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>We spoke to Yaskawa today to understand recent trends and the detailed outlook on demand going forward. </li>
<li>There were no major surprises with the company still relatively positive on demand remaining strong across the board though only robots seem to offer strong growth potential. </li>
<li>Profitability for robots should also improve going forward creating a nice story, but valuations are still too dear.</li>
</ul>


We spoke to Yaskawa today to understand recent trends and the detailed outlook on demand going forward. 
There were no major surprises with the company still relatively positive on demand remaining strong across the board though only robots seem to offer strong growth potential. 
Profitability for robots should also improve going forward creating a nice story, but valuations are still too dear.


Yaskawa – Increasingly Positive on Robotics but Still Too Early… Except…

<ul>
<li>Yaskawa’s stock has been broadly flattish since the beginning of 2021 despite an accelerating earnings profile. </li>
<li>This is largely due to valuations remaining elevated at over 20x EV/EBIT. </li>
<li>Thus, while we continue to favour the name vs. FA peers we remain cautious.</li>
</ul>


Yaskawa’s stock has been broadly flattish since the beginning of 2021 despite an accelerating earnings profile. 
This is largely due to valuations remaining elevated at over 20x EV/EBIT. 
Thus, while we continue to favour the name vs. FA peers we remain cautious.


Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>It has been an interesting year and short interest has varied a lot across countries, sectors and stocks. We look at changes in Hong Kong, Japan, Korea and Taiwan.</li>
<li>Shorts have soared in Korea following the resumption of short selling, while short interest has increased in the other countries too.</li>
<li>Ping An Insurance and BYD had the biggest short covering, while China Merchants Bank saw the largest increase in shorts over the year.</li>
</ul>


It has been an interesting year and short interest has varied a lot across countries, sectors and stocks. We look at changes in Hong Kong, Japan, Korea and Taiwan.
Shorts have soared in Korea following the resumption of short selling, while short interest has increased in the other countries too.
Ping An Insurance and BYD had the biggest short covering, while China Merchants Bank saw the largest increase in shorts over the year.


<p>On Friday we warned that Fanuc might come through with a surprise downgrade as a result of weakness in its Robomachine division. We said that FA and Robot sales were likely flattish QoQ (-0.8% QoQ and +6.1% QoQ respectively) but that the Robomachine division could see sales collapse to about ¥28bn from ¥53.2bn in the last quarter. They did, falling to ¥27.8bn. What remains to be seen is how far ahead of the clueless and oblivious sellside (which projected a 1.6% QoQ rise in sales) the market was. For now though…</p><p><iframe src="//www.youtube.com/embed/gbGfhT1yehw" width="640" height="360"></iframe></p>

On Friday we warned that Fanuc might come through with a surprise downgrade as a result of weakness in its Robomachine division. We said that FA and Robot sales were likely flattish QoQ (-0.8% QoQ and +6.1% QoQ respectively) but that the Robomachine division could see sales collapse to about ¥28bn from ¥53.2bn in the last quarter. They did, falling to ¥27.8bn. What remains to be seen is how far ahead of the clueless and oblivious sellside (which projected a 1.6% QoQ rise in sales) the market was. For now though…

<p>The FA sector has enjoyed a few strong quarters as COVID helped kickstart an earnings upcycle that was about due regardless. Despite this, stock prices have been flattish or weak for most names this year excluding the invincible Keyence. While peer Yaskawa upgraded its earnings guidance when it reported we have some concerns about Fanuc.</p>

The FA sector has enjoyed a few strong quarters as COVID helped kickstart an earnings upcycle that was about due regardless. Despite this, stock prices have been flattish or weak for most names this year excluding the invincible Keyence. While peer Yaskawa upgraded its earnings guidance when it reported we have some concerns about Fanuc.

Fanuc – Could There Be a Shock Downgrade?

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 – Increasingly Positive on Robotics but Still Too Early… Except…

Yaskawa's Robotics segment offers intriguing growth potential but we remain concerned about a tech capex peak out. However, as a long hedge the...

Mio Kato

Yaskawa – Peak Out in Sight

Yaskawa’s stock has been flattish since 2021 despite accelerating earnings due to valuations remaining elevated at over 20x EV/EBIT and while we...

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Asia: The Year in Shorts

There have been large increases and decreases in short interest on stocks across HK, Japan, Korea and Taiwan over the year. We look at the biggest...

Brian Freitas

Fanuc – Whoomp! There It Is

On Friday we warned that Fanuc might come through with a surprise downgrade as a result of weakness in its Robomachine division. They did.

Mio Kato

Fanuc – Could There Be a Shock Downgrade?

The FA sector has enjoyed a few strong quarters as COVID helped kickstart an earnings upcycle but while peer Yaskawa upgraded its earnings guidance...

Mio Kato

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