Global Materials | Industrials | Commodities

Rahul Jain

Equity Bottom-Up

<ul>
<li>Business: Japan’s largest integrated energy group, ENEOS runs ~45% of national refining capacity, upstream assets, power generation, and holds 42% of JX Advanced Metals.</li>
<li>Earnings (3Y): OP peaked at ¥504 bn in FY2023 on high oil prices, fell to ¥107 bn in FY2024 on inventory losses, and is guided to ¥300 bn in FY2025.</li>
<li>Valuation &amp; Risks: Trades at ~8× EV/EBITDA (~¥900/share), above our SOTP fair value (~¥690); key risks include crude volatility, shrinking domestic fuel demand, high leverage, and transition execution.</li>
</ul>


Business: Japan’s largest integrated energy group, ENEOS runs ~45% of national refining capacity, upstream assets, power generation, and holds 42% of JX Advanced Metals.
Earnings (3Y): OP peaked at ¥504 bn in FY2023 on high oil prices, fell to ¥107 bn in FY2024 on inventory losses, and is guided to ¥300 bn in FY2025.
Valuation &amp; Risks: Trades at ~8× EV/EBITDA (~¥900/share), above our SOTP fair value (~¥690); key risks include crude volatility, shrinking domestic fuel demand, high leverage, and transition execution.


ENEOS Holdings (TSE: 5020): Cash Returns Support, Valuation Capped

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.</li>
<li>China (Shanghai Composite) has been a major focus ever since our July 3 report titled "China and Japan Breaking Out," and it's pulling back toward 10-year base support at 3675-3725;buy.</li>
<li>Japan's TOPIX and TOPIX Small indexes remain bullish (BUY), but RS remains below multi-month resistances; we would upgrade Japan to overweight on RS breakouts.</li>
</ul>


We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.
China (Shanghai Composite) has been a major focus ever since our July 3 report titled "China and Japan Breaking Out," and it's pulling back toward 10-year base support at 3675-3725;buy.
Japan's TOPIX and TOPIX Small indexes remain bullish (BUY), but RS remains below multi-month resistances; we would upgrade Japan to overweight on RS breakouts.


Buys in Japan and Europe; China Pulling Back -- Buy; MSCI ACWI Uptrend Intact

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Thematic (Sector/Industry)

<ul>
<li>Oil’s positive reaction to bearish news was a signal to go long.</li>
<li>Regardless of the outcome of the current fighting between Israel and Iran, oil has likely bottomed.</li>
<li>We add oil and related equities to the inflation basket</li>
</ul>


Oil’s positive reaction to bearish news was a signal to go long.
Regardless of the outcome of the current fighting between Israel and Iran, oil has likely bottomed.
We add oil and related equities to the inflation basket


Tactical Trading -Oil Joins the Commodity Rally

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

<ul>
<li>AMAT numbers sends US SPE lower on Friday which should spill over into Japan.</li>
<li>Trump's Energy Secretary nomination may be a short term positive for oil and gas related, longer-term questionable.</li>
<li>Both Ibiden and Renesas have potential to be rerated on their NVDA exposure, but market indifferent so far.</li>
</ul>


AMAT numbers sends US SPE lower on Friday which should spill over into Japan.
Trump's Energy Secretary nomination may be a short term positive for oil and gas related, longer-term questionable.
Both Ibiden and Renesas have potential to be rerated on their NVDA exposure, but market indifferent so far.


Japan Morning Connection: Potential for Ibiden and Renesas to Be Seen as NVDA Plays

<ul>
<li>NVDA lifts markets on comments from Hon Hai Chairman that demand for Blackwell was 'crazy'.</li>
<li>Oil related names in JP will follow US lower on the drop in oil, despite Hurricane Milton having the potential to disrupt production.</li>
<li>HK futures finding off the lows overnight should point to upside for related China names in Japan to start; Gamers to be sold heavily after PIF sale.</li>
</ul>


NVDA lifts markets on comments from Hon Hai Chairman that demand for Blackwell was 'crazy'.
Oil related names in JP will follow US lower on the drop in oil, despite Hurricane Milton having the potential to disrupt production.
HK futures finding off the lows overnight should point to upside for related China names in Japan to start; Gamers to be sold heavily after PIF sale.


Japan Morning Connection: HK Futures off the Lows Should Point to Upside for China Related Names

Japan

INPEX CORPORATION is a holding company established through the reorganization of INPEX Corp and Teikoku Oil.  The Company manages subsidiaries that explores, produces, and sells oil and natural gas.

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Inpex Corp (1605 JP)

ENEOS Holdings (TSE: 5020): Cash Returns Support, Valuation Capped

ENEOS, Japan's top energy group, faces earnings fluctuations due to oil prices and inventory losses, with valuation above fair value and risks...

Rahul Jain

Buys in Japan and Europe; China Pulling Back -- Buy; MSCI ACWI Uptrend Intact

Buys in Japan and Europe; China's Shanghai Composite Pulling Back to 10-year Base Support -- Buy; MSCI $ACWI Uptrend Intact. Actionable Themes:...

Vermilion Research

Tactical Trading -Oil Joins the Commodity Rally

Oil joins the commodity rally and has likely bottommed regardless of the outcome in the current Israel/Iran fighting. OIl related equities are now...

Rikki Malik

Japan Morning Connection: Potential for Ibiden and Renesas to Be Seen as NVDA Plays

AMAT numbers impact US SPE which should effect in Japan, Trump's Energy Secretary nomination may benefit oil/gas short term, Ibiden and Renesas...

Andrew Jackson

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

ENEOS Holdings (TSE: 5020): Cash Returns Support, Valuation Capped

​ENEOS, Japan's top energy group, faces earnings fluctuations due to oil prices and inventory losses, with valuation above fair value and risks...

Rahul Jain

Buys in Japan and Europe; China Pulling Back -- Buy; MSCI ACWI Uptrend Intact

Buys in Japan and Europe; China's Shanghai Composite Pulling Back to 10-year Base Support -- Buy; MSCI $ACWI Uptrend Intact. Actionable Themes:...

Vermilion Research

Tactical Trading -Oil Joins the Commodity Rally

Oil joins the commodity rally and has likely bottommed regardless of the outcome in the current Israel/Iran fighting. OIl related equities are now...

Rikki Malik

Japan Morning Connection: Potential for Ibiden and Renesas to Be Seen as NVDA Plays

​AMAT numbers impact US SPE which should effect in Japan, Trump's Energy Secretary nomination may benefit oil/gas short term, Ibiden and Renesas...

Andrew Jackson

Japan Morning Connection: HK Futures off the Lows Should Point to Upside for China Related Names

NVDA +4.1% on comments from Hon Hai that demand for Blackwell chips was ‘crazy’, Oil related will follow US lower, HK futures off the lows should...

Andrew Jackson

ENEOS, Japan's top energy group, faces earnings fluctuations due to oil prices and inventory losses, with valuation above fair value and risks...

AMAT numbers impact US SPE which should effect in Japan, Trump's Energy Secretary nomination may benefit oil/gas short term, Ibiden and Renesas...