Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

<ul>
<li>@Cosme continues to carve out a significant share of the cosmetics market, with record sales last year. </li>
<li>@Cosme appeals to a wide cross section of the population but this is about to get even wider once it starts selling via Amazon, its biggest shareholder.</li>
<li>While there is debate about whether Amazon will increase its stake, what is certain is that Amazon will help drive iStyle's sales growth.</li>
</ul>


@Cosme continues to carve out a significant share of the cosmetics market, with record sales last year. 
@Cosme appeals to a wide cross section of the population but this is about to get even wider once it starts selling via Amazon, its biggest shareholder.
While there is debate about whether Amazon will increase its stake, what is certain is that Amazon will help drive iStyle's sales growth.


IStyle Growth Following Amazon Shareholding

Event-Driven

<ul>
<li>Japan’s cosmetics market is the focus of attention from many large international businesses thanks to strong sales and new growth businesses. </li>
<li>The latest is Amazon, which is to become the biggest shareholder in <a href="https://www.smartkarma.com/entities/istyle-inc" target="_blank" data-smartkarma-citation="entities:9010:1" rel="noopener">Istyle Inc (3660 JP)</a>, providing a major boost to the @Cosme operator.</li>
<li>IStyle, meanwhile, plans to offer cosmetics brands the chance to open popup stores within its retail chain for fixed monthly fees.</li>
</ul>


Japan’s cosmetics market is the focus of attention from many large international businesses thanks to strong sales and new growth businesses. 
The latest is Amazon, which is to become the biggest shareholder in Istyle Inc (3660 JP), providing a major boost to the @Cosme operator.
IStyle, meanwhile, plans to offer cosmetics brands the chance to open popup stores within its retail chain for fixed monthly fees.


IStyle's @Cosme Gets a Boost from Amazon Investment

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/istyle-inc" target="_blank" data-smartkarma-citation="entities:9010:1" rel="noopener">Istyle Inc (3660 JP)</a>’s share price rose more than 90% over the last few days on the news that Amazon is becoming a strategic partner of the business.</li>
<li>With Beauty Services’ margin expansion more than compensating for On Platform’s weaknesses, we are expecting this turnaround in price performance to last longer than a news cycle.</li>
<li>We think istyle’s share price could break out to a new high as the company’s medium-term OP estimates are revised upwards.</li>
</ul>



Istyle Inc (3660 JP)’s share price rose more than 90% over the last few days on the news that Amazon is becoming a strategic partner of the business.
With Beauty Services’ margin expansion more than compensating for On Platform’s weaknesses, we are expecting this turnaround in price performance to last longer than a news cycle.
We think istyle’s share price could break out to a new high as the company’s medium-term OP estimates are revised upwards.


Istyle High Conviction Update: Up 90% on Partnership With Amazon

Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

Quiddity Advisors

Pan-Asia Catalysts/Events

<p>On 14th May 2021, Shopping information website operator <a href="https://www.smartkarma.com/entities/locoguide-inc" target="_blank" data-smartkarma-citation="entities:33345:1" rel="noopener">Locoguide (4497 JP)</a> and real-estate web portal operator <a href="https://www.smartkarma.com/entities/kufu-co" target="_blank" data-smartkarma-citation="entities:33344:1" rel="noopener">Kufu (4399 JP)</a> announced (<a href="https://kufu.co.jp/files/2021051407060107214.pdf" target="_blank" rel="noopener">J-only</a>) plans to merge in a Deal that would see both companies get delisted from the Tokyo Stock Exchange and get re-listed as a new combined entity. </p><p>The Exchange Ratio for the Deal is set at <em>4.10 Kufu shares per Locoguide share</em>. </p><p>The Locoguide Shareholder Meeting and Kufu Shareholder Meeting for approving the Deal are expected to take place on 24th June 2021 and 7th July 2021, respectively. The transaction is expected to be completed 1 October 2021. </p><p><em>More below the fold.  </em></p>

On 14th May 2021, Shopping information website operator Locoguide (4497 JP) and real-estate web portal operator Kufu (4399 JP) announced (J-only) plans to merge in a Deal that would see both companies get delisted from the Tokyo Stock Exchange and get re-listed as a new combined entity. The Exchange Ratio for the Deal is set at 4.10 Kufu shares per Locoguide share. The Locoguide Shareholder Meeting and Kufu Shareholder Meeting for approving the Deal are expected to take place on 24th June 2021 and 7th July 2021, respectively. The transaction is expected to be completed 1 October 2021. More below the fold.  

