Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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>Denso announced 3QFY22 during market hours today posting revenue of ¥1,426bn and OP of ¥97bn. </li>
<li>Reported revenue was 4.2% higher than the consensus estimates while OP was 17.8% lower. </li>
<li>The market reacted negatively to the weak OP print but we think the focus should be all on the upcoming volume ramp.</li>
</ul>


Denso announced 3QFY22 during market hours today posting revenue of ¥1,426bn and OP of ¥97bn. 
Reported revenue was 4.2% higher than the consensus estimates while OP was 17.8% lower. 
The market reacted negatively to the weak OP print but we think the focus should be all on the upcoming volume ramp.


Denso – Slightly Disappointing Margins but It’s All About the Production Ramp

<ul>
<li>
<a href="https://asia.nikkei.com/Business/Automobiles/Toyota-plans-to-make-record-11m-cars-in-fiscal-year-starting-April" target="_blank" rel="noopener"> The Nikkei is reporting</a> that Toyota has set internal production targets of 11m units for the fiscal year ending March 2023. </li>
<li>That would imply a more than 20% YoY increase in production volumes. </li>
<li>And that in turn is very positive news not just for Toyota but for several other auto-related names.</li>
</ul>



 The Nikkei is reporting that Toyota has set internal production targets of 11m units for the fiscal year ending March 2023. 
That would imply a more than 20% YoY increase in production volumes. 
And that in turn is very positive news not just for Toyota but for several other auto-related names.


Toyota – 11m Unit Production Target Is a Positive Surprise

<ul>
<li>We spoke to Aisin on Friday to discuss the impact of Toyota’s EV strategy announcement, the new Tundra and semi shortages. </li>
<li>Overall, our impression was positive, and we expect strong performance from the company next year. </li>
<li>While there are still various reports on semi shortages we expect the market to look through production stoppages from now on.</li>
</ul>


We spoke to Aisin on Friday to discuss the impact of Toyota’s EV strategy announcement, the new Tundra and semi shortages. 
Overall, our impression was positive, and we expect strong performance from the company next year. 
While there are still various reports on semi shortages we expect the market to look through production stoppages from now on.


Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Global PMX is an auto parts maker in Taiwan which could be a key beneficiary of a recovery in cars ships shortage. </li>
<li>Volkswagen's CEO Herbert Diess recently mentioned that the worst of the global chip shortage may be in the rear-view mirror.</li>
<li>Our base case valuation of Global PMX is implied price of 250 TWD per share. This represents 39% higher than the current price. </li>
</ul>


Global PMX is an auto parts maker in Taiwan which could be a key beneficiary of a recovery in cars ships shortage. 
Volkswagen's CEO Herbert Diess recently mentioned that the worst of the global chip shortage may be in the rear-view mirror.
Our base case valuation of Global PMX is implied price of 250 TWD per share. This represents 39% higher than the current price. 


Global PMX - A Key Beneficiary in Taiwan of a Recovery in Cars Chips Shortage

<p>Denso announced its 2QFY22 results on Friday (29th October) and the company recorded revenue of ¥1,226bn (-9.6% QoQ, -6.4% YoY) and OP of ¥52bn (OPM of 4.3% compared to 2.8% and 7.9% respectively in 2QFY21 and 1QFY22). Results were somewhat tepid but the company retained its guidance signalling confidence in a sharp production volume recovery.</p>

Denso announced its 2QFY22 results on Friday (29th October) and the company recorded revenue of ¥1,226bn (-9.6% QoQ, -6.4% YoY) and OP of ¥52bn (OPM of 4.3% compared to 2.8% and 7.9% respectively in 2QFY21 and 1QFY22). Results were somewhat tepid but the company retained its guidance signalling confidence in a sharp production volume recovery.

Denso – Steady Results on Top of Technological Supremacy

Japan

DENSO CORPORATION manufactures electronic parts for automobiles.  The Company's products include automobile air conditioners, air bags, ignition systems, generators, power steering systems, and spark plugs with iridium electrode. The Company also produces communication equipment for mobile navigation system.

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Denso Corp (6902 JP)

Denso – Slightly Disappointing Margins but It’s All About the Production Ramp

Denso's reported OP was 17.8% lower than consensus estimates. The market reacted negatively to the weak OP print but we think the focus should be...

Mio Kato

Toyota – 11m Unit Production Target Is a Positive Surprise

Toyota has set internal production targets of 11m units for the FY23 implying a more than 20% YoY increase which is very positive news not just for...

Mio Kato

Aisin – Positive Chat With the Company

We spoke to Aisin on Friday to discuss the impact of Toyota’s EV strategy announcement, the new Tundra and semi shortages. Our impression was...

Mio Kato

Global PMX - A Key Beneficiary in Taiwan of a Recovery in Cars Chips Shortage

Global PMX is an auto parts maker in Taiwan which could be a key beneficiary of a recovery in cars ships shortage in 2022.

Douglas Kim

Denso – Steady Results on Top of Technological Supremacy

Denso results were somewhat tepid but the company retained its guidance signalling confidence in a sharp production volume recovery.

Mio Kato

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