Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

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>Japan’s largest snacks maker, <a href="https://www.smartkarma.com/entities/calbee-inc" target="_blank" data-smartkarma-citation="entities:17054:1" rel="noopener">Calbee Inc (2229 JP)</a> has raised prices by 10-20% for almost 75% of its product range.</li>
<li>Meanwhile, main inputs such as potatoes and palm oil have seen extensive price drops in the past few months.</li>
<li>With margin pressures alleviating from both angles (revenue &amp; cost), we think Calbee’s FY24 OP is bound to exceed ¥30.0bn.</li>
</ul>


Japan’s largest snacks maker, Calbee Inc (2229 JP) has raised prices by 10-20% for almost 75% of its product range.
Meanwhile, main inputs such as potatoes and palm oil have seen extensive price drops in the past few months.
With margin pressures alleviating from both angles (revenue &amp; cost), we think Calbee’s FY24 OP is bound to exceed ¥30.0bn.


Calbee’s FY24 OP Is Bound to Exceed ¥30.0bn

<ul>
<li>
<a href="https://www.smartkarma.com/entities/calbee-inc" target="_blank" data-smartkarma-citation="entities:17054:1" rel="noopener">Calbee Inc (2229 JP)</a>’s share price fell 4% today from the top end of the trend channel as 2QFY23 OP fell short of consensus by ¥658m to ¥4.9bn.</li>
<li>There was also a ¥3.5bn downgrade to full-year OP guidance on higher-than-expected energy and raw material costs. However, this seems too conservative, especially with 10-20% price hikes in September-November.</li>
<li>In addition, share buy-backs are starting to become a regular part of shareholder returns with ¥12.0bn per-year in share buybacks in the previous fiscal year and the current fiscal year.</li>
</ul>



Calbee Inc (2229 JP)’s share price fell 4% today from the top end of the trend channel as 2QFY23 OP fell short of consensus by ¥658m to ¥4.9bn.
There was also a ¥3.5bn downgrade to full-year OP guidance on higher-than-expected energy and raw material costs. However, this seems too conservative, especially with 10-20% price hikes in September-November.
In addition, share buy-backs are starting to become a regular part of shareholder returns with ¥12.0bn per-year in share buybacks in the previous fiscal year and the current fiscal year.


Calbee – Price Hikes to Deliver Upside As Buybacks Provide Downside Protection

<ul>
<li>Japan’s largest snacks maker, <a href="https://www.smartkarma.com/entities/calbee-inc" target="_blank" data-smartkarma-citation="entities:17054:1" rel="noopener">Calbee Inc (2229 JP)</a> is raising prices by 10-20% for almost 75% of its product range.</li>
<li>These price hikes have boded well with institutional investors with a vast most of them deciding to up their stake in the company following the first price hike announcement.</li>
<li>While institutional-investors bet on earnings growth over long-term through regular price revisions, we think there could also be short and medium-term gains as OP growth turns positive after many years.</li>
</ul>


Japan’s largest snacks maker, Calbee Inc (2229 JP) is raising prices by 10-20% for almost 75% of its product range.
These price hikes have boded well with institutional investors with a vast most of them deciding to up their stake in the company following the first price hike announcement.
While institutional-investors bet on earnings growth over long-term through regular price revisions, we think there could also be short and medium-term gains as OP growth turns positive after many years.


Calbee – Price Hikes Are Appealing to Institutional Investors

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zhejiang-leapmotor-technology" target="_blank" data-smartkarma-citation="entities:35968:1" rel="noopener">Leapmotor (9863 HK)</a> raised around US$800m in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.</li>
<li>As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.</li>
<li>In this note, we will talk about the demand for the deal and other trading dynamics.</li>
</ul>



Leapmotor (9863 HK) raised around US$800m in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.
In this note, we will talk about the demand for the deal and other trading dynamics.


Leapmotor IPO - Weak Demand but Concentrated Allocation

Event-Driven

<ul>
<li>LG Energy Solution (LGES) raised US$10.8bn in its South Korea IPO. The stock was listed on 27th Jan 22. Its six-month lockup is set to expire soon.</li>
<li>LGES is the EV battery unit of LG Chem. The company is a major supplier to customers including Tesla and General Motors.</li>
<li>In this note, we will talk about the lock-up dynamics and updates since our last note.</li>
</ul>


LG Energy Solution (LGES) raised US$10.8bn in its South Korea IPO. The stock was listed on 27th Jan 22. Its six-month lockup is set to expire soon.
LGES is the EV battery unit of LG Chem. The company is a major supplier to customers including Tesla and General Motors.
In this note, we will talk about the lock-up dynamics and updates since our last note.


LG Energy IPO Lock-Up - Largest Lockup Release of the Lot at US$3bn

Japan

CALBEE, Inc. manufactures a wide range of snack foods using potato, wheat, and corn as a main ingredient. The company also manufactures bakery products and cereals.

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Calbee Inc (2229 JP)

Calbee’s FY24 OP Is Bound to Exceed ¥30.0bn

With both pricing growth and lower input costs pushing up the company’s earnings, we think Calbee’s FY24 OP could easily surpass ¥30.0bn to beat...

Oshadhi Kumarasiri

Calbee – Price Hikes to Deliver Upside As Buybacks Provide Downside Protection

There was also a ¥3.5bn downgrade to full-year OP guidance on energy and raw material costs growth. However, this downgrade seems too conservative,...

Oshadhi Kumarasiri

Calbee – Price Hikes Are Appealing to Institutional Investors

Japan’s largest snacks maker, Calbee is raising prices by 10-20% for almost 75% of its product range. These price hikes have boded well with...

Oshadhi Kumarasiri

Leapmotor IPO - Weak Demand but Concentrated Allocation

Leapmotor (9863 HK) raised around US$800m in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.

Sumeet Singh

LG Energy IPO Lock-Up - Largest Lockup Release of the Lot at US$3bn

LG Energy Solution (LGES) raised US$10.8bn in its South Korea IPO. The stock was listed on 27th Jan 22. Its six-month lockup is set to expire soon.

Sumeet Singh

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