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

Lawson’s China Business: Turning Profitable, Though Years Away From a Significant Contribution

EV/OP Descends to A New Low: An Opportunity to Gas Up Seven & I on the Back of Speedway Acquisition

2021 High Conviction - Seven & I Holdings: The March for America

Seven & I Acquires Speedway for $21 Billion: Expensive but Necessary Acquisition

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.

Event-Driven

<a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, the largest convenience store chain in America, announced last month (02/08/2020) that they have agreed to acquire Marathon Petroleum’s Speedway petrol stations business for $21 billion, five months after the initial deal was put on hold in the midst of the coronavirus crisis.Seven &amp; I’s share price hit a new five year low of <a target="_blank">¥3,052 </a>per share immediately following the announcement, falling 5.6% from the March 2020 COVID-19 sell off low of ¥3,232 per share.The share price has since increased 9.1% from the five-year low level and currently trades 3.0% above the March 2020 COVID-19 sell off low level. Moreover, Seven &amp; I is currently trading at 6.46x consensus FY+2 EV/OP and 11.83x FY+2 PE, 9% and 1% above the respective five-year low multiples. Although these low multiples could be somewhat misleading as it excludes the impact of the Speedway acquisition, our adjusted FY+2 EV/OP multiples are still 7.6-16.9% lower than Seven &amp; I’s past five year median multiple.

Seven &amp; I Holdings (3382 JP), the largest convenience store chain in America, announced last month (02/08/2020) that they have agreed to acquire Marathon Petroleum’s Speedway petrol stations business for $21 billion, five months after the initial deal was put on hold in the midst of the coronavirus crisis.Seven &amp; I’s share price hit a new five year low of ¥3,052 per share immediately following the announcement, falling 5.6% from the March 2020 COVID-19 sell off low of ¥3,232 per share.The share price has since increased 9.1% from the five-year low level and currently trades 3.0% above the March 2020 COVID-19 sell off low level. Moreover, Seven &amp; I is currently trading at 6.46x consensus FY+2 EV/OP and 11.83x FY+2 PE, 9% and 1% above the respective five-year low multiples. Although these low multiples could be somewhat misleading as it excludes the impact of the Speedway acquisition, our adjusted FY+2 EV/OP multiples are still 7.6-16.9% lower than Seven &amp; I’s past five year median multiple.

Speedway Acquisition: Buy the Dip as Valuation Falls Near Five-Year Low