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>The success of domestic brands in the low-cost cosmetics segment seems to be cascading into mid and high-price segments within the Chinese cosmetics market.</li>
<li>This could be bad news for <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>, whose investors are expecting the company to maintain its historical superiority in the Chinese cosmetics market.</li>
<li>We think that there’s a good chance for FY+2 EV/OP to return to the 12-20x range once the market price-in Shiseido’s weakening competitive position in the mainland China market.</li>
</ul>


The success of domestic brands in the low-cost cosmetics segment seems to be cascading into mid and high-price segments within the Chinese cosmetics market.
This could be bad news for Shiseido Company (4911 JP), whose investors are expecting the company to maintain its historical superiority in the Chinese cosmetics market.
We think that there’s a good chance for FY+2 EV/OP to return to the 12-20x range once the market price-in Shiseido’s weakening competitive position in the mainland China market.


Shiseido: International Cosmetics Brands Sent Packing by Chinese Rivals

Shifara Samsudeen, FCMA, CGMA

Equity Capital Markets

<ul>
<li>Giant Biogene has priced its IPO at HK$24.30 per share, at the lower end of the company’s indicative IPO price range of HK$24.3-27.7 per share and raised HK$495.8m (US$63.2m).</li>
<li>The HK offering was oversubscribed by only 2.08 times while the international offering was subscribed by 4.22 times.</li>
<li>Though Biogene’s IPO was priced attractively, we think lower demand for the company’s shares led to pricing at the bottom of the IPO price range.</li>
</ul>


Giant Biogene has priced its IPO at HK$24.30 per share, at the lower end of the company’s indicative IPO price range of HK$24.3-27.7 per share and raised HK$495.8m (US$63.2m).
The HK offering was oversubscribed by only 2.08 times while the international offering was subscribed by 4.22 times.
Though Biogene’s IPO was priced attractively, we think lower demand for the company’s shares led to pricing at the bottom of the IPO price range.


Giant Biogene: Thoughts on First Day Trading

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Giant Biogene (GB) raised around US$70m by pricing its  HK IPO at the low-end.</li>
<li>GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.</li>
<li>We had looked at various aspects of the deal in our previous note. In this note, we will talk about the demand for the deal and other trading dynamics.</li>
</ul>


Giant Biogene (GB) raised around US$70m by pricing its  HK IPO at the low-end.
GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
We had looked at various aspects of the deal in our previous note. In this note, we will talk about the demand for the deal and other trading dynamics.


Giant Biogene IPO Trading - Demand Was Relatively Better but Still Weak

<ul>
<li>A couple of Japanese cosmetics names, reported their quarterly results this week, with considerable earnings misses</li>
<li>
<a href="https://www.smartkarma.com/entities/kao-corp" target="_blank" data-smartkarma-citation="entities:12933:1" rel="noopener">Kao Corp (4452 JP)</a> fell 8.5% today following a 40% OP miss while <a href="https://www.smartkarma.com/entities/pola-orbis-holdings-inc" target="_blank" data-smartkarma-citation="entities:2287:1" rel="noopener">Pola Orbis Holdings (4927 JP)</a> was flat after a narrow miss of 2% from a relatively low consensus estimate.</li>
<li>If the two reports released this week are something to go by, we could expect large misses, for <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl Corp (4921 JP)</a> and <a href="https://www.smartkarma.com/entities/kose-corp" target="_blank" data-smartkarma-citation="entities:18009:1" rel="noopener">Kose Corp (4922 JP)</a> next week.</li>
</ul>


A couple of Japanese cosmetics names, reported their quarterly results this week, with considerable earnings misses

Kao Corp (4452 JP) fell 8.5% today following a 40% OP miss while Pola Orbis Holdings (4927 JP) was flat after a narrow miss of 2% from a relatively low consensus estimate.
If the two reports released this week are something to go by, we could expect large misses, for Fancl Corp (4921 JP) and Kose Corp (4922 JP) next week.


Japanese Cosmetics: Trading Around Q3 Earnings

<ul>
<li>
<a href="https://www.smartkarma.com/entities/giant-biogene-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:35950:1" rel="noopener">Giant Biogene Holding (GBH HK)</a> designs, develops and manufactures professional skin treatment products with recombinant collagen as the key bioactive ingredient in China.</li>
<li>The company’s IPO offering has been downsized and now plans to raise approx. US$80m through issuing 22.6m shares at an indicative IPO price range of HK$24.3-27.7 per share.</li>
<li>Our analysis shows that Giant Biogene’s IPO is attractively priced compared to domestic and international peers, however, we expect the upside to be limited given the current market volatility.</li>
</ul>



Giant Biogene Holding (GBH HK) designs, develops and manufactures professional skin treatment products with recombinant collagen as the key bioactive ingredient in China.
The company’s IPO offering has been downsized and now plans to raise approx. US$80m through issuing 22.6m shares at an indicative IPO price range of HK$24.3-27.7 per share.
Our analysis shows that Giant Biogene’s IPO is attractively priced compared to domestic and international peers, however, we expect the upside to be limited given the current market volatility.


Giant Biogene IPO: Peer Comparison and Valuation

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: International Cosmetics Brands Sent Packing by Chinese Rivals

The success of domestic brands in the low-cost cosmetics segment seems to be cascading into mid and high-price segments within the Chinese...

Oshadhi Kumarasiri

Giant Biogene: Thoughts on First Day Trading

Biogene priced its IPO at the bottom of the range due to lower demand as current market volatility has resulted in lower investor appetite. IPO is...

Shifara Samsudeen, FCMA, CGMA

Giant Biogene IPO Trading - Demand Was Relatively Better but Still Weak

Giant Biogene (GB) raised around US$70m by pricing its HK IPO at the low-end. In this note we talk about the trading dynamics.

Sumeet Singh

Japanese Cosmetics: Trading Around Q3 Earnings

POla Orbis signalled tough conditions in both local and overseas markets with domestic revenue falling by 1.8% YoY and overseas business affected...

Oshadhi Kumarasiri

Giant Biogene IPO: Peer Comparison and Valuation

Though Biogene's offer is significantly downsized, the IPO is priced attractively compared to doemstic and international peers. We expect limited...

Shifara Samsudeen, FCMA, CGMA

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