Locoguide (4497 JP) - Kufu (4399 JP): Merger Is a Done Deal

<p><a href="https://www.smartkarma.com/entities/istyle-inc" target="_blank" data-smartkarma-citation="entities:9010:1" rel="noopener">Istyle Inc (3660 JP)</a> operates the @cosme platform, which is dedicated to reviews of cosmetic products. After declining about 70% of the market cap during the COVID-19 sell-off, iStyle’s share price has rallied 135% and trades at ¥484 per share, compared to the 52-week high/low of ¥804/176 per share. Even though iStyle significantly underperformed the Japanese cosmetics sector in the period leading up to and during the COVID-19 sell-off, during the post-sell-off recovery period, iStyle outperformed Kose and Shiseido by about 15% and 20% respectively.</p>
<p>However, iStyle’s share price has failed to react to positive vaccine news, even though domestic cosmetic manufacturers have risen about 5-10% following the vaccine news.</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/176/702/original/Picture1.png?1607270762" class="editor-image img-responsive" data-smartkarma-image-id="176702"></figure>
<div class="content-caption">Source: Cap IQ</div>
</section>
<p>Moreover, iStyle’s current share price is 75% lower than the past five-year peak (in March 2018) and fails to value the importance and the immense potential of the “Brand Official” business.</p>

Istyle Inc (3660 JP) operates the @cosme platform, which is dedicated to reviews of cosmetic products. After declining about 70% of the market cap during the COVID-19 sell-off, iStyle’s share price has rallied 135% and trades at ¥484 per share, compared to the 52-week high/low of ¥804/176 per share. Even though iStyle significantly underperformed the Japanese cosmetics sector in the period leading up to and during the COVID-19 sell-off, during the post-sell-off recovery period, iStyle outperformed Kose and Shiseido by about 15% and 20% respectively.
However, iStyle’s share price has failed to react to positive vaccine news, even though domestic cosmetic manufacturers have risen about 5-10% following the vaccine news.


Source: Cap IQ

Moreover, iStyle’s current share price is 75% lower than the past five-year peak (in March 2018) and fails to value the importance and the immense potential of the “Brand Official” business.

2021 High Conviction - IStyle: For How Long Can The Market Snub “Brand Official”?

Japan

Istyle Inc. is an E-Commerce company specialised in cosmetic products. The company's business line includes Internet advertising, EC business, and managing retail stores.

Istyle Inc (3660 JP)

IStyle Growth Following Amazon Shareholding

@Cosme's record sales last year are set to expand even further as it plans to sell through Amazon, its largest shareholder, attracting a wider...

Michael Causton

IStyle's @Cosme Gets a Boost from Amazon Investment

iStyle is a leading cosmetics social platform and retailer and was already well-positioned to take advantage of Japan's cosmetics boom but will now...

Michael Causton

Istyle High Conviction Update: Up 90% on Partnership With Amazon

With Beauty Services' growth more than compensating for On Platform’s weaknesses, we are expecting this turnaround in price performance to last...

Oshadhi Kumarasiri

Locoguide (4497 JP) - Kufu (4399 JP): Merger Is a Done Deal

Two acquisitive companies - Kufu and Locoguide - are set to merge, with Akita Yoshiteru being the lead shareholder in both companies. This is a...

Janaghan Jeyakumar, CFA

2021 High Conviction - IStyle: For How Long Can The Market Snub “Brand Official”?

Istyle operates the @cosme platform, which is dedicated to reviews of cosmetic products. After declining about 70% of the market cap during the...

Oshadhi Kumarasiri

IStyle Growth Following Amazon Shareholding

​@Cosme's record sales last year are set to expand even further as it plans to sell through Amazon, its largest shareholder, attracting a wider...

Michael Causton

IStyle's @Cosme Gets a Boost from Amazon Investment

iStyle is a leading cosmetics social platform and retailer and was already well-positioned to take advantage of Japan's cosmetics boom but will now...

Michael Causton

Istyle High Conviction Update: Up 90% on Partnership With Amazon

With Beauty Services' growth more than compensating for On Platform’s weaknesses, we are expecting this turnaround in price performance to last...

Oshadhi Kumarasiri

Locoguide (4497 JP) - Kufu (4399 JP): Merger Is a Done Deal

Two acquisitive companies - Kufu and Locoguide - are set to merge, with Akita Yoshiteru being the lead shareholder in both companies. This is a...

Janaghan Jeyakumar, CFA

2021 High Conviction - IStyle: For How Long Can The Market Snub “Brand Official”?

Istyle operates the @cosme platform, which is dedicated to reviews of cosmetic products. After declining about 70% of the market cap during the...

Oshadhi Kumarasiri

@Cosme's record sales last year are set to expand even further as it plans to sell through Amazon, its largest shareholder, attracting a wider...