Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>From 2018 onward, French beauty retailer <strong><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></strong> has apparently drawn interest from the likes of Advent International and its controlling shareholder Chairman Reinold Geiger - amongst others. </li>
<li>There <em>is</em> substance to these "Offers" - Geiger confirmed in August 2023 he was contemplating a conditional voluntary general Offer. He holds <a href="https://di.hkex.com.hk/di/NSForm3A.aspx?fn=DA20240205E00172&amp;sa2=as&amp;sid=45406&amp;corpn=L%27Occitane+International+S.A.&amp;sd=07%2f02%2f2023&amp;ed=07%2f02%2f2024&amp;cid=0&amp;sa1=cl&amp;scsd=07%2f02%2f2023&amp;sced=07%2f02%2f2024&amp;sc=973&amp;src=MAIN&amp;lang=EN&amp;g_lang=en&amp;" target="_blank" rel="noopener">72.65%</a> of shares out according to the HKEx. </li>
<li>The latest news, with no definitive source, is that Blackstone is mulling the possibility of teaming up with Geiger on a buyout.</li>
</ul>


From 2018 onward, French beauty retailer L'Occitane (973 HK) has apparently drawn interest from the likes of Advent International and its controlling shareholder Chairman Reinold Geiger - amongst others. 
There is substance to these "Offers" - Geiger confirmed in August 2023 he was contemplating a conditional voluntary general Offer. He holds 72.65% of shares out according to the HKEx. 
The latest news, with no definitive source, is that Blackstone is mulling the possibility of teaming up with Geiger on a buyout.


Analyst

Steve

Equity Bottom-Up

<ul>
<li>
<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> relies heavily on Japan and China, each making up over one quarter of sales. </li>
<li>The long thesis is simple - I expect improvement in both regions in the near future, and the valuation is very attractive.</li>
<li>Blackstone just announced a potential bid for <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>, which I have written extensively about.  We could potentially see a pickup in interest in the sector.</li>
</ul>



Shiseido Company (4911 JP) relies heavily on Japan and China, each making up over one quarter of sales. 
The long thesis is simple - I expect improvement in both regions in the near future, and the valuation is very attractive.
Blackstone just announced a potential bid for L'Occitane (973 HK), which I have written extensively about.  We could potentially see a pickup in interest in the sector.


Shiseido (4911 JP):  This Fallen Angel Is Fixable

L'Occitane International / Equity Bottom-Up

<ul>
<li>
<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> reported FY1H24 (fiscal year ending March 31) results yesterday after market, with net profit down 45% yoy. </li>
<li>The sharp drop in earnings is mainly due to a 48% yoy increase in marketing costs, as well as increased finance costs.</li>
<li>The company maintained the FY24 outlook of 17% topline growth and an operating profit margin of 12% (FY1H24:  7.2%). </li>
</ul>



L'Occitane (973 HK) reported FY1H24 (fiscal year ending March 31) results yesterday after market, with net profit down 45% yoy. 
The sharp drop in earnings is mainly due to a 48% yoy increase in marketing costs, as well as increased finance costs.
The company maintained the FY24 outlook of 17% topline growth and an operating profit margin of 12% (FY1H24:  7.2%). 


L'Occitane (973 HK):  FY1H24 Earnings Hurt By Massive Increase In Marketing, As Expected

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Index Rebalance

<ul>
<li>In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in September 2023.</li>
<li>The index changes for the December 2023 rebalance will be announced in mid-November (17 Nov) and implemented in early-December (with effect from 4 Dec).</li>
<li>Although the Hang Seng index has a highly subjective constituent selection process and index changes are somewhat unpredictable, we will continue sharing our thoughts for each quarterly review.</li>
</ul>


In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in September 2023.
The index changes for the December 2023 rebalance will be announced in mid-November (17 Nov) and implemented in early-December (with effect from 4 Dec).
Although the Hang Seng index has a highly subjective constituent selection process and index changes are somewhat unpredictable, we will continue sharing our thoughts for each quarterly review.


