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>Sales and operating profit declined YoY in 1H, but new orders were up 17.5% and the book-to-bill ratio rose from 1.00 to 1.25. anagement has raised full-year guidance.</li>
<li>Aerospace &amp; Defense continue to lead growth, with nuclear energy and Asian EPC making significant contributions to new orders and the restructuring of Industrial Systems &amp; Machinery boosting operating profit.</li>
<li>Share price down 15% in two weeks to 23x FY Mar-26 EPS guidance. Once again a reasonably valued investment in Japan's rising defense budget and corporate restructuring.</li>
</ul>


Sales and operating profit declined YoY in 1H, but new orders were up 17.5% and the book-to-bill ratio rose from 1.00 to 1.25. anagement has raised full-year guidance.
Aerospace &amp; Defense continue to lead growth, with nuclear energy and Asian EPC making significant contributions to new orders and the restructuring of Industrial Systems &amp; Machinery boosting operating profit.
Share price down 15% in two weeks to 23x FY Mar-26 EPS guidance. Once again a reasonably valued investment in Japan's rising defense budget and corporate restructuring.


IHI (7013 JP): Orders and Profits Headed Up, Share Price Down

Director, Head of Research, Smartkarma

Pranav Rao

Director, Head of Research

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<ul>
<li>Welcome to Curator’s Cut — a fortnightly roundup of standout themes from the 1,000+ insights shared on Smartkarma. After a brief one-issue break, we’re back with fresh perspectives.</li>
<li>In this cut, we explore Japan’s renewed defense ambitions, Asia’s eyewear evolution, and US diagnostics' next frontiers.</li>
<li>Want to dig deeper? Comment or message with the themes you’d like to see highlighted next</li>
</ul>


Welcome to Curator’s Cut — a fortnightly roundup of standout themes from the 1,000+ insights shared on Smartkarma. After a brief one-issue break, we’re back with fresh perspectives.
In this cut, we explore Japan’s renewed defense ambitions, Asia’s eyewear evolution, and US diagnostics' next frontiers.
Want to dig deeper? Comment or message with the themes you’d like to see highlighted next


Curator's Cut: Japan's Defense Drive, Asia's Vision Opportunities & US Diagnostics Picks

<ul>
<li>New Japanese Prime Minister Sanae Takaichi aims to raise defense spending to 2% of GDP this fiscal year, two years ahead of the original schedule.</li>
<li>Takaichi also wants to accelerate investment in advanced defense technologies. IHI, which recently signed an agreement with ICEYE to build earth observations satellites, should be among the beneficiaries.</li>
<li>IHI's sales and profit comparisons should turn positive during FY Mar-26. A 7-for-1 stock split effective October 1, 2025, makes the shares more attractive to retail investors. </li>
</ul>


New Japanese Prime Minister Sanae Takaichi aims to raise defense spending to 2% of GDP this fiscal year, two years ahead of the original schedule.
Takaichi also wants to accelerate investment in advanced defense technologies. IHI, which recently signed an agreement with ICEYE to build earth observations satellites, should be among the beneficiaries.
IHI's sales and profit comparisons should turn positive during FY Mar-26. A 7-for-1 stock split effective October 1, 2025, makes the shares more attractive to retail investors. 


IHI (7013 JP): SAR Satellite Deal Adds to Takaichi Trade

Global Materials | Industrials | Commodities

Rahul Jain

<ul>
<li>Q1 FY2026 results showed weak earnings (net profit –38% YoY) but a strong +29% YoY orderbook driven by Aero &amp; Carbon Solutions.</li>
<li>Management retained FY2026 guidance, banking on aero aftermarket growth and disposal gains to drive a backloaded recovery.</li>
<li>Valuations (~14× EV/EBITDA, 24× P/E) look reasonable versus peers, but execution risks remain if disposals or aero demand underdeliver.</li>
</ul>


Q1 FY2026 results showed weak earnings (net profit –38% YoY) but a strong +29% YoY orderbook driven by Aero &amp; Carbon Solutions.
Management retained FY2026 guidance, banking on aero aftermarket growth and disposal gains to drive a backloaded recovery.
Valuations (~14× EV/EBITDA, 24× P/E) look reasonable versus peers, but execution risks remain if disposals or aero demand underdeliver.


