Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Shiseido’s Q3 revenue rose 4.6% YoY to ¥224bn, marking its first growth in three quarters, though full-year sales guidance was cut 3%.</li>
<li>Profitability remained pressured by tariffs and Drunk Elephant weakness; product margins fell 340bps YoY, but SG&amp;A improvements limited overall margin decline to 80bps.</li>
<li>Management maintained core OP profit guidance and continued executing structural reforms, achieving ¥21bn cost savings YTD, with deeper efficiency cuts planned through 2026.</li>
</ul>


Shiseido’s Q3 revenue rose 4.6% YoY to ¥224bn, marking its first growth in three quarters, though full-year sales guidance was cut 3%.
Profitability remained pressured by tariffs and Drunk Elephant weakness; product margins fell 340bps YoY, but SG&amp;A improvements limited overall margin decline to 80bps.
Management maintained core OP profit guidance and continued executing structural reforms, achieving ¥21bn cost savings YTD, with deeper efficiency cuts planned through 2026.


Shiseido (4911) | Progress on Reforms, but Growth Still Elusive

Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

<ul>
<li>Shiseido’s share price dropped 70% over the past six years, compared to a 110% gain by Topix, but the stock just crossed its 200-day MAV. Time for another look?  </li>
<li>In our view, the stock lacks most of the required criteria for a successful turnaround, and reeks of all the important criteria for failure. </li>
<li>Shiseido’s stock already prices in a 50% earnings recovery. To be compelling, the forecast needs to be 4 standard deviations above the mean, or the price needs to decline 30%.  </li>
</ul>


Shiseido’s share price dropped 70% over the past six years, compared to a 110% gain by Topix, but the stock just crossed its 200-day MAV. Time for another look?  
In our view, the stock lacks most of the required criteria for a successful turnaround, and reeks of all the important criteria for failure. 
Shiseido’s stock already prices in a 50% earnings recovery. To be compelling, the forecast needs to be 4 standard deviations above the mean, or the price needs to decline 30%.  


Why Shiseido (4911) Never Worked as a Turnaround Stock

<ul>
<li>Shiseido’s core brand remains strong, but years of weak growth, high costs, and tariff risks have pushed valuations to deeply discounted, near-decade lows.</li>
<li>Early signs from Japan show margin recovery is possible; aggressive cost-cutting could double core operating margins and unlock significant upside if execution holds.</li>
<li>If management fails to deliver, Shiseido’s global brand equity, strategic footprint, and low valuation make it an obvious acquisition target for PE or industry buyers.</li>
</ul>


Shiseido’s core brand remains strong, but years of weak growth, high costs, and tariff risks have pushed valuations to deeply discounted, near-decade lows.
Early signs from Japan show margin recovery is possible; aggressive cost-cutting could double core operating margins and unlock significant upside if execution holds.
If management fails to deliver, Shiseido’s global brand equity, strategic footprint, and low valuation make it an obvious acquisition target for PE or industry buyers.


Shiseido (4911) | Beauty in the Bargain Bin

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

<ul>
<li>Micron numbers will be amazing, but will they be enough to justify the parabolic price actions? Likely, yes. </li>
<li>Intel hiring a Trump proxy a further sign its aligning itself with the Govt's designs for onshore chip production. </li>
<li>Estee lauder is surging but what about Shiseido and Kose? </li>
</ul>


Micron numbers will be amazing, but will they be enough to justify the parabolic price actions? Likely, yes. 
Intel hiring a Trump proxy a further sign its aligning itself with the Govt's designs for onshore chip production. 
Estee lauder is surging but what about Shiseido and Kose? 


Tech Cautious Ahead of Micron, but Dip Buying Starting to Take Hold

Analyst

Steve

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nippon-paint-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:7387:1" rel="noopener">Nippon Paint Holdings (4612 JP)</a> is a branded decorative paint player.  China made up nearly 40% of the operating profit of the company. </li>
<li>
<a href="https://www.smartkarma.com/entities/saizeriya-co-ltd" target="_blank" data-smartkarma-citation="entities:14362:1" rel="noopener">Saizeriya (7581 JP)</a> is a Japanese restaurant chain of fast casual Italian food, with currently the majority of operating profit and growth coming from China.</li>
<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> is a Japanese beauty company that relies heavily on China. </li>
</ul>



Nippon Paint Holdings (4612 JP) is a branded decorative paint player.  China made up nearly 40% of the operating profit of the company. 

Saizeriya (7581 JP) is a Japanese restaurant chain of fast casual Italian food, with currently the majority of operating profit and growth coming from China.

Shiseido Company (4911 JP) is a Japanese beauty company that relies heavily on China. 


Japan

Shiseido Company, Limited manufactures cosmetic and toiletry products. The Company offers an array of makeup and skin-care products, toiletries, beauty salon, pharmaceuticals, foodstuffs, and fine chemicals.

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Shiseido Company (4911 JP)

Shiseido (4911) | Progress on Reforms, but Growth Still Elusive

Shiseido's Q3 revenue up 4.6% YoY, but full-year sales guidance cut 3% due to tariffs and Drunk Elephant weakness. Cost savings and efficiency...

Mark Chadwick

Why Shiseido (4911) Never Worked as a Turnaround Stock

Shiseido's stock may have crossed its 200-day MAV, but it lacks the criteria for a successful turnaround and may still be overpriced.

Michael Allen

Shiseido (4911) | Beauty in the Bargain Bin

Shiseido's core brand is strong but faces challenges; potential for margin recovery through cost-cutting, with potential for acquisition if...

Mark Chadwick

Tech Cautious Ahead of Micron, but Dip Buying Starting to Take Hold

Micron's strong numbers may justify high prices, Intel aligning with government for chip production, Estee Lauder surging but competition from...

Andrew Jackson

China Consumer Plays Listed In Japan

In this insight, we look at three Japan listed China consumer plays, which I have written before. They are Nippon Paint, Saizeriya, and Shiseido.

Steve

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Shiseido (4911) | Progress on Reforms, but Growth Still Elusive

​Shiseido's Q3 revenue up 4.6% YoY, but full-year sales guidance cut 3% due to tariffs and Drunk Elephant weakness. Cost savings and efficiency...

Mark Chadwick

Why Shiseido (4911) Never Worked as a Turnaround Stock

​Shiseido's stock may have crossed its 200-day MAV, but it lacks the criteria for a successful turnaround and may still be overpriced.

Michael Allen

Shiseido (4911) | Beauty in the Bargain Bin

​Shiseido's core brand is strong but faces challenges; potential for margin recovery through cost-cutting, with potential for acquisition if...

Mark Chadwick

Tech Cautious Ahead of Micron, but Dip Buying Starting to Take Hold

​Micron's strong numbers may justify high prices, Intel aligning with government for chip production, Estee Lauder surging but competition from...

Andrew Jackson

China Consumer Plays Listed In Japan

In this insight, we look at three Japan listed China consumer plays, which I have written before. They are Nippon Paint, Saizeriya, and Shiseido.

Steve

Shiseido's Q3 revenue up 4.6% YoY, but full-year sales guidance cut 3% due to tariffs and Drunk Elephant weakness. Cost savings and efficiency...

Shiseido's stock may have crossed its 200-day MAV, but it lacks the criteria for a successful turnaround and may still be overpriced.

Shiseido's core brand is strong but faces challenges; potential for margin recovery through cost-cutting, with potential for acquisition if...

Micron's strong numbers may justify high prices, Intel aligning with government for chip production, Estee Lauder surging but competition from...