Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

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

IHI Corporation manufactures heavy machinery. The Company produces aircraft jet engines, rocket propulsion systems, and ships for military and commercial use. Ishikawajima-Harima also constructs petroleum refineries and nuclear power plants.

<ul>
<li>Sales and operating profit declined YoY in 1H, but new orders were up 17.5% and the book-to-bill ratio rose from 1.00 to 1.25. anagement has raised full-year guidance.</li>
<li>Aerospace &amp; Defense continue to lead growth, with nuclear energy and Asian EPC making significant contributions to new orders and the restructuring of Industrial Systems &amp; Machinery boosting operating profit.</li>
<li>Share price down 15% in two weeks to 23x FY Mar-26 EPS guidance. Once again a reasonably valued investment in Japan's rising defense budget and corporate restructuring.</li>
</ul>


Sales and operating profit declined YoY in 1H, but new orders were up 17.5% and the book-to-bill ratio rose from 1.00 to 1.25. anagement has raised full-year guidance.
Aerospace &amp; Defense continue to lead growth, with nuclear energy and Asian EPC making significant contributions to new orders and the restructuring of Industrial Systems &amp; Machinery boosting operating profit.
Share price down 15% in two weeks to 23x FY Mar-26 EPS guidance. Once again a reasonably valued investment in Japan's rising defense budget and corporate restructuring.


IHI (7013 JP): Orders and Profits Headed Up, Share Price Down

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

CyberAgent, Inc. operates blog media website, Ameba.  The Company also operates internet advertising agency, foreign exchange trading website, and creates PC and mobile contents such as advertisements and games. CyberAgent invests in companies with internet related business.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent Inc (4751 JP)</a> reported 4QFY09/2025 results last week. Full-year and 4QFY09/2025 revenue and OP beat consensus as well as guidance by a huge margin.</li>
<li>Despite reporting a set of strong results, CA’s share price has been down 15% which we think was driven by the company’s cautious guidance for FY09/2026.</li>
<li>With a strong pipeline of gaming titles coupled with global expansion of English versions of newly released titles, we think CA’s FY09/2026 guidance is overly conservative.</li>
</ul>



CyberAgent Inc (4751 JP) reported 4QFY09/2025 results last week. Full-year and 4QFY09/2025 revenue and OP beat consensus as well as guidance by a huge margin.
Despite reporting a set of strong results, CA’s share price has been down 15% which we think was driven by the company’s cautious guidance for FY09/2026.
With a strong pipeline of gaming titles coupled with global expansion of English versions of newly released titles, we think CA’s FY09/2026 guidance is overly conservative.


CyberAgent: Overblown Market Response to Overly Conservative Guidance

freee K.K. develops software products. The Company produces cloud based accounting softwares, automatic online accounting systems, and other products. freee provides its services throughout Japan.

<ul>
<li>Freee reported 1QFY06/2026 results today. 1Q revenues increased 32.1% YoY to ¥9.7bn with an Adj. OPM of ¥690m (vs ¥480m in 1QFY0/2025). Both revenue and GAAP OP beat consensus.</li>
<li>
<a href="https://www.smartkarma.com/entities/freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">Freee KK (4478 JP)</a> ’s shares had a sell-off following its 4QFY06/2025 earnings announcement which saw the company breaking away from its recent trend of consecutive quarterly operating profits.</li>
<li>As we highlighted in our previous insight, 4Q decline was only a temporary setback as the company’s profitability has bounced back and we expect earnings momentum to continue.</li>
</ul>


Freee reported 1QFY06/2026 results today. 1Q revenues increased 32.1% YoY to ¥9.7bn with an Adj. OPM of ¥690m (vs ¥480m in 1QFY0/2025). Both revenue and GAAP OP beat consensus.

Freee KK (4478 JP) ’s shares had a sell-off following its 4QFY06/2025 earnings announcement which saw the company breaking away from its recent trend of consecutive quarterly operating profits.
As we highlighted in our previous insight, 4Q decline was only a temporary setback as the company’s profitability has bounced back and we expect earnings momentum to continue.


2025 High Conviction – Freee: Earnings Recovery Is Underway

Hamamatsu Photonics Kk / Equity Bottom-Up

HAMAMATSU PHOTONICS K.K. manufactures electron tubes, semiconductors, and image processors.  The Company's products include photosensitive electronic tubes, optical/image sensors, X-ray related products, laser related products, photodiodes, light-emitting diodes (LED) and video camera used for measuring equipment.

