Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Our bullish outlook, intact since early November, has been based on the fact that virtually all signals from the market have been consistent with risk-on behavior that we would expect to see in bull markets. Now, the picture is less clear; we are still bullish, just slightly less so than we have been over the past 2-3 months. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary, Health Care, Manufacturing, and Technology.

Our bullish outlook, intact since early November, has been based on the fact that virtually all signals from the market have been consistent with risk-on behavior that we would expect to see in bull markets. Now, the picture is less clear; we are still bullish, just slightly less so than we have been over the past 2-3 months. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary, Health Care, Manufacturing, and Technology.

U.S. Equity Strategy: Downgrading Manufacturing & Transports

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul><li>A company called Zinus whose main business is in making mattresses is getting ready for an IPO in Korea. The Zinus IPO is likely to be one of the most anticipated in the Korean market in the next several months (our best guess is in 1H18). The company's mattresses are one of the best-selling items in Amazon's furniture section. Zinus shares are already trading on the K-OTC market. As of September 18th, 2017, Zinus shares were trading at 112,000 won per share on the K-OTC market, which would suggest a market cap of 1.4 trillion won. The company has hired NH Investment &amp; Securities to be its banker to prepare for an IPO. </li><li>Zinus is an amazing comeback story. The company was established in 1979 and it was initially called Jinwoong. The company was listed on KOSPI in 1989. In the 1990s, the company was one of the largest tent manufacturers in the world, selling its product in major outlets such as Walmart. However, the company fell into business difficulties in the late 1990s to early 2000s and it was forced to delist from KOSPI in 2005. Zinus started to invest in the mattress business in 2003 and has made a fantastic comeback with its best-selling mattresses. </li><li>Valuations - With a market cap of 1.4 trillion won in the K-OTC market, using an estimated annualized 2017 net profit of 79 billion won, this suggests a P/E of 18x. The company's two major comps in the US are <a href="https://www.smartkarma.com/entities/7020" target="_blank" data-smartkarma-citation="entities:7020:1">Tempur Sealy International Inc (TPX US)</a> which trades at a P/E of 18x and <a href="https://www.smartkarma.com/entities/14631" target="_blank" data-smartkarma-citation="entities:14631:1">Select Comfort Corporation (SCSS US)</a> which trades at 21x. </li><li>The company has been generating phenomenal growth in sales and profits in the past three years. From 2013 to 2016, its sales increased 40% CAGR and its operating profit jumped 97% CAGR.</li></ul>

A company called Zinus whose main business is in making mattresses is getting ready for an IPO in Korea. The Zinus IPO is likely to be one of the most anticipated in the Korean market in the next several months (our best guess is in 1H18). The company's mattresses are one of the best-selling items in Amazon's furniture section. Zinus shares are already trading on the K-OTC market. As of September 18th, 2017, Zinus shares were trading at 112,000 won per share on the K-OTC market, which would suggest a market cap of 1.4 trillion won. The company has hired NH Investment &amp; Securities to be its banker to prepare for an IPO. Zinus is an amazing comeback story. The company was established in 1979 and it was initially called Jinwoong. The company was listed on KOSPI in 1989. In the 1990s, the company was one of the largest tent manufacturers in the world, selling its product in major outlets such as Walmart. However, the company fell into business difficulties in the late 1990s to early 2000s and it was forced to delist from KOSPI in 2005. Zinus started to invest in the mattress business in 2003 and has made a fantastic comeback with its best-selling mattresses. Valuations - With a market cap of 1.4 trillion won in the K-OTC market, using an estimated annualized 2017 net profit of 79 billion won, this suggests a P/E of 18x. The company's two major comps in the US are Tempur Sealy International Inc (TPX US) which trades at a P/E of 18x and Select Comfort Corporation (SCSS US) which trades at 21x. The company has been generating phenomenal growth in sales and profits in the past three years. From 2013 to 2016, its sales increased 40% CAGR and its operating profit jumped 97% CAGR.

Zinus IPO Preview (Part 1) - An Amazing Comeback Story (#1 Mattress Brand on Amazon)

United States

Somnigroup International Inc. operates as a bedding company. The Company develops, produces, and markets mattresses, adjustable bases, pillows, and other sleep and relaxation products. Somnigroup International serves customers worldwide.

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Somnigroup International (SGI US)

U.S. Equity Strategy: Downgrading Manufacturing & Transports

In today’s report we highlight attractive Groups and stocks within Consumer Discretionary, Health Care, Manufacturing, and Technology

Vermilion Research

Zinus IPO Preview (Part 1) - An Amazing Comeback Story (#1 Mattress Brand on Amazon)

A company called Zinus whose main business is in making mattresses is getting ready for an IPO in Korea. The Zinus IPO is likely to be one of the...

Douglas Kim

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52-week Range

Market Cap (USDm)

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