Equity Analyst, LightStream Research

Oshadhi Kumarasiri

An equity research analyst with over 7 years of experience in multiple sectors. Previously worked for one of the world's largest asset managers with about USD2.5trn in AUM, covering small and micro-cap companies in the consumer sphere across Europe and developed Asia. Also experienced in covering multiple industries including banking, insurance and asset management, retail, tech, telco and REIT.

Equity Analyst

Fast Retailing: China Near Pandemic Lows and America, Europe and Asia Affected by Rising Inflation

Fast Retailing: Guidance Upgraded, Yet The Upside Seems Limited Due to Stretched Valuations

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>Even though 2QFY22 results were broadly in line with consensus, <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a>’s share price rose 8.8% as markets expected the worst amidst the Russian controversy and Shanghai lockdowns.</li>
<li>However, this price movement seems unwarranted given the impact of Shanghai lockdowns could only be seen in the 3QFY22 financial statements.</li>
<li>During earnings, FR introduced North America &amp; Europe as new growth drivers to replace the declining Chinese market. But we are not convinced that they are up to the task.</li>
</ul>


Even though 2QFY22 results were broadly in line with consensus, Fast Retailing (9983 JP)’s share price rose 8.8% as markets expected the worst amidst the Russian controversy and Shanghai lockdowns.
However, this price movement seems unwarranted given the impact of Shanghai lockdowns could only be seen in the 3QFY22 financial statements.
During earnings, FR introduced North America &amp; Europe as new growth drivers to replace the declining Chinese market. But we are not convinced that they are up to the task.


Fast Retailing: New Growth Pillar May Not Be Strong Enough to Support the Weight of Valuation