Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Kobayashi Pharmaceutical Co / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kobayashi-pharmaceutical-co" target="_blank" data-smartkarma-citation="entities:14930:1" rel="noopener">Kobayashi Pharmaceutical Co (4967 JP)</a> witnessed business revival in Q3, especially in the domestic household and the U.S. business. In Q3, revenue increased 6% YoY and 13% QoQ to ¥45.4B.</li>
<li>Kobayashi has reiterated FY24 guidance. The company has guided for FY24 revenue of ¥172.0B (+4% YoY), operating income of ¥25.5B (-4% YoY), and net profit of ¥20.2B (-1% YoY).</li>
<li>By establishing the supplement business in North America and further expanding OTC medicines, the company aims to achieve sales of ¥34B in the U.S. in 2030, including ¥16B from healthcare.</li>
</ul>



Kobayashi Pharmaceutical Co (4967 JP) witnessed business revival in Q3, especially in the domestic household and the U.S. business. In Q3, revenue increased 6% YoY and 13% QoQ to ¥45.4B.
Kobayashi has reiterated FY24 guidance. The company has guided for FY24 revenue of ¥172.0B (+4% YoY), operating income of ¥25.5B (-4% YoY), and net profit of ¥20.2B (-1% YoY).
By establishing the supplement business in North America and further expanding OTC medicines, the company aims to achieve sales of ¥34B in the U.S. in 2030, including ¥16B from healthcare.


Kobayashi Pharmaceutical Co (4967 JP): Q3 Shows Early Signs of Business Revival; Aims Big for US

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>Despite expected increased demand from returning Asian tourists, Japanese cosmetics companies have been hesitant to revise their 2H 2023 inbound demand projections.</li>
<li>We are long <a href="https://www.smartkarma.com/entities/kose-corp" target="_blank" data-smartkarma-citation="entities:18009:1" rel="noopener">Kose Corp (4922 JP)</a>, <a href="https://www.smartkarma.com/entities/shiseido-co-ltd" target="_blank" data-smartkarma-citation="entities:5718:1" rel="noopener">Shiseido Company (4911 JP)</a>, and <a href="https://www.smartkarma.com/entities/pola-orbis-holdings-inc" target="_blank" data-smartkarma-citation="entities:2287:1" rel="noopener">Pola Orbis Holdings (4927 JP)</a>, as consensus estimates look extra cautious and reasonable and appealing FY+2 valuation multiples.</li>
<li>We view the risk of Chinese consumers boycotting Japanese cosmetics due to Fukushima wastewater release as relatively low.</li>
</ul>


Despite expected increased demand from returning Asian tourists, Japanese cosmetics companies have been hesitant to revise their 2H 2023 inbound demand projections.
We are long Kose Corp (4922 JP), Shiseido Company (4911 JP), and Pola Orbis Holdings (4927 JP), as consensus estimates look extra cautious and reasonable and appealing FY+2 valuation multiples.
We view the risk of Chinese consumers boycotting Japanese cosmetics due to Fukushima wastewater release as relatively low.


Japanese Cosmetics Ready to Blossom with Asian Visitors

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>In response to media speculation, <a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a> has clarified that Reinold Geiger, the Chairman and the largest shareholder, is contemplating a possible transaction through a voluntary general offer.</li>
<li>However, the rumoured offer of HK$35 per share is false. Mr Geiger has confirmed that the potential offer price would be no less than HK$26.00 per share.</li>
<li>The floor price of HK$26 is light and needs a bump (towards HK$30), particularly if Mr Geiger wants 95% of voting rights to exercise the right of compulsory acquisition (squeeze-out).</li>
</ul>


In response to media speculation, L'Occitane (973 HK) has clarified that Reinold Geiger, the Chairman and the largest shareholder, is contemplating a possible transaction through a voluntary general offer.
However, the rumoured offer of HK$35 per share is false. Mr Geiger has confirmed that the potential offer price would be no less than HK$26.00 per share.
The floor price of HK$26 is light and needs a bump (towards HK$30), particularly if Mr Geiger wants 95% of voting rights to exercise the right of compulsory acquisition (squeeze-out).


L’Occitane (973 HK): Board Updates on the Potential Offer Structure and Price

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS. Beta Roars back as SPX regains 4100 support; All SPX sector positive(ex-Energy); CPI in focus as US 2Yr Yields still at 4.5%; Fed Pause or Acceleration-is the question</li>
<li>JAPAN. NKY Futs +1.0% vs Cash; Yen Weakens to 132.45 vs US;  JGB at 2% next year ? So says Koll; Citizen Watch shakes things up with Massive Buyback</li>
<li>DAILY NUGGET.  Buybacks been been certainly improving in Japan. But this action from Citizen Watch takes it to another level.</li>
</ul>


OVERSEAS. Beta Roars back as SPX regains 4100 support; All SPX sector positive(ex-Energy); CPI in focus as US 2Yr Yields still at 4.5%; Fed Pause or Acceleration-is the question
JAPAN. NKY Futs +1.0% vs Cash; Yen Weakens to 132.45 vs US;  JGB at 2% next year ? So says Koll; Citizen Watch shakes things up with Massive Buyback
DAILY NUGGET.  Buybacks been been certainly improving in Japan. But this action from Citizen Watch takes it to another level.


