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 share price is at the top of its trading range, but management sees YoY sales and profit growth dropping to single digits this quarter.</li>
<li>On a QoQ basis, guidance is for double-digit declines, but that is partly seasonal.</li>
<li>The shares have been in a trading range for almost two years. As interest rates rise, economies slow and the semiconductor down-cycle continues, watch out.</li>
</ul>


The share price is at the top of its trading range, but management sees YoY sales and profit growth dropping to single digits this quarter.
On a QoQ basis, guidance is for double-digit declines, but that is partly seasonal.
The shares have been in a trading range for almost two years. As interest rates rise, economies slow and the semiconductor down-cycle continues, watch out.


Disco (6146 JP): Not Immune to a Downturn

<ul>
<li>After beating guidance every quarter last fiscal year, Disco fell short in the three months to June.</li>
<li>Management is guiding for the usual seasonal rebound in 2Q, but year-on-year growth rates are forecast to drop sharply - most likely on their way to negative territory in 2H.</li>
<li>Disco has stopped disclosing orders data, reducing visibility for investors. 2Q results are likely to be the next catalyst. We see no reason to jump in now.</li>
</ul>


After beating guidance every quarter last fiscal year, Disco fell short in the three months to June.
Management is guiding for the usual seasonal rebound in 2Q, but year-on-year growth rates are forecast to drop sharply - most likely on their way to negative territory in 2H.
Disco has stopped disclosing orders data, reducing visibility for investors. 2Q results are likely to be the next catalyst. We see no reason to jump in now.


Disco (6146 JP): YoY Growth Headed Toward Zero

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/advantest-corp" target="_blank" data-smartkarma-citation="entities:18107:1" rel="noopener">Advantest Corp (6857 JP)</a> yesterday announced Q1 results, with Revenues/OP/NP at record levels, a H1 div hike of 30%, guidance well ahead of consensus, and a buyback.  </li>
<li>They also announced a Mid-Term Plan revision which shows forward guidance better than consensus. </li>
<li>The buyback is smaller than the last one BUT float is not what you think it is. Understanding float dynamics here is key.</li>
</ul>



Advantest Corp (6857 JP) yesterday announced Q1 results, with Revenues/OP/NP at record levels, a H1 div hike of 30%, guidance well ahead of consensus, and a buyback.  
They also announced a Mid-Term Plan revision which shows forward guidance better than consensus. 
The buyback is smaller than the last one BUT float is not what you think it is. Understanding float dynamics here is key.


Advantest (6857) - Strong SoC Sales, Record Profits, Bullish Guidance, and a Buyback (+ Index Flow)

<ul>
<li>FY Mar-22 sales and profits exceeded guidance, as expected. New orders declined slightly in 4Q but remained above sales.</li>
<li>Unfortunately, Disco has decided to stop disclosing orders and the order backlog. A cynic would say this signals the peak of the cycle. </li>
<li>1Q guidance looks conservative. That should be no surprise and no catalyst for the stock price. Shipments of blade dicers are forecast to decline by 10%. Beware. </li>
</ul>


FY Mar-22 sales and profits exceeded guidance, as expected. New orders declined slightly in 4Q but remained above sales.
Unfortunately, Disco has decided to stop disclosing orders and the order backlog. A cynic would say this signals the peak of the cycle. 
1Q guidance looks conservative. That should be no surprise and no catalyst for the stock price. Shipments of blade dicers are forecast to decline by 10%. Beware. 


Disco (6146 JP): Orders Peaking, Blade Dicer Shipments Forecast to Decline

<ul>
<li>3Q results were above guidance, as expected. Full-year guidance looks conservative, as usual. New orders ahead of sales, pointing to one or two good quarters ahead. </li>
<li>Shares down 10% since the beginning of January. Valuation reasonable but not compelling given the risk of a cyclical peak in SPE demand this year.</li>
<li>Uncertainty likely to keep the shares in a trading range.</li>
</ul>


3Q results were above guidance, as expected. Full-year guidance looks conservative, as usual. New orders ahead of sales, pointing to one or two good quarters ahead. 
Shares down 10% since the beginning of January. Valuation reasonable but not compelling given the risk of a cyclical peak in SPE demand this year.
Uncertainty likely to keep the shares in a trading range.


Disco (6146 JP): Valuation Reasonable but Not Compelling

Japan

DISCO CORPORATION manufactures abrasive and precision industrial machinery for cutting and grinding purposes.  The Company's products are applied in the semiconductor, electronics, and construction industries to produce consumer goods such as personal computers, digital cameras, video game systems, and Digital Video Disc (DVD) players.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

DISCO Corp (6146 JP)

Disco (6146 JP): Not Immune to a Downturn

Sales of dicing blades and other consumables have supported sales and profits, but growth rates continue to fall. Shares in a trading range for...

Scott Foster

Disco (6146 JP): YoY Growth Headed Toward Zero

Results fell short of guidance in 1Q and YoY growth rates are forecast to drop in 2Q, probably on their way to zero. Orders data no longer...

Scott Foster

Advantest (6857) - Strong SoC Sales, Record Profits, Bullish Guidance, and a Buyback (+ Index Flow)

Advantest runs a blowout Q1, announces guidance ahead of consensus, revises its MTP to be more bullish, raises divs and announces a buyback. The...

Travis Lundy

Disco (6146 JP): Orders Peaking, Blade Dicer Shipments Forecast to Decline

4Q results were above guidance and 1Q guidance looks conservative, but shipments of blade dicers are forecast to drop 10% in 1Q and consumables to...

Scott Foster

Disco (6146 JP): Valuation Reasonable but Not Compelling

3Q results ahead of guidance and FY guidance looks conservative, but this should have been expected. Valuation reasonable but not compelling due to...

Scott Foster

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)