Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Demand for ASICS running shoes remains strong. That should become clear as factories reach full capacity and shipping problems recede.</li>
<li>Profit margins will expand due to less discounting and an improved channel mix. </li>
<li>We turn bullish following a 30% decline from 52-week high. The stock is now trading at undemanding multiples versus peers.  </li>
</ul>


Demand for ASICS running shoes remains strong. That should become clear as factories reach full capacity and shipping problems recede.
Profit margins will expand due to less discounting and an improved channel mix. 
We turn bullish following a 30% decline from 52-week high. The stock is now trading at undemanding multiples versus peers.  


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

<ul><li>Nike's strong second-quarter financial results were in line with the management's expectations and were fueled by continued brand momentum.</li><li>The company released the Air Sesh for Nike members in the last quarter, with a wider release coming soon.</li><li>Overall, we are optimistic about Nike's growth strategy and give it an 'Outperform' rating with a revised target price.</li></ul>

Nike's strong second-quarter financial results were in line with the management's expectations and were fueled by continued brand momentum.The company released the Air Sesh for Nike members in the last quarter, with a wider release coming soon.Overall, we are optimistic about Nike's growth strategy and give it an 'Outperform' rating with a revised target price.

Nike Inc Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 2/22

Investment Advisors, JL Warren Capital

Junheng Li

Investment Advisors

JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Topsports International Holdings / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nike-inc-cl-b" target="_blank" data-smartkarma-citation="entities:6658:1" rel="noopener">Nike Inc Cl B (NKE US)</a>  retail partners in China have been slashing orders. </li>
<li>We estimate that in FQ2 2022, NKE was down 10-15% YoY in mainland China (90-95% Greater China sales), second down quarter in last 5 years.  </li>
<li>China retail in December appears to be further weakening from previous months.  </li>
</ul>



Nike Inc Cl B (NKE US)  retail partners in China have been slashing orders. 
We estimate that in FQ2 2022, NKE was down 10-15% YoY in mainland China (90-95% Greater China sales), second down quarter in last 5 years.  
China retail in December appears to be further weakening from previous months.  


NKE China FQ2 2022 Review: Double-Digit Decline in Retail & Wholesale: Excess Inventory, Weak Demand

<ul>
<li>We see near term headwinds to the outlook from supply chain disruptions. Q4 earnings and guidance for 2022 may disappoint a market that had started to price in margin expansion. </li>
<li>Asics may have gained share in some markets during Covid but we do not see this as permanent shift in brand awareness or power.  </li>
<li>The mid-term plan, digital strategy and 2030 vision are unspectacular and undifferentiated. Fed tightening could be an achilleas heel for Asics valuation.  </li>
</ul>


We see near term headwinds to the outlook from supply chain disruptions. Q4 earnings and guidance for 2022 may disappoint a market that had started to price in margin expansion. 
Asics may have gained share in some markets during Covid but we do not see this as permanent shift in brand awareness or power.  
The mid-term plan, digital strategy and 2030 vision are unspectacular and undifferentiated. Fed tightening could be an achilleas heel for Asics valuation.  


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 host of Japanese apparel brands are starting to reject cotton produced in the Xinjiang region.</li>
<li>Even though Fast Retailing is unlikely to stake a strong stand against the Xinjiang cotton controversy, actions by other Japanese brands could still affect Uniqlo in the Chinese market.</li>
<li>The Uniqlo brand resonates with Japan and a boycott of Japanese brands in China could have severe consequences to Uniqlo’s Chinese business.</li>
</ul>


A host of Japanese apparel brands are starting to reject cotton produced in the Xinjiang region.
Even though Fast Retailing is unlikely to stake a strong stand against the Xinjiang cotton controversy, actions by other Japanese brands could still affect Uniqlo in the Chinese market.
The Uniqlo brand resonates with Japan and a boycott of Japanese brands in China could have severe consequences to Uniqlo’s Chinese business.


China’s Boycott of Western Brands Could Extend to Japanese Brands Amidst Xinjiang Cotton Controversy

United States

NIKE, Inc. designs, develops, and markets athletic footwear, apparel, equipment, and accessory products for men, women, and children. The Company sells its products worldwide to retail stores, through its own stores, subsidiaries, and distributors.

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Nike (NKE US)

ASICS (7936): Time for a Bounce

We had been bearish since mid-Dec on potential supply disruptions. With the share price down 30% from its 52-week high and production/shipping...

Mark Chadwick

Nike Inc Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 2/22

Nike's strong second-quarter financial results were in line with the management's expectations and were fueled by continued brand momentum. The...

Baptista Research

NKE China FQ2 2022 Review: Double-Digit Decline in Retail & Wholesale: Excess Inventory, Weak Demand

NKE is likely to report Double-Digit YoY Decline in China Retail & Wholesale due to Excess Inventory, Weak Demand as a result of COVID, Slow...

JL Warren Capital

Asics (7936) | Running Out of Steam

We see near term headwinds to the outlook from supply chain disruptions. Q4 earnings and guidance for 2022 may disappoint a market that had started...

Mark Chadwick

China’s Boycott of Western Brands Could Extend to Japanese Brands Amidst Xinjiang Cotton Controversy

A host of new Japanese apparel makers including Sanyo Shokai and TSI have recently become a part of a growing list of international companies to...

Oshadhi Kumarasiri

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