Quiddity Leaderboard for Hang Seng Index Dec 23: High Conviction Names Have Decent Momentum Vs HSI

<ul>
<li>
<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> reported 2QFY24 operational update last night.  Sales grew 17% yoy on reported currency, and up 25% yoy on constant currency. </li>
<li>The bright spot of the release is the growth of Sol de Janeiro, the Brazilian-inspired premium body care brand, which grew 202% yoy in constant currency in the quarter.</li>
<li>Sol de Janeiro has the highest EBIT margin among the 3 major brands of the company, at 24.6% in FY23, suggesting highly profitable growth.</li>
</ul>



L'Occitane (973 HK) reported 2QFY24 operational update last night.  Sales grew 17% yoy on reported currency, and up 25% yoy on constant currency. 
The bright spot of the release is the growth of Sol de Janeiro, the Brazilian-inspired premium body care brand, which grew 202% yoy in constant currency in the quarter.
Sol de Janeiro has the highest EBIT margin among the 3 major brands of the company, at 24.6% in FY23, suggesting highly profitable growth.


L'Occitane (973 HK):  Sol De Janeiro Growth Taking Off

Luxembourg

L'Occitane International S.A. designs, manufactures, and retails natural and organic ingredient-based beauty and well-being products, including skincare, haircare, body care, fragrances, and makeup. The company operates a portfolio of premium beauty brands such as L'Occitane en Provence, ELEMIS, and Sol de Janeiro. It is headquartered in Luxembourg City, Luxembourg, and was founded in 2000.

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L'Occitane International (973 HK)

L'Occitane (973 HK): Here We Go Again

On balance, an Offer will unfold. Expect an Offer price of at least HK$26/share. Timing is everything. This latest rumour may, again, come to...

David Blennerhassett

Shiseido (4911 JP): This Fallen Angel Is Fixable

Shiseido heavily relies on Japan and China for sales, and with expected improvements in these regions, the company's attractive valuation makes it...

Steve

L'Occitane (973 HK): FY1H24 Earnings Hurt By Massive Increase In Marketing, As Expected

Share price is up 20% since the "earnings miss" and this insight. Recommend to take advantage of the current weak sentiment on such companies...

Steve

Quiddity Leaderboard for Hang Seng Index Dec 23: High Conviction Names Have Decent Momentum Vs HSI

The Hang Seng Index changes for Dec 23 will be published after the close on Friday 17th November 2023. In this insight, you can see Quiddity's...

Janaghan Jeyakumar, CFA

L'Occitane (973 HK): Sol De Janeiro Growth Taking Off

L'Occitane reported strong sales growth in 2QFY24, with Sol de Janeiro brand leading the way with a 202% YoY increase in constant currency.

Steve

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

L'Occitane (973 HK): Here We Go Again

On balance, an Offer will unfold. Expect an Offer price of at least HK$26/share. Timing is everything. This latest rumour may, again, come to...

David Blennerhassett

Shiseido (4911 JP): This Fallen Angel Is Fixable

​Shiseido heavily relies on Japan and China for sales, and with expected improvements in these regions, the company's attractive valuation makes it...

Steve

L'Occitane (973 HK): FY1H24 Earnings Hurt By Massive Increase In Marketing, As Expected

Share price is up 20% since the "earnings miss" and this insight. Recommend to take advantage of the current weak sentiment on such companies...

Steve

Quiddity Leaderboard for Hang Seng Index Dec 23: High Conviction Names Have Decent Momentum Vs HSI

The Hang Seng Index changes for Dec 23 will be published after the close on Friday 17th November 2023. In this insight, you can see Quiddity's...

Janaghan Jeyakumar, CFA

L'Occitane (973 HK): Sol De Janeiro Growth Taking Off

​L'Occitane reported strong sales growth in 2QFY24, with Sol de Janeiro brand leading the way with a 202% YoY increase in constant currency.

Steve

Shiseido heavily relies on Japan and China for sales, and with expected improvements in these regions, the company's attractive valuation makes it...

L'Occitane reported strong sales growth in 2QFY24, with Sol de Janeiro brand leading the way with a 202% YoY increase in constant currency.