Materials| Industrials |Commodities

Rahul Jain

Equity Bottom-Up

Kawasaki Heavy Industries / Equity Bottom-Up

<ul>
<li>Past Performance: KHI has rebounded from FY21 losses to record-high revenues and profits in FY25, driven by aerospace recovery and energy systems strength.</li>
<li>Future Growth: Orderbook visibility of ~¥3 trillion supports 5–6% annual growth, led by hydrogen, commercial engines, and automation.</li>
<li>Valuations: At 7.6x EV/EBITDA and 14x PE (NTM), KHI trades at a discount to peers like MHI and Komatsu, reflecting lower ROE and execution risk on long-cycle capex bets.</li>
</ul>


Past Performance: KHI has rebounded from FY21 losses to record-high revenues and profits in FY25, driven by aerospace recovery and energy systems strength.
Future Growth: Orderbook visibility of ~¥3 trillion supports 5–6% annual growth, led by hydrogen, commercial engines, and automation.
Valuations: At 7.6x EV/EBITDA and 14x PE (NTM), KHI trades at a discount to peers like MHI and Komatsu, reflecting lower ROE and execution risk on long-cycle capex bets.


Kawasaki Heavy (7012 JP): Recovery Done, Eyes on Hydrogen, Aerospace, and Margin Upside

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

Kawasaki Heavy Industries / Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kawasaki-heavy-industries" target="_blank" data-smartkarma-citation="entities:8790:1" rel="noopener">Kawasaki Heavy Industries (7012 JP)</a> stock price has moved higher over the last few months, and the increased market cap should result in global index inclusion in August.</li>
<li>
<a href="https://www.smartkarma.com/entities/kawasaki-heavy-industries" target="_blank" data-smartkarma-citation="entities:8790:1" rel="noopener">Kawasaki Heavy Industries (7012 JP)</a> has underperformed its larger peers, and the stock is trading cheaper than the average of its peers on most metrics. </li>
<li>There will be positioning in the stock that has been built up over the last month and a relative value trade could offer better risk reward here.</li>
</ul>



Kawasaki Heavy Industries (7012 JP) stock price has moved higher over the last few months, and the increased market cap should result in global index inclusion in August.

Kawasaki Heavy Industries (7012 JP) has underperformed its larger peers, and the stock is trading cheaper than the average of its peers on most metrics. 
There will be positioning in the stock that has been built up over the last month and a relative value trade could offer better risk reward here.


Kawasaki Heavy (7012 JP): Cheaper than Peers with Index Inclusion Kicker

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>AI and tech took a backseat, although momentum significantly outperformed value which is likely to be reflected in JP.</li>
<li>Trend Micro may be in focus after analyst pushes cyber security as biggest tech trade this year.</li>
<li>KHI looking to release its own humanoid, but Harmonic joints are out of favor and worth another look after steep decline.</li>
</ul>


AI and tech took a backseat, although momentum significantly outperformed value which is likely to be reflected in JP.
Trend Micro may be in focus after analyst pushes cyber security as biggest tech trade this year.
KHI looking to release its own humanoid, but Harmonic joints are out of favor and worth another look after steep decline.


Japan Morning Connection: Oil Down and Defense up as Trump Rails at Putin and Sends More Patriots

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in margin trading positions of JPX stocks as of Jul 4th. The aggregated net margin trading position is USD17,017m.</li>
<li>We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.</li>
<li>We highlight net margin buy/sell changes in Sanrio, Lasertec, Ntt Data, Ihi, Mitsubishi Heavy Industries, Softbank, Disco, Kawasaki Heavy Industries, Advantest, Mitsubishi Ufj Financial.</li>
</ul>


We analyzed the changes in margin trading positions of JPX stocks as of Jul 4th. The aggregated net margin trading position is USD17,017m.
We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.
We highlight net margin buy/sell changes in Sanrio, Lasertec, Ntt Data, Ihi, Mitsubishi Heavy Industries, Softbank, Disco, Kawasaki Heavy Industries, Advantest, Mitsubishi Ufj Financial.


