Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

Thematic (Sector/Industry)

<ul>
<li>Buying the worst-performing stocks of the previous 12 months has outperformed Japan’s Topix index by an average of 7% annually for 9 straight years</li>
<li>For most of 2024, the strategy didn’t work, but an uptick in TOBs, MBOs, and merger talks is suddenly making it unsafe to short low-PBR companies indiscriminately.</li>
<li>Suddenly, dozens of previously complacent companies have the fear of God and are taking action to up their profitability and the market is taking notice. </li>
</ul>


Buying the worst-performing stocks of the previous 12 months has outperformed Japan’s Topix index by an average of 7% annually for 9 straight years
For most of 2024, the strategy didn’t work, but an uptick in TOBs, MBOs, and merger talks is suddenly making it unsafe to short low-PBR companies indiscriminately.
Suddenly, dozens of previously complacent companies have the fear of God and are taking action to up their profitability and the market is taking notice. 


2024 Was Ugly for Turnarounds, 2025 Should Be Awesome!

Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

Equity Bottom-Up

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul><li>Arizona and Taiwan are deepening aerospace and defense partnerships to support local supply chains in response to increasing demand. #partnership #aerospace #defense</li><li>The drone market is seeing growth primarily driven by service applications, rather than hardware. India's Sahasra Semiconductor is recruiting expat experts and gearing up for a customer launch later this year.</li><li>Huawei is reportedly offering triple salaries to attract engineers from TSMC, while Toyota suppliers are revising their forecasts due to sluggish sales and reduced production. Apple is in talks with Indonesia for a manufacturing investment to address an iPhone ban, and Taiwan's Micro LED industry must innovate quickly to keep pace with OLED advancements.</li></ul>

Arizona and Taiwan are deepening aerospace and defense partnerships to support local supply chains in response to increasing demand. #partnership #aerospace #defenseThe drone market is seeing growth primarily driven by service applications, rather than hardware. India's Sahasra Semiconductor is recruiting expat experts and gearing up for a customer launch later this year.Huawei is reportedly offering triple salaries to attract engineers from TSMC, while Toyota suppliers are revising their forecasts due to sluggish sales and reduced production. Apple is in talks with Indonesia for a manufacturing investment to address an iPhone ban, and Taiwan's Micro LED industry must innovate quickly to keep pace with OLED advancements.

Tech Supply Chain Tracker (08-Nov-2024): AZ & Taiwan strengthen aerospace, defense partnerships.

<ul>
<li>Panasonic blew out consensus forecasts in Q2 and trades at 60% of book value. </li>
<li>Jtekt missed but raised its dividend, which was already very high. </li>
<li>Aisin missed, but by a trivial amount, and the price/book value fell back to a level that marked support on multiple occasions since the Pandemic started.</li>
</ul>


Panasonic blew out consensus forecasts in Q2 and trades at 60% of book value. 
Jtekt missed but raised its dividend, which was already very high. 
Aisin missed, but by a trivial amount, and the price/book value fell back to a level that marked support on multiple occasions since the Pandemic started.


<ul>
<li>Silicon carbide chips and new electric vehicles are dominating the news in deep value space, highlighting Rohm, Honda, and Aisin.</li>
<li>We also highlight some juicy dividends that we think need to be taken seriously by growth managers.</li>
<li>This round-up is provided for thought provocation only. Comprehensive deep-dive analysis available to clients on request. </li>
</ul>


Silicon carbide chips and new electric vehicles are dominating the news in deep value space, highlighting Rohm, Honda, and Aisin.
We also highlight some juicy dividends that we think need to be taken seriously by growth managers.
This round-up is provided for thought provocation only. Comprehensive deep-dive analysis available to clients on request. 


Unloved Japan Roundup: Rohm, Honda, Aisin, Jtekt

<ul>
<li>Mazda’s domestic unit volume was up 24% in September, compared to an industrywide total of only 1.1%.</li>
<li>Meanwhile, Q2 consensus EBIT estimates have come down by 32% since the release of Q1 results.</li>
<li>But the yield is over 6%, and the Payout ratio is only 17% even on the new estimates.</li>
</ul>


Mazda’s domestic unit volume was up 24% in September, compared to an industrywide total of only 1.1%.
Meanwhile, Q2 consensus EBIT estimates have come down by 32% since the release of Q1 results.
But the yield is over 6%, and the Payout ratio is only 17% even on the new estimates.


Japan

JTEKT Corporation manufactures bearings for motor vehicles and electronic equipment.  The Company also produces steering systems and oil seals for automobiles, electronic control units, and machine tools.

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JTEKT Corp (6473 JP)

2024 Was Ugly for Turnarounds, 2025 Should Be Awesome!

2025 could be a banner year for turnarounds and value stocks as a spate of recent TOBs, MBOs and merger discussions have suddenly made it unsafe to...

Michael Allen

Tech Supply Chain Tracker (08-Nov-2024): AZ & Taiwan strengthen aerospace, defense partnerships.

Arizona and Taiwan are enhancing aerospace and defense partnerships to meet growing demand for local supply chains, while India's Sahasra...

Tech Supply Chain Tracker

Panasonic (6752): Blows Past Consensus

Panasonic outperforms in Q2, trading at 60% of book value; Jtekt misses but raises dividend; Aisin misses slightly, price/book value falls to...

Michael Allen

Unloved Japan Roundup: Rohm, Honda, Aisin, Jtekt

New product launches could be the start of a deluge of Silicon carbide-based chips that improve performance and reduce costs of high-powered...

Michael Allen

Unloved Japan Roundup: Bracing for Q3

Mazda’s domestic volume up 24% in September, compared to industrywide average of 1.1%. Q2 estimates down by 32% in 3 months, but yield over 6%,...

Michael Allen

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

2024 Was Ugly for Turnarounds, 2025 Should Be Awesome!

2025 could be a banner year for turnarounds and value stocks as a spate of recent TOBs, MBOs and merger discussions have suddenly made it unsafe to...

Michael Allen

Tech Supply Chain Tracker (08-Nov-2024): AZ & Taiwan strengthen aerospace, defense partnerships.

Arizona and Taiwan are enhancing aerospace and defense partnerships to meet growing demand for local supply chains, while India's Sahasra...

Tech Supply Chain Tracker

Panasonic (6752): Blows Past Consensus

​Panasonic outperforms in Q2, trading at 60% of book value; Jtekt misses but raises dividend; Aisin misses slightly, price/book value falls to...

Michael Allen

Unloved Japan Roundup: Rohm, Honda, Aisin, Jtekt

New product launches could be the start of a deluge of Silicon carbide-based chips that improve performance and reduce costs of high-powered...

Michael Allen

Unloved Japan Roundup: Bracing for Q3

Mazda’s domestic volume up 24% in September, compared to industrywide average of 1.1%. Q2 estimates down by 32% in 3 months, but yield over 6%,...

Michael Allen

Panasonic outperforms in Q2, trading at 60% of book value; Jtekt misses but raises dividend; Aisin misses slightly, price/book value falls to...