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.

Equity Bottom-Up

<ul>
<li>Inflation, having peaked at 4.3% in January 2023, has been on a downward trend throughout the year, with figures dropping to 2.8% in November and further to 2.6% by December.</li>
<li>In this insight, we analyze the recent quarterly performance of <a href="https://www.smartkarma.com/entities/yakult-honsha-co-ltd" target="_blank" data-smartkarma-citation="entities:17153:1" rel="noopener">Yakult Honsha (2267 JP)</a>, Nissin, and Seven &amp; I, Japanese Consumer Staples companies discussed in our prior Smartkarma Original.</li>
<li>While <a href="https://www.smartkarma.com/entities/nissin-foods-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:12548:1" rel="noopener">Nissin Foods Holdings (2897 JP)</a> showcased excellent performance, Yakult and <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> faced struggles in their recent quarters.</li>
</ul>


Inflation, having peaked at 4.3% in January 2023, has been on a downward trend throughout the year, with figures dropping to 2.8% in November and further to 2.6% by December.
In this insight, we analyze the recent quarterly performance of Yakult Honsha (2267 JP), Nissin, and Seven &amp; I, Japanese Consumer Staples companies discussed in our prior Smartkarma Original.
While Nissin Foods Holdings (2897 JP) showcased excellent performance, Yakult and Seven &amp; I Holdings (3382 JP) faced struggles in their recent quarters.


Japan Consumer Staples Update: Inflation Looks a Blessing in Disguise for Those with Pricing Power

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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/monde-nissin-corp" target="_blank" data-smartkarma-citation="entities:32188:1" rel="noopener">Monde Nissin Corp (MONDE PM)</a> shares are down 18% on the back of FY22 results which revealed a net loss of PHP13 billion mainly due to a large impairment charge.</li>
<li>While softening demand in meat alternatives is a headwind, Monde should benefit from the tailwinds of market share gains (in APAC BFB) and margin improvement (easing cost inflation).</li>
<li>The valuation is undemanding (SOTP valuation of PHP10.21 per share) and will prove attractive to investors with a longer-term investment horizon.</li>
</ul>



Monde Nissin Corp (MONDE PM) shares are down 18% on the back of FY22 results which revealed a net loss of PHP13 billion mainly due to a large impairment charge.
While softening demand in meat alternatives is a headwind, Monde should benefit from the tailwinds of market share gains (in APAC BFB) and margin improvement (easing cost inflation).
The valuation is undemanding (SOTP valuation of PHP10.21 per share) and will prove attractive to investors with a longer-term investment horizon.


<ul>
<li>Japan's inflation hit a 41-year high at 4.3% in January, but gradually slowed down in the following months, reaching 3.3%, 3.2%, and 3.5% in February, March, and April 2023, respectively.</li>
<li>Although Fuel, Electricity, and Water prices declined, other items excluding fresh vegetables, maintained inflation at a similar pace, suggesting that cost-push inflation continues to impact the overall economic environment.</li>
<li>This insight examines the recent quarterly performance of Yakult, Nissin, and Seven &amp; I, our top picks in the Japan Consumer Staples Sector <a href="https://www.smartkarma.com/insights/japan-consumer-staples-sector-inflation-looks-a-blessing-in-disguise-for-those-with-pricing-power" target="_blank" rel="noopener">Smartkarma Original</a>.</li>
</ul>


Japan's inflation hit a 41-year high at 4.3% in January, but gradually slowed down in the following months, reaching 3.3%, 3.2%, and 3.5% in February, March, and April 2023, respectively.
Although Fuel, Electricity, and Water prices declined, other items excluding fresh vegetables, maintained inflation at a similar pace, suggesting that cost-push inflation continues to impact the overall economic environment.
This insight examines the recent quarterly performance of Yakult, Nissin, and Seven &amp; I, our top picks in the Japan Consumer Staples Sector Smartkarma Original.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/nissin-foods-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:12548:1" rel="noopener">Nissin Foods Holdings (2897 JP)</a> to report FQ4 results on May 10th with ¥158.5bn revenue and ¥8.1bn operating profit expected according to revised Feb 2023 guidance.</li>
<li>Consensus predicts Nissin Foods' operating profit to be ¥6.6bn from a revenue of ¥167.8bn, which is lower than the company's latest annual guidance.</li>
<li>Meanwhile, a higher FQ4 operating profit of ¥10.5bn is expected based on our analysis, exceeding consensus by 59%.</li>
</ul>



Nissin Foods Holdings (2897 JP) to report FQ4 results on May 10th with ¥158.5bn revenue and ¥8.1bn operating profit expected according to revised Feb 2023 guidance.
Consensus predicts Nissin Foods' operating profit to be ¥6.6bn from a revenue of ¥167.8bn, which is lower than the company's latest annual guidance.
Meanwhile, a higher FQ4 operating profit of ¥10.5bn is expected based on our analysis, exceeding consensus by 59%.


Nissin Foods' FQ4 Earnings: A Possible 59% Operating Profit Surprise?

<ul>
<li>Japanese inflation, which peaked at 4.3% in January 2023, gradually decreased to 3.5%, 3.2%, 3.3%, 3.3%, and 3.2% in the subsequent months of 2023.</li>
<li>Inflation rates remained stable for most items, excluding Fuel, Electricity, Water, and fresh vegetables, indicating the persistence of cost-push inflation.</li>
<li>In this insight, we analyze the recent quarterly performance of Yakult, Nissin, and Seven &amp; I, Japanese Consumer Staples companies discussed in our prior Smartkarma Original.</li>
</ul>


Japanese inflation, which peaked at 4.3% in January 2023, gradually decreased to 3.5%, 3.2%, 3.3%, 3.3%, and 3.2% in the subsequent months of 2023.
Inflation rates remained stable for most items, excluding Fuel, Electricity, Water, and fresh vegetables, indicating the persistence of cost-push inflation.
In this insight, we analyze the recent quarterly performance of Yakult, Nissin, and Seven &amp; I, Japanese Consumer Staples companies discussed in our prior Smartkarma Original.


Japan

NISSIN FOODS HOLDINGS CO.,LTD. produces instant noodle and processed food products.  The Company also develops pharmaceuticals.  NISSIN FOODS operates production facilities in overseas countries including Hong Kong, India, U.S., Singapore, and other countries.

Nissin Foods Holdings (2897 JP)

Japan Consumer Staples Update: Inflation Looks a Blessing in Disguise for Those with Pricing Power

Inflation in Japan has been on a decline over the year, reaching 2.6% in December 2023 after peaking at 4.3% twelve months prior.

Oshadhi Kumarasiri

Monde Nissin: The Investment Case

The sentiment is weak due to the large impairment charges. The valuation is undemanding (SOTP valuation of PHP10.21) and will prove attractive to...

Arun George

Japan Consumer Staples Update: Inflation Looks a Blessing in Disguise for Those with Pricing Power

The prevailing inflationary environment presents an opportunity for specific Japanese Food and Beverages companies that have consistently achieved...

Oshadhi Kumarasiri

Nissin Foods' FQ4 Earnings: A Possible 59% Operating Profit Surprise?

While consensus estimates are on the conservative side, projecting an OP of ¥6.6bn in FQ4, our analysis and the company guidance suggest a higher...

Oshadhi Kumarasiri

Japan Consumer Staples Update: Inflation Looks a Blessing in Disguise for Those with Pricing Power

Japanese inflation peaked at 4.3% in January 2023 but decreased to 3.5%, 3.2%, 3.3%, 3.3%, and 3.2% in the following months. For most items except...

Oshadhi Kumarasiri