Good Morning Japan |Beta BACK-Ahead of CPI; Citizen Watch LEADS=>Massive Buyback; Toyota EV Shift?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl Corp (4921 JP)</a> delivered 3QFY23 results yesterday, which saw revenue and operating profit decrease by 2.5% and 5.0% YoY respectively to ¥28.3bn (consensus ¥29.8bn) and ¥3.1bn (consensus ¥3.4bn).</li>
<li>Cosmetics growth being the main reason for Fancl’s FY+2 EV/OP of 22.4x, recent trends look scary with cosmetics revenue and OP down 24% and 27% respectively from the pre-COVID level.</li>
<li>Therefore, we would look to short Fancl expecting shares to fall around 25-30% in the short term.</li>
</ul>



Fancl Corp (4921 JP) delivered 3QFY23 results yesterday, which saw revenue and operating profit decrease by 2.5% and 5.0% YoY respectively to ¥28.3bn (consensus ¥29.8bn) and ¥3.1bn (consensus ¥3.4bn).
Cosmetics growth being the main reason for Fancl’s FY+2 EV/OP of 22.4x, recent trends look scary with cosmetics revenue and OP down 24% and 27% respectively from the pre-COVID level.
Therefore, we would look to short Fancl expecting shares to fall around 25-30% in the short term.


FANCL: The Flagship FANCL Brand in Trouble

Japan

KOSE Corporation manufactures, retails, and exports cosmetics including make up, skin care, and hair care products.  The Company sells its products in Hong Kong, China, Singapore, and Malaysia.

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Kose Corp (4922 JP)

Kobayashi Pharmaceutical Co (4967 JP): Q3 Shows Early Signs of Business Revival; Aims Big for US

Kobayashi experienced business revival in Q3, with revenue increasing 6% YoY and 13% QoQ to ¥45.4B. The company aims to establish supplement...

Tina Banerjee

Japanese Cosmetics Ready to Blossom with Asian Visitors

Japanese cosmetics companies were hesitant to revise their inbound demand projections despite expected increased demand from returning Asian...

Oshadhi Kumarasiri

L’Occitane (973 HK): Board Updates on the Potential Offer Structure and Price

Reinold Geiger is contemplating a possible transaction through a VGO at a floor offer price of HK$26. The floor price is light if Mr Geiger wants...

Arun George

Good Morning Japan |Beta BACK-Ahead of CPI; Citizen Watch LEADS=>Massive Buyback; Toyota EV Shift?

JGB at 2% next year ? So says Koll; Citizen Watch shakes things up with Massive Buyback. JGB at 2% next year ? So says Koll; Citizen Watch shakes...

Mark Chadwick

FANCL: The Flagship FANCL Brand in Trouble

Cosmetics growth being the main reason for Fancl’s lofty FY24 EV/OP of 22.4x, recent trends look quite scary with cosmetics revenue and OP down by...

Oshadhi Kumarasiri

Price Gauge

52-week Range

Market Cap (USDm)

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Kobayashi Pharmaceutical Co (4967 JP): Q3 Shows Early Signs of Business Revival; Aims Big for US

​Kobayashi experienced business revival in Q3, with revenue increasing 6% YoY and 13% QoQ to ¥45.4B. The company aims to establish supplement...

Tina Banerjee

Japanese Cosmetics Ready to Blossom with Asian Visitors

​Japanese cosmetics companies were hesitant to revise their inbound demand projections despite expected increased demand from returning Asian...

Oshadhi Kumarasiri

L’Occitane (973 HK): Board Updates on the Potential Offer Structure and Price

Reinold Geiger is contemplating a possible transaction through a VGO at a floor offer price of HK$26. The floor price is light if Mr Geiger wants...

Arun George

Good Morning Japan |Beta BACK-Ahead of CPI; Citizen Watch LEADS=>Massive Buyback; Toyota EV Shift?

JGB at 2% next year ? So says Koll; Citizen Watch shakes things up with Massive Buyback. JGB at 2% next year ? So says Koll; Citizen Watch shakes...

Mark Chadwick

FANCL: The Flagship FANCL Brand in Trouble

Cosmetics growth being the main reason for Fancl’s lofty FY24 EV/OP of 22.4x, recent trends look quite scary with cosmetics revenue and OP down by...

Oshadhi Kumarasiri

Kobayashi experienced business revival in Q3, with revenue increasing 6% YoY and 13% QoQ to ¥45.4B. The company aims to establish supplement...

Japanese cosmetics companies were hesitant to revise their inbound demand projections despite expected increased demand from returning Asian...