elevator maker (in the top ten globally) Fujitec Co Ltd (6406 JP) announced a Future Strategy Direction Plan which focused on "priority business areas in the medium-and-long-term, the Company's medium- and long-term strategic targets, and measures aimed at strengthening its governance structure. This sounds kind of jargon-y. Some of it certainly is. But there is actually more than that under the cover, and it is designed to mollify activists who have pursued the company for years. The stock has hardly reacted. Some details clearly kick the can but there is a timer set for summer 2022. More below the fold. 

Activist Pressure FINALLY Works on Fujitec (6406)- Going Up? (Albeit Slowly)

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

<div>• BEST &amp; WORST •</div>Our best and worst pair from yesterday's announcements is <a href="https://www.smartkarma.com/entities/fanuc-corp" target="_blank" data-smartkarma-citation="entities:752:1" rel="noopener">Fanuc (6954 JP)</a> and <a href="https://www.smartkarma.com/entities/omron-corp" target="_blank" data-smartkarma-citation="entities:15904:1" rel="noopener">Omron (6645 JP)</a>. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/168/334/original/2020-10-30_06-23-20.png?1604006632" class="editor-image img-responsive" data-smartkarma-image-id="168334"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/168/335/original/2020-10-30_06-29-10.png?1604006963" class="editor-image img-responsive" data-smartkarma-image-id="168335"></figure></section><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div><hr><div>DAILY STATS</div><hr><div>156 Quarterly Results</div><div><ul style="list-style-type: disc;">
<li>Results Score: 51% Positive / 4% Neutral / 45% Negative</li>
<li>Average Results Score Change: +0.2 points</li>
<li>Average % Change in Revenue: -5.7% Quarter YoY / -5.3% Rolling TTM YoY </li>
<li>Average Operating Profit Margin Change: -1.1ppt</li>
<li>Percentage Making Quarterly Losses: 15%</li>
</ul></div><hr><div>84 Annual • 35 Interim Forecasts/Revisions</div><div><ul style="list-style-type: disc;">
<li>Annual Forecast/Revision Score: 45% Positive / 6% Neutral / 51% Negative</li>
<li>Interim Forecast/Revision Score Change: 51% Positive / 3% Neutral / 46% Negative</li>
<li>Average Forecast/Revision Score Change: -0.0 points</li>
</ul></div>

• BEST &amp; WORST •Our best and worst pair from yesterday's announcements is Fanuc (6954 JP) and Omron (6645 JP). Source for all charts &amp; tables: Japan AnalyticsDAILY STATS156 Quarterly Results
Results Score: 51% Positive / 4% Neutral / 45% Negative
Average Results Score Change: +0.2 points
Average % Change in Revenue: -5.7% Quarter YoY / -5.3% Rolling TTM YoY 
Average Operating Profit Margin Change: -1.1ppt
Percentage Making Quarterly Losses: 15%
84 Annual • 35 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 45% Positive / 6% Neutral / 51% Negative
Interim Forecast/Revision Score Change: 51% Positive / 3% Neutral / 46% Negative
Average Forecast/Revision Score Change: -0.0 points


🇯🇵 JAPAN • Results & Revisions 10/​​​​​​​​​​​​​​​​​​​​29 - Fanuc, Takeda, Panasonic, Kyocera

Founder & CEO Bond Angle, LLC, Bond Angle, LLC

Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

Insightful commentary and analysis on bond markets and market movers, including financial, economic, and industry catalysts and management shenanigans. 

High yield market investment research

Credit

<a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> has<a href="https://www.smartkarma.com/compose/insight/44419/Germany,%20France,%20Italy,%20the%20Netherlands,%20Portugal,%20Switzerland%20and%20Sweden" target="_blank" rel="noopener"> shipped 7,000</a> Made-In-China Model 3s to Europe, with expected distribution upon arrival next month to Germany, France, Italy, the Netherlands, Portugal, Switzerland, and Sweden.Interestingly, this news comes after Tesla managed to top reduced market consensus estimates for revenue and profits reported for its third quarter, released after the market closed Wednesday and projected full year deliveries up 30-40%.However, as I projected, Tesla again needed a sizable boost from energy credits and accounting maneuvers to increase operating revenue and profits sufficiently to mask yet another loss because its car business, its energy generation &amp; storage business, and its parts &amp; service business are still losing money after 17 years (see <a href="https://www.smartkarma.com/insights/what-to-expect-in-tesla-s-critical-q3" target="_blank" data-smartkarma-citation="insights:43768" rel="noopener">What To Expect in Tesla's Critical Q3</a> on 10/19/20).This didn't seem to worry Tesla's fans who initially boosted the stock up by 5% the following Thursday, though it should. Because Tesla has failed to overcome persistent weakness in core demand that I have been tracking for two years persist despite multiple rounds of price cuts and expensive discounting to boost sales. It has happened with every Tesla model in every key market.And now Tesla is trying to find new markets for excess inventory out of its new Shanghai plant versus the existing China market which CEO Elon Musk had projected last year would be so strong for Tesla it would need <a href="https://bloom.bg/3otCEDy" target="_blank" rel="noopener">several China plants to supply it</a>.So what's really going on with Tesla's demand?<div class="content-highlight">Read on for Bond Angleanalysis of Tesla's multi-year demand trends and prospects across markets.</div>

