Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

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

This is the FIRST of a series of reports on Pigeon Corp (7956 JP), where we will be taking a closer look at the company’s core business segments. This insight will mainly focus on the company’s Overseas Business (excluding China). Pigeon based in Japan is the market leader for baby care products in the country while the company also has operations in China, Southeast Asia, the Middle East, Oceania, North America and Europe. The domestic baby care market in Japan is currently going through a decline as a result of decreasing birth rates and as a result, companies such as Pigeon have been increasingly focusing on overseas markets to compensate for the decline in their domestic segments. Pigeon’s three largest business segments are Domestic Baby and Mother Care, China Business and the Overseas Business. The Overseas segment currently accounts for about 23% of consolidated revenues and has grown at a CAGR of about 1.6% over the past five years. Despite the Overseas Business growing at lower rates historically, we expect the segment to drive the company’s future growth. The company has been increasingly focusing on expanding its operations in markets such as Indonesia, India, Nigeria and Vietnam, the markets which will have the highest GDP growth over the next few years coupled with increasing birth rates. While some of these countries have declining birth rates, due to having a large population, even 1-2% birth rates result in several million newborn babies a year.We discuss the details below.

This is the FIRST of a series of reports on Pigeon Corp (7956 JP), where we will be taking a closer look at the company’s core business segments. This insight will mainly focus on the company’s Overseas Business (excluding China). Pigeon based in Japan is the market leader for baby care products in the country while the company also has operations in China, Southeast Asia, the Middle East, Oceania, North America and Europe. The domestic baby care market in Japan is currently going through a decline as a result of decreasing birth rates and as a result, companies such as Pigeon have been increasingly focusing on overseas markets to compensate for the decline in their domestic segments. Pigeon’s three largest business segments are Domestic Baby and Mother Care, China Business and the Overseas Business. The Overseas segment currently accounts for about 23% of consolidated revenues and has grown at a CAGR of about 1.6% over the past five years. Despite the Overseas Business growing at lower rates historically, we expect the segment to drive the company’s future growth. The company has been increasingly focusing on expanding its operations in markets such as Indonesia, India, Nigeria and Vietnam, the markets which will have the highest GDP growth over the next few years coupled with increasing birth rates. While some of these countries have declining birth rates, due to having a large population, even 1-2% birth rates result in several million newborn babies a year.We discuss the details below.

Pigeon (Part I): Overseas Segment (Excl. China) The Key Driver of Growth for the Company

Equity Capital Markets

Uni-Charm Indonesia Tbk PT / Equity Capital Markets

Unicharm Indonesia, the subsidiary of Unicharm Japan manufactures baby diapers, sanitary napkins and adult diapers and is the market leader in the country for the above products. The company is currently majority owned by Unicharm Japan (74%) and Purinusa Ekapersada PT, a manufacturer of paper and paper products based in Indonesia (26%). The company is exposed to a growing market with positive demographic trends which should help the company grow its top line.The company has filed for an IPO to list its shares on the Indonesia Stock Exchange. Unicharm will be listing 20% of its outstanding shares (approximately 831.3m shares) at an indicative price range of Rp1,400-1,800 per share. At the above price range, the company is expected to raise between Rp1.2-1.5trn (US$82-106m) making it the largest IPO of 2019 in Indonesia. Based on our analysis, we believe the company is fairly valued at the low-end of its IPO pricing.

Unicharm Indonesia, the subsidiary of Unicharm Japan manufactures baby diapers, sanitary napkins and adult diapers and is the market leader in the country for the above products. The company is currently majority owned by Unicharm Japan (74%) and Purinusa Ekapersada PT, a manufacturer of paper and paper products based in Indonesia (26%). The company is exposed to a growing market with positive demographic trends which should help the company grow its top line.The company has filed for an IPO to list its shares on the Indonesia Stock Exchange. Unicharm will be listing 20% of its outstanding shares (approximately 831.3m shares) at an indicative price range of Rp1,400-1,800 per share. At the above price range, the company is expected to raise between Rp1.2-1.5trn (US$82-106m) making it the largest IPO of 2019 in Indonesia. Based on our analysis, we believe the company is fairly valued at the low-end of its IPO pricing.

Unicharm Indonesia IPO: A Charming Business Attractive at the Low-End of Pricing

Indonesia

Uni-Charm Indonesia Tbk PT serves customers in Indonesia.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Uni-Charm Indonesia Tbk PT (UCID IJ)

Pigeon (Part I): Overseas Segment (Excl. China) The Key Driver of Growth for the Company

This is the FIRST of a series of reports on Pigeon Corp (7956 JP), where we will be taking a closer look at the company’s core business segments....

Shifara Samsudeen, FCMA, CGMA

Unicharm Indonesia IPO: A Charming Business Attractive at the Low-End of Pricing

Unicharm Indonesia, the subsidiary of Unicharm Japan manufactures baby diapers, sanitary napkins and adult diapers and is the market leader in the...

Shifara Samsudeen, FCMA, CGMA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)