Global Automotive Stocks/EV Focus/Event Driven, SC Capital

SC Capital

Global Automotive Stocks/EV Focus/Event Driven

Over 22 years covering Japanese equities on both the sell side and the buy side. 

Bottom-up Japan Equities Research

Equity Bottom-Up

<ul>
<li>Toyota's Q2 EPS undershot estimates by 28%. FY3/23 guidance was kept flat, but given a more favorable assumption for forex tailwinds, Toyota effectively lowered FY3/23 EPS by 7%.  </li>
<li>Management partially admitted to parts of recent media reports that Toyota was overhauling its EV strategy.  Targets of 3.5m BEVs by 2030 are unchanged, but the ramp may be slower.</li>
<li>Toyota's 2H FY3/23 hurdles are low and its auto division's operating profits appear to be bottoming. Stock may still be a laggard, but we're bullish on a 12-month basis. </li>
</ul>


Toyota's Q2 EPS undershot estimates by 28%. FY3/23 guidance was kept flat, but given a more favorable assumption for forex tailwinds, Toyota effectively lowered FY3/23 EPS by 7%.  
Management partially admitted to parts of recent media reports that Toyota was overhauling its EV strategy.  Targets of 3.5m BEVs by 2030 are unchanged, but the ramp may be slower.
Toyota's 2H FY3/23 hurdles are low and its auto division's operating profits appear to be bottoming. Stock may still be a laggard, but we're bullish on a 12-month basis. 


Toyota's Q2 Is a Huge Miss; EV Strategy in Flux

Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

Thematic (Sector/Industry)

<ul>
<li>Japan is sending a delegation of top trade negotiators to the U.S, but both sides are making the same mistakes that led to WWII.</li>
<li>I asked Grok to use game theory to map out the most likely scenarios for how Japanese and U.S. governments might avoid the worst-case scenario. </li>
<li>According to Grok, both sides have a strong motivation to delay any agreement no matter what the other side offers.</li>
</ul>


Japan is sending a delegation of top trade negotiators to the U.S, but both sides are making the same mistakes that led to WWII.
I asked Grok to use game theory to map out the most likely scenarios for how Japanese and U.S. governments might avoid the worst-case scenario. 
According to Grok, both sides have a strong motivation to delay any agreement no matter what the other side offers.


Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

<ul>
<li>Tech is off the menu for most as CoreWeave shakes AI sentiment further.</li>
<li>Japanese autos largely priced in the tariff news yesterday, although big dividends up for grabs may see renewed interest.</li>
<li>Japan set for another day of duck-and-cover with the rotation back towards domestic defensive set to continue.</li>
</ul>


Tech is off the menu for most as CoreWeave shakes AI sentiment further.
Japanese autos largely priced in the tariff news yesterday, although big dividends up for grabs may see renewed interest.
Japan set for another day of duck-and-cover with the rotation back towards domestic defensive set to continue.


Japan Morning Connection: US Auto Tariffs Shaking Markets but Ex-Date May Lure Buyers Back in Japan

<ul>
<li>More than 40 potential turnaround stocks will report Q3 results in the coming weeks. </li>
<li>The average spread between the lowest and highest street estimate for the stocks on our target list is a gaping 45%. This doesn't mean what most people think it means.</li>
<li>Rohm, Taiyo Yuden, Yamato, Hamamatsu, JFE, Tsuruha look nice, but we pass on Shiseido and Mazda.</li>
</ul>


More than 40 potential turnaround stocks will report Q3 results in the coming weeks. 
The average spread between the lowest and highest street estimate for the stocks on our target list is a gaping 45%. This doesn't mean what most people think it means.
Rohm, Taiyo Yuden, Yamato, Hamamatsu, JFE, Tsuruha look nice, but we pass on Shiseido and Mazda.


