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

<ul>
<li>The outlook for factory automation is improving with inventory clearance, the upturn in the semiconductor industry and an AI-enhanced response to the labor shortage.</li>
<li>Yaskawa's margins should continue to rise with renewed growth in Robotics, efficiency gains and an upgraded product line. </li>
<li>Valuation stretched at 30x EPS guidance for FY Feb-25, but current weakness looks like a long term buying opportunity.</li>
</ul>


The outlook for factory automation is improving with inventory clearance, the upturn in the semiconductor industry and an AI-enhanced response to the labor shortage.
Yaskawa's margins should continue to rise with renewed growth in Robotics, efficiency gains and an upgraded product line. 
Valuation stretched at 30x EPS guidance for FY Feb-25, but current weakness looks like a long term buying opportunity.


Yaskawa (6506 JP): Start of a New Factory Automation Growth Cycle

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<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>Rigaku worth watching as a play on the shift to 2D and more complex transistors requiring X-ray/metrology capabilities.</li>
<li>Photonics names QD Laser, Seiko Giken, Santec and Samco back on the menu for believers in co-packaged optics and photonic-driven AI scale-up.</li>
<li>Japanese space names finally looking more attractive after &gt;50% corrections from recent highs.</li>
</ul>


Rigaku worth watching as a play on the shift to 2D and more complex transistors requiring X-ray/metrology capabilities.
Photonics names QD Laser, Seiko Giken, Santec and Samco back on the menu for believers in co-packaged optics and photonic-driven AI scale-up.
Japanese space names finally looking more attractive after &gt;50% corrections from recent highs.


Japan Morning Connection: Broadening AI Rally Should Increase Photonics and Glass Substrate Focus

<ul>
<li>Kokusai +25% last week and JX Metals +25.6% likely reversal targets at the open.</li>
<li>TeraDrone is pivoting from industrial drones to defense after consolidating two Ukrainian combat drone companies, an interesting thematic to get behind.</li>
<li>Astroscale continued to drop -8.6% yesterday after its earnings showed increasing losses but still an interesting name given its focus on space-junk removal and orbital services.</li>
</ul>


Kokusai +25% last week and JX Metals +25.6% likely reversal targets at the open.
TeraDrone is pivoting from industrial drones to defense after consolidating two Ukrainian combat drone companies, an interesting thematic to get behind.
Astroscale continued to drop -8.6% yesterday after its earnings showed increasing losses but still an interesting name given its focus on space-junk removal and orbital services.


Japan Morning Connection: AI Related Names Set to Slide Following SOX's Skittish Retreat from Highs

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

<ul>
<li>The worst performers in Topix in any given year almost always outperform the following year. This strategy works on steroids during market drawdowns such as the one we are in.</li>
<li>The year to March 26 was a great example. Topix was up 15% YoY, but last year's worst decile turned out an average gain of 46%!</li>
<li>If you want to do even better than the basket, focus on stocks where you think the long-term sustainable relative RoE is higher than the relative price to book ratio.</li>
</ul>


The worst performers in Topix in any given year almost always outperform the following year. This strategy works on steroids during market drawdowns such as the one we are in.
The year to March 26 was a great example. Topix was up 15% YoY, but last year's worst decile turned out an average gain of 46%!
If you want to do even better than the basket, focus on stocks where you think the long-term sustainable relative RoE is higher than the relative price to book ratio.


Juicing the Turnaround Strategy in War Time

Japan

YASKAWA Electric Corporation manufactures and markets servomotors, controllers, inverters, and industrial robots.  The Company's products include spindle controllers, computerized numerical control (CNC) systems, and system engineering.

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Yaskawa Electric (6506 JP)

Yaskawa (6506 JP): Start of a New Factory Automation Growth Cycle

Long-term buy with share price down 10% in the past month as orders bottom out. Robotics looking up with inventory cleared and need for automation...

Scott Foster

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: Broadening AI Rally Should Increase Photonics and Glass Substrate Focus

Japanese SPEs continue to benefit from Korean tailwinds while photonics and glass substrate names should be increasingly back on the menu as...

Andrew Jackson

Juicing the Turnaround Strategy in War Time

Worst Topix performers tend to outperform the following year, especially during market downturns. Focus on stocks with high RoE and low price to...

Michael Allen

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Yaskawa (6506 JP): Start of a New Factory Automation Growth Cycle

Long-term buy with share price down 10% in the past month as orders bottom out. Robotics looking up with inventory cleared and need for automation...

Scott Foster

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: Broadening AI Rally Should Increase Photonics and Glass Substrate Focus

Japanese SPEs continue to benefit from Korean tailwinds while photonics and glass substrate names should be increasingly back on the menu as...

Andrew Jackson

Japan Morning Connection: AI Related Names Set to Slide Following SOX's Skittish Retreat from Highs

AI trade cracks under its own weight but big dips likely buying opportunities. Kokusai and JX Metals likely reversal targets.

Andrew Jackson

Juicing the Turnaround Strategy in War Time

​Worst Topix performers tend to outperform the following year, especially during market downturns. Focus on stocks with high RoE and low price to...

Michael Allen

Worst Topix performers tend to outperform the following year, especially during market downturns. Focus on stocks with high RoE and low price to...