Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Equity Bottom-Up

Kawasaki Heavy Industries / Equity Bottom-Up

<ul>
<li>Expect continued buying in defense related, as well as banks and life insurance, renewable energy, rails, and medical IT plays with Shigeru Ishiba at the helm. </li>
<li>The Market will be quick to rotate out of names which spiked into Friday's close on expectation for a Sanae Takaichi win in the LDP election.  </li>
<li>Ishiba has been a vocal critic of Abenomics, and his potential policies aimed at higher taxes for investment incomes and capital gains are set to weigh on the Japanese market. </li>
</ul>


Expect continued buying in defense related, as well as banks and life insurance, renewable energy, rails, and medical IT plays with Shigeru Ishiba at the helm. 
The Market will be quick to rotate out of names which spiked into Friday's close on expectation for a Sanae Takaichi win in the LDP election.  
Ishiba has been a vocal critic of Abenomics, and his potential policies aimed at higher taxes for investment incomes and capital gains are set to weigh on the Japanese market. 


Best Outright and Pair Trades for an Ishiba-Led LDP

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 Dec 12th. The aggregated net margin trading position is USD19,648m.</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 Ci Medical, Toyoda Gosei, SoftBank, Toyota Motor, Lasertec, Skylark, Nintendo, Kawasaki Heavy Industries, Mitsubishi UFJ Financial, Tokyo Electron, Ci Medical, Toyoda Gosei.</li>
</ul>


We analyzed the changes in margin trading positions of JPX stocks as of Dec 12th. The aggregated net margin trading position is USD19,648m.
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 Ci Medical, Toyoda Gosei, SoftBank, Toyota Motor, Lasertec, Skylark, Nintendo, Kawasaki Heavy Industries, Mitsubishi UFJ Financial, Tokyo Electron, Ci Medical, Toyoda Gosei.


JPX Margin Trading Weekly (Dec 12th): Ci Medical, Toyoda Gosei, SoftBank, Toyota Motor, Lasertec

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Index Rebalance

Kawasaki Heavy Industries / Index Rebalance

<ul>
<li>On 26 August at the close, 2 names will get added to and 5 names deleted from a global index provider's major Japan/global "standard" index.</li>
<li>6 of 7 changes were in the Quiddity Index predictions as of end Jun-2025. One dropped, then two got added. Our final predictions had all seven plus one more DEL.</li>
<li>These changes were well-flagged so well pre-positioned. This insight looks at shareholder structure, historical fundamental ratios, and performance vs Peers. Watch the direct peers.</li>
</ul>


On 26 August at the close, 2 names will get added to and 5 names deleted from a global index provider's major Japan/global "standard" index.
6 of 7 changes were in the Quiddity Index predictions as of end Jun-2025. One dropped, then two got added. Our final predictions had all seven plus one more DEL.
These changes were well-flagged so well pre-positioned. This insight looks at shareholder structure, historical fundamental ratios, and performance vs Peers. Watch the direct peers.


[Quiddity Index] August Global Index Japan ADDs - Differing Peer Dynamics - Kawasaki Heavy (7012 JP)

Global Materials | Industrials | Commodities

Rahul Jain

<ul>
<li>Q1 revenue +10% YoY, with business profit up ~21% YoY on strength in Rolling Stock and ES&amp;M, but headline net profit –72% YoY on FX headwinds and higher NCI drag.</li>
<li>Guidance / Revisions: FY26/3 guidance left unchanged, but steep H2 ask implies ~12% revenue and ~29% profit growth vs last year.</li>
<li>Outlook &amp; Valuation: Near-term pressured by FX/tariffs, but aero/energy support medium-term growth; trades at ~14x NTM P/E, ~7.6x EV/EBITDA, a discount to peers.</li>
</ul>


Q1 revenue +10% YoY, with business profit up ~21% YoY on strength in Rolling Stock and ES&amp;M, but headline net profit –72% YoY on FX headwinds and higher NCI drag.
Guidance / Revisions: FY26/3 guidance left unchanged, but steep H2 ask implies ~12% revenue and ~29% profit growth vs last year.
Outlook &amp; Valuation: Near-term pressured by FX/tariffs, but aero/energy support medium-term growth; trades at ~14x NTM P/E, ~7.6x EV/EBITDA, a discount to peers.


Kawasaki Heavy (7012 JP) – Soft Start to FY26, Steep H2 Profit Ask Vs Guidance

<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

Japan

Kawasaki Heavy Industries, Ltd. designs, develops, and manufactures transport equipment and industrial heavy machinery for military and commercial use.  The Company produces ships, railroad cars, aircraft engines and parts, hydraulic and gas turbines, submarine engines, boilers, and industrial robots.  Kawasaki Heavy Industries offers engineering and construction services to industrial plants.

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Kawasaki Heavy Industries (7012 JP)

Best Outright and Pair Trades for an Ishiba-Led LDP

How to position in Japanese equities after the surprise win by Shigeru Ishiba over Sanae Takaichi in Friday's LDP election.

Andrew Jackson

JPX Margin Trading Weekly (Dec 12th): Ci Medical, Toyoda Gosei, SoftBank, Toyota Motor, Lasertec

We analyzed JPX margin trading positions report for the past week and highlighted Ci Medical (3540 JP), Toyoda Gosei (7282 JP), SoftBank (9984 JP),...

Ke Yan, CFA, FRM

[Quiddity Index] August Global Index Japan ADDs - Differing Peer Dynamics - Kawasaki Heavy (7012 JP)

Kawasaki Heavy was a well-flagged inclusion into the global index rebal on 26-Aug. The stock performed well, with peers, but after 30 June, started...

Travis Lundy

Kawasaki Heavy (7012 JP) – Soft Start to FY26, Steep H2 Profit Ask Vs Guidance

FY26/3 guidance unchanged, H2 asks for 12% revenue and 29% profit growth; near-term pressure from FX/tariffs, medium-term growth from aero/energy;...

Rahul Jain

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

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Best Outright and Pair Trades for an Ishiba-Led LDP

How to position in Japanese equities after the surprise win by Shigeru Ishiba over Sanae Takaichi in Friday's LDP election.

Andrew Jackson

JPX Margin Trading Weekly (Dec 12th): Ci Medical, Toyoda Gosei, SoftBank, Toyota Motor, Lasertec

We analyzed JPX margin trading positions report for the past week and highlighted Ci Medical (3540 JP), Toyoda Gosei (7282 JP), SoftBank (9984 JP),...

Ke Yan, CFA, FRM

[Quiddity Index] August Global Index Japan ADDs - Differing Peer Dynamics - Kawasaki Heavy (7012 JP)

Kawasaki Heavy was a well-flagged inclusion into the global index rebal on 26-Aug. The stock performed well, with peers, but after 30 June, started...

Travis Lundy

Kawasaki Heavy (7012 JP) – Soft Start to FY26, Steep H2 Profit Ask Vs Guidance

​FY26/3 guidance unchanged, H2 asks for 12% revenue and 29% profit growth; near-term pressure from FX/tariffs, medium-term growth from aero/energy;...

Rahul Jain

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

FY26/3 guidance unchanged, H2 asks for 12% revenue and 29% profit growth; near-term pressure from FX/tariffs, medium-term growth from aero/energy;...

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