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

Mitsubishi Heavy Industries / Equity Bottom-Up

<ul>
<li>Development of AI with Preferred Networks provides a Japanese alternative to the unreliable USA., which has just cut off foreign access to advanced Anthropic models. </li>
<li>Successful H3 rocket launch reduces uncertainty. Positive spin on Global Combat Air Programme kicks that dented can down the road. </li>
<li>Share price down 32% from early March peak to 31x FY Mar-27 EPS guidance as of June 13 close. Time to have another look. </li>
</ul>


Development of AI with Preferred Networks provides a Japanese alternative to the unreliable USA., which has just cut off foreign access to advanced Anthropic models. 
Successful H3 rocket launch reduces uncertainty. Positive spin on Global Combat Air Programme kicks that dented can down the road. 
Share price down 32% from early March peak to 31x FY Mar-27 EPS guidance as of June 13 close. Time to have another look. 


MHI (7011): Autonomous AI Via Preferred Networks

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

Rikki Malik

Thematic (Sector/Industry)

<ul>
<li>Increasing Nuclear energy use is a key platform for PM Takaichi</li>
<li>Recent geopolitical events will likely accelerate this push for energy security</li>
<li>We introduce a basket of stocks to benefit from this theme</li>
</ul>


Increasing Nuclear energy use is a key platform for PM Takaichi
Recent geopolitical events will likely accelerate this push for energy security
We introduce a basket of stocks to benefit from this theme


Critical Mass - Japan's Nuclear Renaissance and the Supply Chain Stocks to Play It.

Japan Specialist

Mark Chadwick

<ul>
<li>FY2025 delivered record order intake, business profit, net income and free cash flow simultaneously, with GTCC order backlog surpassing ¥5 trillion on 35 large-frame turbine bookings.</li>
<li>FY2026 guidance targets 25% business profit growth to ¥540bn with margins inflecting to 10%, underpinned by a ¥13.2 trillion backlog providing exceptional multi-year revenue visibility.</li>
<li>GEV's April orders matching all of Q1 in value makes MHI's -13% GTCC intake guide look conservative; we see material upside risk to Energy Systems earnings through FY3/28.</li>
</ul>


FY2025 delivered record order intake, business profit, net income and free cash flow simultaneously, with GTCC order backlog surpassing ¥5 trillion on 35 large-frame turbine bookings.
FY2026 guidance targets 25% business profit growth to ¥540bn with margins inflecting to 10%, underpinned by a ¥13.2 trillion backlog providing exceptional multi-year revenue visibility.
GEV's April orders matching all of Q1 in value makes MHI's -13% GTCC intake guide look conservative; we see material upside risk to Energy Systems earnings through FY3/28.


<ul>
<li>MHI sits at the nexus of two multi-decade demand cycles: (1) hyperscaler-driven dispatchable power (GTCC) and (2) global defense rearmament</li>
<li>Energy Systems is inflecting from a legacy EPC business into a higher-margin, capacity-constrained turbine and services franchise</li>
<li>Defense provides a growing, non-correlated earnings stream; Balance sheet improvement unlocks strategic and shareholder optionality. <strong>SOTP +15% upside</strong>
</li>
</ul>


MHI sits at the nexus of two multi-decade demand cycles: (1) hyperscaler-driven dispatchable power (GTCC) and (2) global defense rearmament
Energy Systems is inflecting from a legacy EPC business into a higher-margin, capacity-constrained turbine and services franchise
Defense provides a growing, non-correlated earnings stream; Balance sheet improvement unlocks strategic and shareholder optionality. SOTP +15% upside



MHI (7011 JP) | AI Power + Defense Supercycle

<ul>
<li>MHI benefits from two long-term supercycles—AI-driven power generation and global defense rearmament—with a recent pullback offering an appealing re-entry point. </li>
<li>A global gas-turbine supercycle is boosting orders, pricing power, and margins as demand from hyperscalers and utilities exceeds manufacturing capacity. </li>
<li>Markets have yet to fully price in structurally higher earnings and valuations driven by AI-linked power demand and persistent turbine supply constraints.</li>
</ul>


MHI benefits from two long-term supercycles—AI-driven power generation and global defense rearmament—with a recent pullback offering an appealing re-entry point. 
A global gas-turbine supercycle is boosting orders, pricing power, and margins as demand from hyperscalers and utilities exceeds manufacturing capacity. 
Markets have yet to fully price in structurally higher earnings and valuations driven by AI-linked power demand and persistent turbine supply constraints.


MHI (7011): AI Power Demand and Gas-Turbine Supercycle Accelerate

Japan

Mitsubishi Heavy Industries, Ltd. is a comprehensive heavy machinery maker. The Company manufactures machinery, ships, turbines and engines, prime movers, aircrafts, and machine parts for military and commercial use.  Mitsubishi Heavy Industries also researches and develops nuclear power plants.

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Mitsubishi Heavy Industries (7011 JP)

MHI (7011): Autonomous AI Via Preferred Networks

Tie-up with Preferred Networks provides Japanese AI just when access to advanced American AI has been blocked. Successful H3 launch reduces...

Scott Foster

Critical Mass - Japan's Nuclear Renaissance and the Supply Chain Stocks to Play It.

Many nuclear supply chain stocks limit up yesterday based on Kyodo news report that the 3rd tranche of the $550bn Japan–US investment package is...

Rikki Malik

MHI (7011) | Powering the AI Age

Remain Bullish. Record results, an unmatched backlog, and accelerating GTCC demand make the current valuation discount hard to justify

Mark Chadwick

MHI (7011 JP) | AI Power + Defense Supercycle

MHI benefits from demand cycles in hyperscaler-driven power and global defense rearmament, transitioning to higher-margin turbine business with...

Mark Chadwick

MHI (7011): AI Power Demand and Gas-Turbine Supercycle Accelerate

MHI benefits from long-term supercycles in AI-driven power generation and global defense rearmament, with a recent pullback providing a good re...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

MHI (7011): Autonomous AI Via Preferred Networks

Tie-up with Preferred Networks provides Japanese AI just when access to advanced American AI has been blocked. Successful H3 launch reduces...

Scott Foster

Critical Mass - Japan's Nuclear Renaissance and the Supply Chain Stocks to Play It.

Many nuclear supply chain stocks limit up yesterday based on Kyodo news report that the 3rd tranche of the $550bn Japan–US investment package is...

Rikki Malik

MHI (7011) | Powering the AI Age

Remain Bullish. Record results, an unmatched backlog, and accelerating GTCC demand make the current valuation discount hard to justify

Mark Chadwick

MHI (7011 JP) | AI Power + Defense Supercycle

​MHI benefits from demand cycles in hyperscaler-driven power and global defense rearmament, transitioning to higher-margin turbine business with...

Mark Chadwick

MHI (7011): AI Power Demand and Gas-Turbine Supercycle Accelerate

​MHI benefits from long-term supercycles in AI-driven power generation and global defense rearmament, with a recent pullback providing a good re...

Mark Chadwick

MHI benefits from demand cycles in hyperscaler-driven power and global defense rearmament, transitioning to higher-margin turbine business with...

MHI benefits from long-term supercycles in AI-driven power generation and global defense rearmament, with a recent pullback providing a good re...