Investment Rating - The investment rating for Shiseido is Underweight [2][55]. Core Insights - Shiseido plans to implement structural reforms in F12/25 to improve profits in the Japan business by reviewing personnel expenses and promoting digitalization and e-commerce channels [5]. - The company sees growth potential in the Japanese market, particularly among the elderly and younger demographics, as well as male customers, aiming to enhance brand value for both domestic and Asian markets [5]. - In the China and Travel Retail (TR) business, Shiseido aims to regain price control and advance restructuring through the integration of two businesses [5]. - The US market presents challenges due to high price sensitivity and competition, but Shiseido identifies significant expansion opportunities in e-commerce and fragrances [5]. Valuation Methodology - The price target for Shiseido is set at ¥2,600, valuing the stock at 11.5x EV/EBITDA based on F12/26 forecasts [6].

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Cosmetics, Household & Personal Care - **Key Companies Discussed**: L'Oreal, Kao (4452 JP), Kose (4922 JP), Shiseido (4911 JP) [1][2] Core Insights - **US Market Outlook**: The outlook for the US cosmetics market remains uncertain, particularly in the makeup segment, which is experiencing weakness. There was a notable drop in demand in the second half of March, influenced by Latino consumer dynamics [5][6]. - **China Market Dynamics**: The Chinese market is described as flat, with local companies, including smaller players, gaining market share, especially in the Consumer/Mass market category. Travel retail sales for L'Oreal were down approximately 8% in Q1 [3][4]. - **Growth Projections**: L'Oreal's growth guidance for the Chinese market is considered optimistic at 4-5%, with a more realistic expectation of 2-3% for FY25 [4]. Additional Important Points - **Tariff Impact**: L'Oreal indicated that 50% of its US sales are manufactured domestically, with manageable tariff impacts on cost of goods sold (COGS). The tariff can be passed through at a retail price increase of 3-4% depending on the product portfolio [6]. - **Upcoming Briefings**: Key Q1 briefings for Kao, Kose, and Shiseido are scheduled for May 8, May 9, and May 12, respectively, which may provide further insights into the market conditions [1][2].