Unloved Japan Roundup: Don't Panic Ahead of Q3 Results Rush

<ul>
<li>Buying the worst-performing stocks of the previous 12 months has outperformed Japan’s Topix index by an average of 7% annually for 9 straight years</li>
<li>For most of 2024, the strategy didn’t work, but an uptick in TOBs, MBOs, and merger talks is suddenly making it unsafe to short low-PBR companies indiscriminately.</li>
<li>Suddenly, dozens of previously complacent companies have the fear of God and are taking action to up their profitability and the market is taking notice. </li>
</ul>


Buying the worst-performing stocks of the previous 12 months has outperformed Japan’s Topix index by an average of 7% annually for 9 straight years
For most of 2024, the strategy didn’t work, but an uptick in TOBs, MBOs, and merger talks is suddenly making it unsafe to short low-PBR companies indiscriminately.
Suddenly, dozens of previously complacent companies have the fear of God and are taking action to up their profitability and the market is taking notice. 


2024 Was Ugly for Turnarounds, 2025 Should Be Awesome!

Japan

Mazda Motor Corporation manufactures and sells automobiles, trucks, auto parts, and its accessories.  The Company operates its business worldwide.

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Mazda Motor (7261 JP)

Toyota's Q2 Is a Huge Miss; EV Strategy in Flux

Toyota saw a huge miss in Q2 and admits they're revamping their EV plans. This may seem negative, but it's a huge positive ahead of a recovering...

SC Capital

Will Japan's Trade-War Gamble Pay Off?

Japan's top trade negotiators are on their way to Washington, but both sides are at risk of repeating WWII mistakes. I asked Grok to use game...

Michael Allen

Japan Morning Connection: US Auto Tariffs Shaking Markets but Ex-Date May Lure Buyers Back in Japan

CoreWeave's announcement drives AI sentiment down further. May see renewed interest in Japanese autos today. Expecting Japan to continue rotation...

Andrew Jackson

Unloved Japan Roundup: Don't Panic Ahead of Q3 Results Rush

Over 40 potential turnaround stocks set to report Q3 results with a 45% spread in estimates, some companies like Rohm and JFE look promising while...

Michael Allen

2024 Was Ugly for Turnarounds, 2025 Should Be Awesome!

2025 could be a banner year for turnarounds and value stocks as a spate of recent TOBs, MBOs and merger discussions have suddenly made it unsafe to...

Michael Allen

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Toyota's Q2 Is a Huge Miss; EV Strategy in Flux

Toyota saw a huge miss in Q2 and admits they're revamping their EV plans. This may seem negative, but it's a huge positive ahead of a recovering...

SC Capital

Will Japan's Trade-War Gamble Pay Off?

​Japan's top trade negotiators are on their way to Washington, but both sides are at risk of repeating WWII mistakes. I asked Grok to use game...

Michael Allen

Japan Morning Connection: US Auto Tariffs Shaking Markets but Ex-Date May Lure Buyers Back in Japan

​CoreWeave's announcement drives AI sentiment down further. May see renewed interest in Japanese autos today. Expecting Japan to continue rotation...

Andrew Jackson

Unloved Japan Roundup: Don't Panic Ahead of Q3 Results Rush

​Over 40 potential turnaround stocks set to report Q3 results with a 45% spread in estimates, some companies like Rohm and JFE look promising while...

Michael Allen

2024 Was Ugly for Turnarounds, 2025 Should Be Awesome!

2025 could be a banner year for turnarounds and value stocks as a spate of recent TOBs, MBOs and merger discussions have suddenly made it unsafe to...

Michael Allen

Japan's top trade negotiators are on their way to Washington, but both sides are at risk of repeating WWII mistakes. I asked Grok to use game...

CoreWeave's announcement drives AI sentiment down further. May see renewed interest in Japanese autos today. Expecting Japan to continue rotation...

Over 40 potential turnaround stocks set to report Q3 results with a 45% spread in estimates, some companies like Rohm and JFE look promising while...