JPX Margin Trading Weekly (Jul 4th): Sanrio, Lasertec, Ntt Data, Ihi, Mitsubishi Heavy Industries

<ul>
<li>Homebuilders starting to stir, watch Sumitomo Forestry for upside squeeze potential.</li>
<li>Este Lauder continues to climb but JP names still languish as slow to react to changing trends.</li>
<li>Trump's brinkmanship continues as the 9th July tariff deadline looms.</li>
</ul>


Homebuilders starting to stir, watch Sumitomo Forestry for upside squeeze potential.
Este Lauder continues to climb but JP names still languish as slow to react to changing trends.
Trump's brinkmanship continues as the 9th July tariff deadline looms.


Japan Morning Connection: Big Pivot from Momo into Value Should See a Sharp Factor Rotation Today

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.

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IHI Corp (7013 JP)

Kawasaki Heavy (7012 JP): Recovery Done, Eyes on Hydrogen, Aerospace, and Margin Upside

KHI bounces back with record profits in FY25, fueled by aerospace and energy sectors, poised for 5-6% growth driven by hydrogen and automation,...

Rahul Jain

Kawasaki Heavy (7012 JP): Cheaper than Peers with Index Inclusion Kicker

Kawasaki Heavy should be added to a global index in August. The stock has moved higher and trades cheaper than its peers. There is positioning and...

Brian Freitas

Japan Morning Connection: Oil Down and Defense up as Trump Rails at Putin and Sends More Patriots

JP autos look ripe for a squeeze if better than expected tarrif outcome. Musk convinced by his humanoid robots despite setbacks. JP heavies should...

Andrew Jackson

JPX Margin Trading Weekly (Jul 4th): Sanrio, Lasertec, Ntt Data, Ihi, Mitsubishi Heavy Industries

We analyzed JPX margin trading positions report for the past week and highlighted Sanrio (8136 JP), Lasertec (6920 JP), Ntt Data (9613 JP), Ihi...

Ke Yan, CFA, FRM

Japan Morning Connection: Big Pivot from Momo into Value Should See a Sharp Factor Rotation Today

Homebuilders show potential for upside as market rotates; watch big momentum winners for downside. Este Lauder climbs while JP names lag behind.

Andrew Jackson

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Kawasaki Heavy (7012 JP): Recovery Done, Eyes on Hydrogen, Aerospace, and Margin Upside

​KHI bounces back with record profits in FY25, fueled by aerospace and energy sectors, poised for 5-6% growth driven by hydrogen and automation,...

Rahul Jain

Kawasaki Heavy (7012 JP): Cheaper than Peers with Index Inclusion Kicker

Kawasaki Heavy should be added to a global index in August. The stock has moved higher and trades cheaper than its peers. There is positioning and...

Brian Freitas

Japan Morning Connection: Oil Down and Defense up as Trump Rails at Putin and Sends More Patriots

JP autos look ripe for a squeeze if better than expected tarrif outcome. Musk convinced by his humanoid robots despite setbacks. JP heavies should...

Andrew Jackson

JPX Margin Trading Weekly (Jul 4th): Sanrio, Lasertec, Ntt Data, Ihi, Mitsubishi Heavy Industries

We analyzed JPX margin trading positions report for the past week and highlighted Sanrio (8136 JP), Lasertec (6920 JP), Ntt Data (9613 JP), Ihi...

Ke Yan, CFA, FRM

Japan Morning Connection: Big Pivot from Momo into Value Should See a Sharp Factor Rotation Today

​Homebuilders show potential for upside as market rotates; watch big momentum winners for downside. Este Lauder climbs while JP names lag behind.

Andrew Jackson

KHI bounces back with record profits in FY25, fueled by aerospace and energy sectors, poised for 5-6% growth driven by hydrogen and automation,...

Homebuilders show potential for upside as market rotates; watch big momentum winners for downside. Este Lauder climbs while JP names lag behind.