Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

Lululemon Athletica / Equity Capital Markets

<ul><li>Lululemon delivered a strong financial result in spite of the ongoing microeconomic challenges.</li><li>Lululemon launched its first re-commerce program named 'Lululemon like New' in two of its test markets.</li><li>In this report, we have carried out a fundamental analysis of the historical financial statements of the company.</li></ul>

Lululemon delivered a strong financial result in spite of the ongoing microeconomic challenges.Lululemon launched its first re-commerce program named 'Lululemon like New' in two of its test markets.In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Lululemon Athletica: Overview of Business Strategy

<ul><li>Lululemon Athletica's business remained strong in the previous quarter, reflecting the continued growth potential for the company in both the near term and the long term.</li><li>The company also had 96% of its stores open on average during Q3, with 99% open at the end of the quarter.</li><li>Lululemon’s investments over the last several years have enabled the company's acceleration in the digital business, contributing to growth this year on top of last year's outsized performance.</li></ul>

Lululemon Athletica's business remained strong in the previous quarter, reflecting the continued growth potential for the company in both the near term and the long term.The company also had 96% of its stores open on average during Q3, with 99% open at the end of the quarter.Lululemon’s investments over the last several years have enabled the company's acceleration in the digital business, contributing to growth this year on top of last year's outsized performance.

Lululemon Athletica Inc. - Investment Thesis

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

Fashion retailer, <a href="https://www.smartkarma.com/entities/tokyo-base-co-ltd" target="_blank" data-smartkarma-citation="entities:23991:1" rel="noopener">Tokyo Base (3415 JP)</a>, stumbled well before the pandemic due to teething issues but  managed to hold sales at almost 2019 levels last year despite its premium positioning. It now expects almost 30% growth this year. Encouraged, it will double down on expansion, adding two more chains, including a sports fashion store, while investing faster overseas – where the real long-term potential lies.

Fashion retailer, Tokyo Base (3415 JP), stumbled well before the pandemic due to teething issues but  managed to hold sales at almost 2019 levels last year despite its premium positioning. It now expects almost 30% growth this year. Encouraged, it will double down on expansion, adding two more chains, including a sports fashion store, while investing faster overseas – where the real long-term potential lies.

<ul><li>Lululemon Athletica delivered a robust performance in the second quarter, with revenue growing over 60% compared to the previous year.</li><li>It managed to deliver a positive growth in e-commerce, which is even more impressive given the strong performance one year ago.</li><li>Lululemon saw the revenues increase 43% in their international markets and up 26% in North America, both on a two-year CAGR basis indicating a strong global momentum.</li></ul>

Lululemon Athletica delivered a robust performance in the second quarter, with revenue growing over 60% compared to the previous year.It managed to deliver a positive growth in e-commerce, which is even more impressive given the strong performance one year ago.Lululemon saw the revenues increase 43% in their international markets and up 26% in North America, both on a two-year CAGR basis indicating a strong global momentum.

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

We have chosen to use EV/EBIT to value BrandX Corp mainly because this negates the differences in the capital structure of the different companies. Echo Marketing is currently trading at 14.7x EV/EBIT using 2020 EBIT estimates. We have applied a 20% premium valuation multiple on BrandX Corp (17.6x EV/EBIT 2020E), mainly due to much higher sales growth and returns on equity as compared to Echo Marketing.Applying a 17.6x EV/EBIT multiple to our estimated EBIT of 18.5 billion won in 2020 results in an EV of 327 billion won and an implied market cap of 363 billion won. This results in an implied price of 17,912 won, which is 29% above the mid-point of the IPO range (12,400 won to 15,300 won). Given the solid upside, we have a positive view of this IPO and we would take this deal. As we mentioned in our previous note, <a href="https://www.smartkarma.com/insights/brandx-corporation-ipo-preview" target="_blank" data-smartkarma-citation="insights:41084" rel="noopener">BrandX Corporation IPO Preview</a>,  a key risk that the company faces is whether it can become more than a "one-hit-wonder." The company's most successful brand Xexymix has been the major driver of its sales and profits in the past two years and for now, it is uncertain whether it can continue its success in other products such as cosmetics, men's apparel, and HMR F&amp;B product categories.

We have chosen to use EV/EBIT to value BrandX Corp mainly because this negates the differences in the capital structure of the different companies. Echo Marketing is currently trading at 14.7x EV/EBIT using 2020 EBIT estimates. We have applied a 20% premium valuation multiple on BrandX Corp (17.6x EV/EBIT 2020E), mainly due to much higher sales growth and returns on equity as compared to Echo Marketing.Applying a 17.6x EV/EBIT multiple to our estimated EBIT of 18.5 billion won in 2020 results in an EV of 327 billion won and an implied market cap of 363 billion won. This results in an implied price of 17,912 won, which is 29% above the mid-point of the IPO range (12,400 won to 15,300 won). Given the solid upside, we have a positive view of this IPO and we would take this deal. As we mentioned in our previous note, BrandX Corporation IPO Preview,  a key risk that the company faces is whether it can become more than a "one-hit-wonder." The company's most successful brand Xexymix has been the major driver of its sales and profits in the past two years and for now, it is uncertain whether it can continue its success in other products such as cosmetics, men's apparel, and HMR F&amp;B product categories. 

BrandX Corporation IPO Valuation Analysis

United States

lululemon athletica Inc. designs and retails athletic clothing.  The Company produces fitness pants, shorts, tops and jackets for yoga, dance, running, and general fitness. lululemon serves customers throughout the world.

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Lululemon Athletica (LULU US)

Lululemon Athletica: Overview of Business Strategy

Lululemon delivered a strong financial result in spite of the ongoing microeconomic challenges. Lululemon launched its first re-commerce program...

Baptista Research

Lululemon Athletica Inc. - Investment Thesis

Lululemon Athletica's business remained strong in the previous quarter, reflecting the continued growth potential for the company in both the near...

Baptista Research

Tokyo Base Defies Fashion Slowdown

Tokyo Base is a rare jewel: a Japanese retailer designed from the ground up for export markets. It is now solidifying its position at home and has...

Michael Causton

Lululemon Athletica Inc. - Investment Thesis

Lululemon Athletica delivered a robust performance in the second quarter, with revenue growing over 60% compared to the previous year. It managed...

Baptista Research

BrandX Corporation IPO Valuation Analysis

We have chosen to use EV/EBIT to value BrandX Corp mainly because this negates the differences in the capital structure of the different companies....

Douglas Kim

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