Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Alphabet revealed plans to spend aggressively on AI computing capacity, a positive for semi-caps and Japan’s SPE firms.</li>
<li>A mild negative for Harmonic Drive after Musk flagged that scaling Optimus production will be tough to scale.</li>
<li>News that SK Hynix is being considered as a partner to run Intel's Ohio campus is a positive for SPE names in Intel's supply chain and memory-related names.</li>
</ul>


Alphabet revealed plans to spend aggressively on AI computing capacity, a positive for semi-caps and Japan’s SPE firms.
A mild negative for Harmonic Drive after Musk flagged that scaling Optimus production will be tough to scale.
News that SK Hynix is being considered as a partner to run Intel's Ohio campus is a positive for SPE names in Intel's supply chain and memory-related names.


Japan Morning Connection: Intel Supply Chain in Focus as SK Hynix Eyed for Ohio Campus Role

<ul>
<li>Can expect more from the likes of Rakus Co Ltd, Shift Inc, NEC Corp and Fujitsu Ltd which all traded well yesterday on the rotation away from frontline AI plays.</li>
<li>It would make sense to see interest in physical AI FA plays such as Yaskawa Electric, Mitsubishi Electric, Keyence Corp and Fanuc Corp as alternative exposure to the AI theme.</li>
<li>The power semis such as Fuji Electric, ROHM Co Ltd and Renesas Electronics should hold up after a strong day for the sector in the US.</li>
</ul>


Can expect more from the likes of Rakus Co Ltd, Shift Inc, NEC Corp and Fujitsu Ltd which all traded well yesterday on the rotation away from frontline AI plays.
It would make sense to see interest in physical AI FA plays such as Yaskawa Electric, Mitsubishi Electric, Keyence Corp and Fanuc Corp as alternative exposure to the AI theme.
The power semis such as Fuji Electric, ROHM Co Ltd and Renesas Electronics should hold up after a strong day for the sector in the US.


Japan Morning Connection: Physical AI FA Plays May Draw Fresh Interest as Alternative AI Exposure

<ul>
<li>SOX up ~80% this quarter, one of its biggest ever gains, making quarter-end profit-taking a real risk for high-flying AI names over the next two sessions.</li>
<li>Rohm, Fuji Elec, Renesas and Sanken likely to open weak after Onsemi -24% taken as a warning that there isn’t much upside for power/industrial makers in the DC arena.</li>
<li>European heatwave puts Daikin, Mitsubishi Electric and Panasonic A/C names in focus as a potential distraction from AI volatility into quarter end.</li>
</ul>


SOX up ~80% this quarter, one of its biggest ever gains, making quarter-end profit-taking a real risk for high-flying AI names over the next two sessions.
Rohm, Fuji Elec, Renesas and Sanken likely to open weak after Onsemi -24% taken as a warning that there isn’t much upside for power/industrial makers in the DC arena.
European heatwave puts Daikin, Mitsubishi Electric and Panasonic A/C names in focus as a potential distraction from AI volatility into quarter end.


Japan Morning Connection: AI Names Increasingly Volatile with SOX Reversal and Quarter-End Pressure

<ul>
<li>Ibiden -27% since start of month but set to recover as Intel wins Google TPU deal. TEL, Lasertec, Screen and TOK also set for a stronger session.</li>
<li>Fujikura and peers should be helped by Corning's multi-billion dollar Amazon optical fiber deal.</li>
<li>Softbank -23% since start of month looking attractive as OpenAI formally announces IPO plans.</li>
</ul>


Ibiden -27% since start of month but set to recover as Intel wins Google TPU deal. TEL, Lasertec, Screen and TOK also set for a stronger session.
Fujikura and peers should be helped by Corning's multi-billion dollar Amazon optical fiber deal.
Softbank -23% since start of month looking attractive as OpenAI formally announces IPO plans.


Japan Morning Connection: Ibiden Set to Recover as Intel Wins Google TPU Deal

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toho-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:11546:1" rel="noopener">Toho Holdings (8129 JP)</a> has made a non-binding proposal to take <a href="https://www.smartkarma.com/entities/phc-holdings-corp" target="_blank" data-smartkarma-citation="entities:34198:1" rel="noopener">PHC Holdings (6523 JP)</a> private at a rumoured valuation of more than JPY200bn, implying JPY1,571 per share.</li>
<li>KKR and other large holders want an exit, but the rumoured offer is below the last close (JPY1,684) and my fair value range of JPY1,800–2,030.</li>
<li>The deal fits Toho's diversification strategy, but funding, 3D Investment Partners' 24% stake in Toho, and potential competition from domestic funds make completion challenging.</li>
</ul>



Toho Holdings (8129 JP) has made a non-binding proposal to take PHC Holdings (6523 JP) private at a rumoured valuation of more than JPY200bn, implying JPY1,571 per share.
KKR and other large holders want an exit, but the rumoured offer is below the last close (JPY1,684) and my fair value range of JPY1,800–2,030.
The deal fits Toho's diversification strategy, but funding, 3D Investment Partners' 24% stake in Toho, and potential competition from domestic funds make completion challenging.


PHC Holdings (6523 JP): Willing Sellers, but Not at Toho's Rumoured Price

Japan

Panasonic Corporation manufactures electric and electronic products. The Company produces home appliances, car navigation systems, digital devices, computer peripherals, telecommunications, industrial equipment, and electronic parts. Panasonic has associated companies around the world.

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Panasonic Corp (6752 JP)

Japan Morning Connection: Intel Supply Chain in Focus as SK Hynix Eyed for Ohio Campus Role

News that SK Hynix is being considered as a partner to run Intel's Ohio campus is a positive for SPE names in Intel's supply chain and memory...

Andrew Jackson

Japan Morning Connection: Physical AI FA Plays May Draw Fresh Interest as Alternative AI Exposure

Expect a continuation of the shift away from frontline AI plays. Interest in physical AI FA plays may see an increase as alternative exposure to...

Andrew Jackson

Japan Morning Connection: AI Names Increasingly Volatile with SOX Reversal and Quarter-End Pressure

Japanese AI and semi names face a rocky quarter end with power/industrial stocks, memory names and Softbank all under pressure, while A/C names may...

Andrew Jackson

Japan Morning Connection: Ibiden Set to Recover as Intel Wins Google TPU Deal

Intel's Google TPU win may lift Ibiden, while Corning's Amazon deal may help Fujikura recover. Panasonic could see a lift on AI infrastructure plans.

Andrew Jackson

PHC Holdings (6523 JP): Willing Sellers, but Not at Toho's Rumoured Price

Toho's rumoured bid of more than JPY200bn (JPY1,571 per share) for PHC is below my estimated fair value of JPY1,800–2,030. Sellers want out, but...

Arun George

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