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>1Q results supported management's full-year sales and profit guidance, which remains unchanged. Operating profit was up 2.7x YoY on a 17% increase in sales.</li>
<li>Total new orders received increased by only 4.2% YoY and fell short of sales, but Aerospace &amp; Defense orders were up 35.5% and slightly exceeded sales.</li>
<li>Our own forecast - above management's guidance this year with further growth next year - and our share price target are unchanged. 21% potential upside.</li>
</ul>


1Q results supported management's full-year sales and profit guidance, which remains unchanged. Operating profit was up 2.7x YoY on a 17% increase in sales.
Total new orders received increased by only 4.2% YoY and fell short of sales, but Aerospace &amp; Defense orders were up 35.5% and slightly exceeded sales.
Our own forecast - above management's guidance this year with further growth next year - and our share price target are unchanged. 21% potential upside.


IHI (7013 JP): Buy Back in for Post-Crash Recovery

<ul>
<li>Japan's rising defense budget and military collaboration with the US and Europe should support a high level of orders for the foreseeable future.</li>
<li>Defense is the growth driver, but other divisions should hold up well due to the ongoing rationalization of operations.</li>
<li>Profits should rebound this year and rise further in FY Mar-26, bringing the P/E down to 9X or less. The weak yen is a large positive. </li>
</ul>


Japan's rising defense budget and military collaboration with the US and Europe should support a high level of orders for the foreseeable future.
Defense is the growth driver, but other divisions should hold up well due to the ongoing rationalization of operations.
Profits should rebound this year and rise further in FY Mar-26, bringing the P/E down to 9X or less. The weak yen is a large positive. 


IHI (7013 JP): 30% Upside Potential as Aerospace and Defense Rebound

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>EU defence names higher again, expect more upside for JP heavies after yesterdays lull.</li>
<li>Intel managed to eek out gains with the market still positive on streamlining.</li>
<li>BYD rapid charging adding to Tesla woes, downside pressure to build for Panasonic as restructuring allure fades.</li>
</ul>


EU defence names higher again, expect more upside for JP heavies after yesterdays lull.
Intel managed to eek out gains with the market still positive on streamlining.
BYD rapid charging adding to Tesla woes, downside pressure to build for Panasonic as restructuring allure fades.


Japan Morning Connection: Huang's AI Keynote Fails to Excite Investors

<ul>
<li>AI back in focus with NVDA's Jensen set to deliver his keynote tomorrow.</li>
<li>Intel jumping with the new CEO looking to shake up its AI lineup and further trim the fat.</li>
<li>Buffet increasing stakes in the Trading Houses extremely well flagged so don't expect much surprise.</li>
</ul>


AI back in focus with NVDA's Jensen set to deliver his keynote tomorrow.
Intel jumping with the new CEO looking to shake up its AI lineup and further trim the fat.
Buffet increasing stakes in the Trading Houses extremely well flagged so don't expect much surprise.


Japan Morning Connection: Tech Shrugging off Megacap Weakness as Quantum Shines

<ul>
<li>Expect a strong follow through from Japan's SPE despite a rare outperformance last week</li>
<li>Laggards such as TEL, Screen and Micronics may be targets.  </li>
<li>Many mainstay EU defence names surged to new highs; expect heavies and JSW upside</li>
</ul>


Expect a strong follow through from Japan's SPE despite a rare outperformance last week
Laggards such as TEL, Screen and Micronics may be targets.  
Many mainstay EU defence names surged to new highs; expect heavies and JSW upside


Japan Morning Connection: Solid Tech Rebound Ahead of the NVDA Developers Conference This Week

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)

IHI (7013 JP): Buy Back in for Post-Crash Recovery

IHI hit our ¥6,000 price target in July and should hit it again now that the volatile response to the BOJ rate hike is behind us. 1Q results...

Scott Foster

IHI (7013 JP): 30% Upside Potential as Aerospace and Defense Rebound

IHI is a relatively cheap defense contractor that stands to benefit from Japan's rising defense budget. Sales and profits should rebound this year...

Scott Foster

Japan Morning Connection: Huang's AI Keynote Fails to Excite Investors

EU defence stocks continue higher, potential for more gains for JP heavyweights.BYD's rapid charging poses more challenges for Tesla. Panasonic...

Andrew Jackson

Japan Morning Connection: Tech Shrugging off Megacap Weakness as Quantum Shines

AI is back in focus as NVDA GTC developers conference. Intel's new CEO aims to shake up its AI lineup. Buffet's increased stakes in Trading Houses...

Andrew Jackson

Japan Morning Connection: Solid Tech Rebound Ahead of the NVDA Developers Conference This Week

Japan's SPE likely to continue strong performance, with potential targets in laggards like TEL, Screen, and Micronics. EU defense stocks have been...

Andrew Jackson

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

IHI (7013 JP): Buy Back in for Post-Crash Recovery

IHI hit our ¥6,000 price target in July and should hit it again now that the volatile response to the BOJ rate hike is behind us. 1Q results...

Scott Foster

IHI (7013 JP): 30% Upside Potential as Aerospace and Defense Rebound

IHI is a relatively cheap defense contractor that stands to benefit from Japan's rising defense budget. Sales and profits should rebound this year...

Scott Foster

Japan Morning Connection: Huang's AI Keynote Fails to Excite Investors

​EU defence stocks continue higher, potential for more gains for JP heavyweights.BYD's rapid charging poses more challenges for Tesla. Panasonic...

Andrew Jackson

Japan Morning Connection: Tech Shrugging off Megacap Weakness as Quantum Shines

​AI is back in focus as NVDA GTC developers conference. Intel's new CEO aims to shake up its AI lineup. Buffet's increased stakes in Trading Houses...

Andrew Jackson

Japan Morning Connection: Solid Tech Rebound Ahead of the NVDA Developers Conference This Week

​Japan's SPE likely to continue strong performance, with potential targets in laggards like TEL, Screen, and Micronics. EU defense stocks have been...

Andrew Jackson

EU defence stocks continue higher, potential for more gains for JP heavyweights.BYD's rapid charging poses more challenges for Tesla. Panasonic...

AI is back in focus as NVDA GTC developers conference. Intel's new CEO aims to shake up its AI lineup. Buffet's increased stakes in Trading Houses...

Japan's SPE likely to continue strong performance, with potential targets in laggards like TEL, Screen, and Micronics. EU defense stocks have been...