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 company's FY Mar-26 guidance miss has been discounted, but this fiscal year's operating environment may also be more difficult than management thinks.</li>
<li>On balance, however, operating profit and the operating margin should continue to rise due to the rationalization of operations.</li>
<li>At ¥3,341 (May 11 closing price), the shares are selling at 18X  FY Mar-27 EPS guidance. </li>
</ul>


The company's FY Mar-26 guidance miss has been discounted, but this fiscal year's operating environment may also be more difficult than management thinks.
On balance, however, operating profit and the operating margin should continue to rise due to the rationalization of operations.
At ¥3,341 (May 11 closing price), the shares are selling at 18X  FY Mar-27 EPS guidance. 


Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>Japanese AI hardware stocks fell sharply after reports of Meta's compute platform fuelled overcapacity fears</li>
<li>Markets are rotating from AI infrastructure to AI implementation, favouring enterprise software and system integrators over hardware suppliers</li>
<li>AI implementation firms may benefit over the medium term: BayCurrent, Fujitsu, and SIers.</li>
</ul>


Japanese AI hardware stocks fell sharply after reports of Meta's compute platform fuelled overcapacity fears
Markets are rotating from AI infrastructure to AI implementation, favouring enterprise software and system integrators over hardware suppliers
AI implementation firms may benefit over the medium term: BayCurrent, Fujitsu, and SIers.


Japan Strategy Weekly | from Builders to Users

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

<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>Recent SPE winners Kokusai, Screen and TEL set to open weak but excessive drops may offer an opportunity to add.</li>
<li>A positive for Softbank if the potentially less competitive marketplace for frontier models is seen as positive for OpenAI.</li>
<li>Fujitsu and NEC may offer a safe haven after strong overnight moves for software names following Guggenheim upgrades.</li>
</ul>


Recent SPE winners Kokusai, Screen and TEL set to open weak but excessive drops may offer an opportunity to add.
A positive for Softbank if the potentially less competitive marketplace for frontier models is seen as positive for OpenAI.
Fujitsu and NEC may offer a safe haven after strong overnight moves for software names following Guggenheim upgrades.


Japan Morning Connection: SPEs Face Pullback as Meta Enters Cloud Infrastructure

<ul>
<li>Softbank claims Toyota's crown as Japan's largest company as ARM +15.7% on NVDA's PC superchip announcement.</li>
<li>QD Laser and TDK announce RGB laser partnership for building mass-production capability for smart-glasses hardware.</li>
<li>Space names facing heavy profit taking again despite Astroscale -14.2%, QPS -13.9% and Axelspace -10.6% yesterday.</li>
</ul>


Softbank claims Toyota's crown as Japan's largest company as ARM +15.7% on NVDA's PC superchip announcement.
QD Laser and TDK announce RGB laser partnership for building mass-production capability for smart-glasses hardware.
Space names facing heavy profit taking again despite Astroscale -14.2%, QPS -13.9% and Axelspace -10.6% yesterday.


Japan Morning Connection: Long AI Short Software Trade Unwinding as Jensen Backs Software

Japan

Fujitsu Ltd manufactures semiconductor, computer, and communication equipment. The Company provides comprehensive information technology, network and telecommunication solutions, and Internet services.

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Fujitsu Ltd (6702 JP)

Fujitsu (6702 JP): Fighting Headwinds

FY Mar-26 guidance miss discounted, while profit growth and margin expansion continue led by AI-enhanced service solutions and rationalization of...

Scott Foster

Japan Strategy Weekly | from Builders to Users

Japanese AI hardware stocks drop as markets shift focus from infrastructure to implementation, benefiting firms like BayCurrent, Fujitsu, and...

Mark Chadwick

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: SPEs Face Pullback as Meta Enters Cloud Infrastructure

Japanese SPEs may give back some recent gains on Meta's cloud move, though dips could offer opportunity. Space and software names may benefit from...

Andrew Jackson

Japan Morning Connection: Long AI Short Software Trade Unwinding as Jensen Backs Software

Software set to surge with Jensen’s narrative that AI agents will consume more software, and that demand for software engineers is set to sharply...

Andrew Jackson

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Fujitsu (6702 JP): Fighting Headwinds

FY Mar-26 guidance miss discounted, while profit growth and margin expansion continue led by AI-enhanced service solutions and rationalization of...

Scott Foster

Japan Strategy Weekly | from Builders to Users

​Japanese AI hardware stocks drop as markets shift focus from infrastructure to implementation, benefiting firms like BayCurrent, Fujitsu, and...

Mark Chadwick

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: SPEs Face Pullback as Meta Enters Cloud Infrastructure

Japanese SPEs may give back some recent gains on Meta's cloud move, though dips could offer opportunity. Space and software names may benefit from...

Andrew Jackson

Japan Morning Connection: Long AI Short Software Trade Unwinding as Jensen Backs Software

Software set to surge with Jensen’s narrative that AI agents will consume more software, and that demand for software engineers is set to sharply...

Andrew Jackson

Japanese AI hardware stocks drop as markets shift focus from infrastructure to implementation, benefiting firms like BayCurrent, Fujitsu, and...