Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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

<p>We visited <a href="https://www.smartkarma.com/entities/209" target="_blank" data-smartkarma-citation="entities:209:1">Kobe Steel Ltd (5406 JP)</a> this morning to get an update on customer reactions to its data falsification scandal and whether the company has begun to see any clear impact from its scandal. In addition, we were able to get an update on current conditions within its various segments and discuss some potential future growth products such as gas compressors which could benefit from Japan's drive to turn itself into a hydrogen society.</p><h2>To begin with, further details on the data falsification</h2>…

We visited Kobe Steel Ltd (5406 JP) this morning to get an update on customer reactions to its data falsification scandal and whether the company has begun to see any clear impact from its scandal. In addition, we were able to get an update on current conditions within its various segments and discuss some potential future growth products such as gas compressors which could benefit from Japan's drive to turn itself into a hydrogen society.To begin with, further details on the data falsification…

Kobe Steel: Visit Suggests Limited Fallout From Scandal, Upside to Guidance

<p>Kobe Steel announced an update on the progress of its safety verifications with its customers which can be found <a href="http://www.kobelco.co.jp/english/releases/1197968_15581.html" target="_blank">here</a>. Progress was steady and over 90% of customers are now considered to be unlikely to face safety issues. Importantly, the customers that Kobe Steel has identified as being unlikely to face problems appear to gradually be reaching the same conclusion themselves. At this point, we increasingly believe that direct costs from this scandal will be extremely limited.</p><p>The company also…</p>

Kobe Steel announced an update on the progress of its safety verifications with its customers which can be found here. Progress was steady and over 90% of customers are now considered to be unlikely to face safety issues. Importantly, the customers that Kobe Steel has identified as being unlikely to face problems appear to gradually be reaching the same conclusion themselves. At this point, we increasingly believe that direct costs from this scandal will be extremely limited.The company also…

Kobe Steel: Disclosures Regarding Causes of and Steps to Prevent Reoccurrence of Improper Conduct

<p>We commented earlier that Kobe Steel's downward revision to recurrent profit guidance was too conservative and that the assumptions for the Steel and Construction Machinery segments in particular were highly unrealistic. If our analysis is correct, this puts the company at less than 7x PE and less than 5x EV/EBITDA before factoring in recall or compensation costs for products with falsified specifications. While these potential costs could have a large impact and represent a significant risk…</p>

We commented earlier that Kobe Steel's downward revision to recurrent profit guidance was too conservative and that the assumptions for the Steel and Construction Machinery segments in particular were highly unrealistic. If our analysis is correct, this puts the company at less than 7x PE and less than 5x EV/EBITDA before factoring in recall or compensation costs for products with falsified specifications. While these potential costs could have a large impact and represent a significant risk…

Kobe Steel: Steel and Construction Machinery Businesses Likely to Drive Recurrent Profit to JPY75bn

Analyst - Japan Autos, Hirakata Office

Noriaki Hirakata, CFA

Analyst - Japan Autos

Hirakata Office

<h2>We came back from SUBARU press conference held at its HQ at Yebisu, Tokyo with following takeaways.</h2><h2>What happened?</h2><p>In response to an inquiry from MITL after Nissan violated vehicle inspection requirements, SUBARU investigated 3 vehicle inspection lines in Japan. It was discovered that non-certified inspectors while still in training on the job conducted vehicle inspections at the final inspection line. Upon discovery on Oct.3<sup>rd </sup>2017, they were stopped immediately.</p><h2>Why did it happen?</h2><p>Although SUBARU…</p>

We came back from SUBARU press conference held at its HQ at Yebisu, Tokyo with following takeaways.What happened?In response to an inquiry from MITL after Nissan violated vehicle inspection requirements, SUBARU investigated 3 vehicle inspection lines in Japan. It was discovered that non-certified inspectors while still in training on the job conducted vehicle inspections at the final inspection line. Upon discovery on Oct.3rd 2017, they were stopped immediately.Why did it happen?Although SUBARU…

<p>At its press conference this evening Kobe Steel disclosed the results to date of its safety checks on the products involved in the falsified data scandal. In addition, the company disclosed that four further products have been found to have falsified data with another one product currently being confirmed. The company also said that it has not yet been informed of any customers recalling products, though a small number have confirmed that they will replace parts during routine inspection checks…</p>

At its press conference this evening Kobe Steel disclosed the results to date of its safety checks on the products involved in the falsified data scandal. In addition, the company disclosed that four further products have been found to have falsified data with another one product currently being confirmed. The company also said that it has not yet been informed of any customers recalling products, though a small number have confirmed that they will replace parts during routine inspection checks…

Kobe Steel: Not Quite an All Clear but Safety Issues Now Look Unlikely; Recalls Likely Limited

Japan

Kobe Steel, Ltd. is a steelmaker, as well as a supplier of aluminum and copper products.  The products include steel plates and steel rods.  The Company also operates other businesses such as welding consumables, urban infrastructure, plant engineering, and industrial & construction machinery.  Kobe Steel has operating offices in the US, Europe, and Asia.

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Kobe Steel Ltd (5406 JP)

Kobe Steel: Visit Suggests Limited Fallout From Scandal, Upside to Guidance

We visited Kobe Steel Ltd (5406 JP) this morning to get an update on customer reactions to its data falsification scandal and whether the company...

Mio Kato

Kobe Steel: Disclosures Regarding Causes of and Steps to Prevent Reoccurrence of Improper Conduct

Kobe Steel announced an update on the progress of its safety verifications with its customers which can be found here. Progress was steady and over...

Mio Kato

Kobe Steel: Steel and Construction Machinery Businesses Likely to Drive Recurrent Profit to JPY75bn

We commented earlier that Kobe Steel's downward revision to recurrent profit guidance was too conservative and that the assumptions for the Steel...

Mio Kato

SUBARU Press Conference Takeaways

We came back from SUBARU press conference held at its HQ at Yebisu, Tokyo with following takeaways.What happened?In response to an inquiry from...

Noriaki Hirakata, CFA

Kobe Steel: Not Quite an All Clear but Safety Issues Now Look Unlikely; Recalls Likely Limited

At its press conference this evening Kobe Steel disclosed the results to date of its safety checks on the products involved in the falsified data...

Mio Kato

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