IHI Corporation (7013 JP) – Strong Orders, Weak Profits; Guidance Backloaded on Aero & Disposals

<ul>
<li>Sharp turnaround from FY22–FY24, with revenue rising from ¥1.17 tn to ¥1.63 tn and operating profit swinging from losses to ¥143.5 bn, led by civil aero engines and defense.</li>
<li>The order backlog has grown to ¥1.6 tn (↑¥226 bn YoY), underpinned by defense orders and aftermarket demand, with management guiding continued top-line and margin expansion.</li>
<li> EPS is forecast to grow at a ~7% CAGR through FY27; at ~18x FY27E P/E and ~9x EV/EBITDA, valuations appear reasonable for a capital-efficient aero-led compounder.</li>
</ul>


Sharp turnaround from FY22–FY24, with revenue rising from ¥1.17 tn to ¥1.63 tn and operating profit swinging from losses to ¥143.5 bn, led by civil aero engines and defense.
The order backlog has grown to ¥1.6 tn (↑¥226 bn YoY), underpinned by defense orders and aftermarket demand, with management guiding continued top-line and margin expansion.
 EPS is forecast to grow at a ~7% CAGR through FY27; at ~18x FY27E P/E and ~9x EV/EBITDA, valuations appear reasonable for a capital-efficient aero-led compounder.


IHI Corporation (TSE:7013) – Rebound in Aero Drives Multi-Year Upside

Japan

IHI Corporation manufactures heavy machinery. The Company produces aircraft jet engines, rocket propulsion systems, and ships for military and commercial use. Ishikawajima-Harima also constructs petroleum refineries and nuclear power plants.

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

IHI Corp (7013 JP)

Curator's Cut: Japan's Defense Drive, Asia's Vision Opportunities & US Diagnostics Picks

Curator's Cut highlights Japan's defense ambitions, Asia's eyewear evolution, and US diagnostics' advancements. Share your thoughts on future...

Pranav Rao

IHI (7013 JP): SAR Satellite Deal Adds to Takaichi Trade

Japanese defense spending should rise more rapidly under PM Takaichi. That plus a satellite deal with ICEYE should provide new impetus for IHI,...

Scott Foster

IHI Corporation (7013 JP) – Strong Orders, Weak Profits; Guidance Backloaded on Aero & Disposals

IHI accelerates its pivot with a 24-satellite ICEYE constellation (2026–29 rollout) and a 0.4 Mtpa green-ammonia JV in India (2029–30 start)....

Rahul Jain

IHI Corporation (TSE:7013) – Rebound in Aero Drives Multi-Year Upside

Strong revenue and profit growth expected for aerospace company, driven by civil aero engines and defense orders, with promising outlook for...

Rahul Jain

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

IHI (7013 JP): Orders and Profits Headed Up, Share Price Down

Down 15% in the recent market sell-off, IHI is again an attractive play on Japan's rising defense spending and the company's own restructuring....

Scott Foster

Curator's Cut: Japan's Defense Drive, Asia's Vision Opportunities & US Diagnostics Picks

​Curator's Cut highlights Japan's defense ambitions, Asia's eyewear evolution, and US diagnostics' advancements. Share your thoughts on future...

Pranav Rao

IHI (7013 JP): SAR Satellite Deal Adds to Takaichi Trade

Japanese defense spending should rise more rapidly under PM Takaichi. That plus a satellite deal with ICEYE should provide new impetus for IHI,...

Scott Foster

IHI Corporation (7013 JP) – Strong Orders, Weak Profits; Guidance Backloaded on Aero & Disposals

IHI accelerates its pivot with a 24-satellite ICEYE constellation (2026–29 rollout) and a 0.4 Mtpa green-ammonia JV in India (2029–30 start)....

Rahul Jain

IHI Corporation (TSE:7013) – Rebound in Aero Drives Multi-Year Upside

​Strong revenue and profit growth expected for aerospace company, driven by civil aero engines and defense orders, with promising outlook for...

Rahul Jain

Curator's Cut highlights Japan's defense ambitions, Asia's eyewear evolution, and US diagnostics' advancements. Share your thoughts on future...

Strong revenue and profit growth expected for aerospace company, driven by civil aero engines and defense orders, with promising outlook for...