<ul>
<li>Announced last Friday, FY Sep-25 sales and net profit were in line with guidance, but operating profit fell short. On Monday, the shares dropped 4.5%, wiping out a month's gains.</li>
<li>Looking ahead, management expects three years of sales and profit growth as capex declines, depreciation and R&amp;D level off, and the NKT Photonics acquisition approaches breakeven.</li>
<li>In this scenario, semiconductor, bio-medical, defense and quantum computing applications should drive 3-year sales growth of 24% and a 71% increase in net profit, bringing the P/E down to 20X.</li>
</ul>


Announced last Friday, FY Sep-25 sales and net profit were in line with guidance, but operating profit fell short. On Monday, the shares dropped 4.5%, wiping out a month's gains.
Looking ahead, management expects three years of sales and profit growth as capex declines, depreciation and R&amp;D level off, and the NKT Photonics acquisition approaches breakeven.
In this scenario, semiconductor, bio-medical, defense and quantum computing applications should drive 3-year sales growth of 24% and a 71% increase in net profit, bringing the P/E down to 20X.


Hamamatsu Photonics (6965 JP): Capex Peaking, Profits to Rebound

NEC Corporation manufactures and markets computers, telecommunication equipment, electronic devices, semiconductors, and software.  The Company's products include printers, modems, cellular phones, plasma display panels (PDP), network systems, memory, integrated circuits (IC), thin film transistor-liquid crystal display (TFT-LCD), and printed circuit boards (PCB). NEC operates worldwide.

<ul>
<li>NEC and Siemens plan to develop an automated robot teaching system for faster set-up and more efficient operation of production lines incorporating multiple robots.</li>
<li>NEC's FY Mar-26 guidance raised on strong 1H results. BluStellar, which includes digital twins for robot teaching, grew faster than expected.  </li>
<li>Aerospace/Defense led sales growth and followed BluStellar in operating profit. Improving product mix and rising Japanese defense budget point to growing long-term potential.</li>
</ul>


NEC and Siemens plan to develop an automated robot teaching system for faster set-up and more efficient operation of production lines incorporating multiple robots.
NEC's FY Mar-26 guidance raised on strong 1H results. BluStellar, which includes digital twins for robot teaching, grew faster than expected.  
Aerospace/Defense led sales growth and followed BluStellar in operating profit. Improving product mix and rising Japanese defense budget point to growing long-term potential.


NEC (6701 JP): Tie-Up with Siemens Adds to Growth Potential

LightStream Research
Long-Short Analysis on Japan, Asia and the World

CyberAgent: Overblown Market Response to Overly Conservative Guidance

Despite reporting a strong set of results that beat consensus and guidance, CyberAgent's share price is down 15% as market reacted to its...

Shifara Samsudeen, FCMA, CGMA

2025 High Conviction – Freee: Earnings Recovery Is Underway

Freee's 1Q earnings affirm that 4QFY06/2025 setback was only temporary with revenues up 32.1% YoY and strong profits that beat consensus. We...

Shifara Samsudeen, FCMA, CGMA

Hamamatsu Photonics (6965 JP): Capex Peaking, Profits to Rebound

High growth in capital spending is ending and depreciation should follow. Growth in R&D and SGA expenses is also scheduled to drop sharply, while...

Scott Foster

NEC (6701 JP): Tie-Up with Siemens Adds to Growth Potential

Collaboration with Siemens in industrial robot motion control and rising Japanese defense spending under Prime Minister Takaichi should boost NEC's...

Scott Foster

IHI (7013 JP): Orders and Profits Headed Up, Share Price Down

Down 15% in the recent market sell-off, IHI is again an attractive play on Japan's rising defense spending and the company's own restructuring....

Scott Foster

CyberAgent: Overblown Market Response to Overly Conservative Guidance

Despite reporting a strong set of results that beat consensus and guidance, CyberAgent's share price is down 15% as market reacted to its...

Shifara Samsudeen, FCMA, CGMA

2025 High Conviction – Freee: Earnings Recovery Is Underway

​Freee's 1Q earnings affirm that 4QFY06/2025 setback was only temporary with revenues up 32.1% YoY and strong profits that beat consensus. We...

Shifara Samsudeen, FCMA, CGMA

Hamamatsu Photonics (6965 JP): Capex Peaking, Profits to Rebound

High growth in capital spending is ending and depreciation should follow. Growth in R&D and SGA expenses is also scheduled to drop sharply, while...

Scott Foster

NEC (6701 JP): Tie-Up with Siemens Adds to Growth Potential

Collaboration with Siemens in industrial robot motion control and rising Japanese defense spending under Prime Minister Takaichi should boost NEC's...

Scott Foster

Freee's 1Q earnings affirm that 4QFY06/2025 setback was only temporary with revenues up 32.1% YoY and strong profits that beat consensus. We...