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

Reports from South Korea's Electronic Times that Apple would be switching to OLED for all of its 2019 models has pummelled LCD supply chain names, with JDI down as much as 16%. This looks like a severe overreaction to us without any real confirmation from sources with a good track record of predicting Apple's moves. While we are uncertain about the veracity of the reports, there are a number of factors which make a full switch to OLED for 2019 seem unlikely to us. We discussed the report briefly…

Reports from South Korea's Electronic Times that Apple would be switching to OLED for all of its 2019 models has pummelled LCD supply chain names, with JDI down as much as 16%. This looks like a severe overreaction to us without any real confirmation from sources with a good track record of predicting Apple's moves. While we are uncertain about the veracity of the reports, there are a number of factors which make a full switch to OLED for 2019 seem unlikely to us. We discussed the report briefly…

JDI: Report of Full Switch to OLED by Apple in 2019 Hits Suppliers, JDI Down 16%

Following earnings, consensus OP estimates for JDI have moved up from JPY2.5bn to JPY13.0bn. Despite this, the stock price has languished, down 2.74% despite the company guiding for revenue to grow 10-20% YoY and for OPM to hit 2-3% implying revenue of JPY789bn-861bn (consensus of JPY788bn) and OP of JPY15.8-25.8bn for FY03/19. Based on discussions with the company and investors we believe that most investors consider the company's guidance to be logical but are waiting to assess the true extent…

Following earnings, consensus OP estimates for JDI have moved up from JPY2.5bn to JPY13.0bn. Despite this, the stock price has languished, down 2.74% despite the company guiding for revenue to grow 10-20% YoY and for OPM to hit 2-3% implying revenue of JPY789bn-861bn (consensus of JPY788bn) and OP of JPY15.8-25.8bn for FY03/19. Based on discussions with the company and investors we believe that most investors consider the company's guidance to be logical but are waiting to assess the true extent…

JDI: Investors Waiting for Confirmation of Cost Structure Improvement

<a href="https://www.smartkarma.com/entities/8280" target="_blank" data-smartkarma-citation="entities:8280:1">Japan Display Inc (6740 JP)</a> reported 4Q earnings yesterday finally announcing the results of its large restructuring efforts.On the operational side, gross margins (-0.0%) were significantly worse than we expected (2.9%) due to non-depreciation costs such as inventory impacts being worse than we expected. Revenue (JPY152bn) was shy of our estimates (JPY157bn) but above consensus (JPY139bn). The culprit was once again sales to Chinese customers as sales to Apple and non-mobile outperformed our…

Japan Display Inc (6740 JP) reported 4Q earnings yesterday finally announcing the results of its large restructuring efforts.On the operational side, gross margins (-0.0%) were significantly worse than we expected (2.9%) due to non-depreciation costs such as inventory impacts being worse than we expected. Revenue (JPY152bn) was shy of our estimates (JPY157bn) but above consensus (JPY139bn). The culprit was once again sales to Chinese customers as sales to Apple and non-mobile outperformed our…

JDI: Long Awaited Big Bath Is Here, Now What?

JDI <a href="http://www.j-display.com/english/news/2018/20180510.html" target="_blank">announced that it had developed a high resolution screen for VR application</a>s. Apple's famed retina spec, which is the pixel density at which individual pixels are indistinguishable to the human eye, implies that a 326ppi pixel density at a 25cm viewing distance makes pixels indistinguishable. Using the same concept, JDI's new display would ensure that pixels are indistinguishable at distances of about 7.3cms. Assuming a viewing distance of about 10cms for the typical VR unit, this would…

JDI announced that it had developed a high resolution screen for VR applications. Apple's famed retina spec, which is the pixel density at which individual pixels are indistinguishable to the human eye, implies that a 326ppi pixel density at a 25cm viewing distance makes pixels indistinguishable. Using the same concept, JDI's new display would ensure that pixels are indistinguishable at distances of about 7.3cms. Assuming a viewing distance of about 10cms for the typical VR unit, this would…

JDI: VR Screen Commercialisation Progressing

Equity Capital Markets

JDI is currently trading about 19% below the level it was at prior to announcing its 3rd party allotment, underperforming Topix by over 20%. With a few hours remaining to determine the pricing on the 3rd party allotment it appears as though VWAP for the period 5-9 Apr will be something in the region of JPY157.5. A further 10% discount on top of this would imply pricing of about JPY142, barely above the all time low set in 3Q 2016.The <a href="http://www.jpx.co.jp/english/regulation/ensuring/listing/equity-finance/" target="_blank">TSE has articulated some principles for equity financing</a> sayin…

JDI is currently trading about 19% below the level it was at prior to announcing its 3rd party allotment, underperforming Topix by over 20%. With a few hours remaining to determine the pricing on the 3rd party allotment it appears as though VWAP for the period 5-9 Apr will be something in the region of JPY157.5. A further 10% discount on top of this would imply pricing of about JPY142, barely above the all time low set in 3Q 2016.The TSE has articulated some principles for equity financing sayin…

JDI: The TSE's Principles on Equity Financing

Japan

Japan Display Inc. manufactures small and medium sized displays.  The Company was formed through the integration of Sony Mobile Display, Toshiba Mobile Display and Hitachi Displays. Japan Display operates its business worldwide.

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Japan Display (6740 JP)

JDI: Report of Full Switch to OLED by Apple in 2019 Hits Suppliers, JDI Down 16%

Reports from South Korea's Electronic Times that Apple would be switching to OLED for all of its 2019 models has pummelled LCD supply chain names,...

Mio Kato

JDI: Investors Waiting for Confirmation of Cost Structure Improvement

Following earnings, consensus OP estimates for JDI have moved up from JPY2.5bn to JPY13.0bn. Despite this, the stock price has languished, down...

Mio Kato

JDI: Long Awaited Big Bath Is Here, Now What?

Japan Display Inc (6740 JP) reported 4Q earnings yesterday finally announcing the results of its large restructuring efforts.On the operational...

Mio Kato

JDI: VR Screen Commercialisation Progressing

JDI announced that it had developed a high resolution screen for VR applications. Apple's famed retina spec, which is the pixel density at which...

Mio Kato

JDI: The TSE's Principles on Equity Financing

JDI is currently trading about 19% below the level it was at prior to announcing its 3rd party allotment, underperforming Topix by over 20%. With a...

Mio Kato

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