Tesla Motors (TSLA US) has shipped 7,000 Made-In-China Model 3s to Europe, with expected distribution upon arrival next month to Germany, France, Italy, the Netherlands, Portugal, Switzerland, and Sweden.Interestingly, this news comes after Tesla managed to top reduced market consensus estimates for revenue and profits reported for its third quarter, released after the market closed Wednesday and projected full year deliveries up 30-40%.However, as I projected, Tesla again needed a sizable boost from energy credits and accounting maneuvers to increase operating revenue and profits sufficiently to mask yet another loss because its car business, its energy generation &amp; storage business, and its parts &amp; service business are still losing money after 17 years (see What To Expect in Tesla's Critical Q3 on 10/19/20).This didn't seem to worry Tesla's fans who initially boosted the stock up by 5% the following Thursday, though it should. Because Tesla has failed to overcome persistent weakness in core demand that I have been tracking for two years persist despite multiple rounds of price cuts and expensive discounting to boost sales. It has happened with every Tesla model in every key market.And now Tesla is trying to find new markets for excess inventory out of its new Shanghai plant versus the existing China market which CEO Elon Musk had projected last year would be so strong for Tesla it would need several China plants to supply it.So what's really going on with Tesla's demand?Read on for Bond Angleanalysis of Tesla's multi-year demand trends and prospects across markets.

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Equity Bottom-Up

One of our long-running thematic ideas has been that Japanese corporates are starting to get to grips with improving productivity. This isn’t a universal trend but we had flagged the Toyota group as a bellwether for Japan and that both Toyota and its group companies were demonstrating increasingly flexible and fast decision making capability and less rigid cultural norms. The <a href="https://asia.nikkei.com/Business/Business-trends/Toyota-named-top-ESG-brand-in-Japan-survey2" target="_blank" rel="noopener">Nikkei has an article citing Toyota as the top ESG pick</a> by consumers and business people, and its contents are worth thinking about.

One of our long-running thematic ideas has been that Japanese corporates are starting to get to grips with improving productivity. This isn’t a universal trend but we had flagged the Toyota group as a bellwether for Japan and that both Toyota and its group companies were demonstrating increasingly flexible and fast decision making capability and less rigid cultural norms. The Nikkei has an article citing Toyota as the top ESG pick by consumers and business people, and its contents are worth thinking about.

Toyota – Topping the Nikkei’s ESG Survey and an Indicator of Labour Reform?

Japan

Panasonic Corporation manufactures electric and electronic products. The Company produces home appliances, car navigation systems, digital devices, computer peripherals, telecommunications, industrial equipment, and electronic parts. Panasonic has associated companies around the world.

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Panasonic Corp (6752 JP)

Male Grooming in Asia: Blooming Prospects. Skincare to Drive Growth

Steady expansion in the Male grooming sector in China & India is led by a generational shift in grooming habits and not a passing fad. Only a few...

Devi Subhakesan

Activist Pressure FINALLY Works on Fujitec (6406)- Going Up? (Albeit Slowly)

Fujitec activist pressure finally seems to have shown results as the company buckles, and undertakes to pursue some activist demands. A small win....

Travis Lundy

🇯🇵 JAPAN • Results & Revisions 10/29 - Fanuc, Takeda, Panasonic, Kyocera

• BEST & WORST • Our best and worst pair from yesterday's announcements is Fanuc (6954 JP) and Omron (6645 JP). Source for all charts & tables:...

Campbell Gunn

What's Going On With Tesla's Demand?

Tesla still struggles to sustain sales strength in its largest markets, even as it plans extraordinary increases in capacity. What’s really going...

Vicki Bryan

Toyota – Topping the Nikkei’s ESG Survey and an Indicator of Labour Reform?

Toyota's efforts to reform labour policies bear watching as Japan's change of government and response to COVID's impact on workplaces offer a...

Mio Kato

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Male Grooming in Asia: Blooming Prospects. Skincare to Drive Growth

Steady expansion in the Male grooming sector in China & India is led by a generational shift in grooming habits and not a passing fad. Only a few...

Devi Subhakesan

Activist Pressure FINALLY Works on Fujitec (6406)- Going Up? (Albeit Slowly)

Fujitec activist pressure finally seems to have shown results as the company buckles, and undertakes to pursue some activist demands. A small win....

Travis Lundy

🇯🇵 JAPAN • Results & Revisions 10/​​​​​​​​​​​​​​​​​​​​29 - Fanuc, Takeda, Panasonic, Kyocera

• BEST & WORST • Our best and worst pair from yesterday's announcements is Fanuc (6954 JP) and Omron (6645 JP). Source for all charts & tables:...

Campbell Gunn

What's Going On With Tesla's Demand?

Tesla still struggles to sustain sales strength in its largest markets, even as it plans extraordinary increases in capacity. What’s really going...

Vicki Bryan

Toyota – Topping the Nikkei’s ESG Survey and an Indicator of Labour Reform?

Toyota's efforts to reform labour policies bear watching as Japan's change of government and response to COVID's impact on workplaces offer a...

Mio Kato

🇯🇵 JAPAN • Results & Revisions 10/29 - Fanuc, Takeda, Panasonic, Kyocera