Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Echoes of August with Japan looking to start the day very weak on the lead from US semi related.</li>
<li>Expect heavy selling for recent retail margin favourites e.g. Mercari, IHI, KHI and Socionext, and SPE winners such as Kokusai and Advantest, although the sector will start under heavy pressure.</li>
<li>Nothing from Nikkei Inc. yet on their NKY225 rebalance decision, but expect outsized volatility today with many multi-strategy pods shuttered during the August sell off.</li>
</ul>


Echoes of August with Japan looking to start the day very weak on the lead from US semi related.
Expect heavy selling for recent retail margin favourites e.g. Mercari, IHI, KHI and Socionext, and SPE winners such as Kokusai and Advantest, although the sector will start under heavy pressure.
Nothing from Nikkei Inc. yet on their NKY225 rebalance decision, but expect outsized volatility today with many multi-strategy pods shuttered during the August sell off.


Japan Morning Connection: Expect Volatility with Retail and SPE Stocks Under Pressure

<ul>
<li>News Intel may be looking to restructure and even sell its fab business, a slight negative for Japanese SPE suppliers.</li>
<li>Japan upping defence budget to a record high a positive for related names, including KHI which has been excessively weak on the news it fabricated data for marine engine business.</li>
<li>Nikkei Inc. is expected to announce results for 30th September rebalance today or tomorrow which may see big buying for the likes of Ryohin Keikaku, NRI and possibly one other.</li>
</ul>


News Intel may be looking to restructure and even sell its fab business, a slight negative for Japanese SPE suppliers.
Japan upping defence budget to a record high a positive for related names, including KHI which has been excessively weak on the news it fabricated data for marine engine business.
Nikkei Inc. is expected to announce results for 30th September rebalance today or tomorrow which may see big buying for the likes of Ryohin Keikaku, NRI and possibly one other.


Japan Morning Connection: Record Defense Budget and Nikkei Rebalance Set to Boost Related Stocks

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>The next leader of Japan's ruling LDP, who will almost certainly become prime minister in October, will probably not make major changes to the nation's defense policy.</li>
<li>Guidance remains unchanged after 1Q results that suggest the possibility of a better than expected order flow but also a material negative impact from a stronger yen.</li>
<li>MHI's valuation is not yet in speculative territory, but neither is it compelling. If the yen remains stable, we expect the share price to test its recent highs.</li>
</ul>


The next leader of Japan's ruling LDP, who will almost certainly become prime minister in October, will probably not make major changes to the nation's defense policy.
Guidance remains unchanged after 1Q results that suggest the possibility of a better than expected order flow but also a material negative impact from a stronger yen.
MHI's valuation is not yet in speculative territory, but neither is it compelling. If the yen remains stable, we expect the share price to test its recent highs.


MHI (7011 JP): Election Unlikely to Affect Defense Budget

<ul>
<li>Yamaha Motor share sale by Toyota, Yamaha Corp and MS&amp;AD may take time to clear, but the outlook for Yamaha Motor is improving. Expect Yamaha Corp strength on buyback expectations.</li>
<li>Ueda signalling a slightly hawkish tone on Friday should be good for banks and utilities, but less good for exporters, tourism related and real estate.</li>
<li>6963 Rohm is starting to look interesting again with a few upcoming drivers which should help it rebound, including next weeks NKY225 rebalance announcement.</li>
</ul>


Yamaha Motor share sale by Toyota, Yamaha Corp and MS&amp;AD may take time to clear, but the outlook for Yamaha Motor is improving. Expect Yamaha Corp strength on buyback expectations.
Ueda signalling a slightly hawkish tone on Friday should be good for banks and utilities, but less good for exporters, tourism related and real estate.
6963 Rohm is starting to look interesting again with a few upcoming drivers which should help it rebound, including next weeks NKY225 rebalance announcement.


Japan Morning Connection: Yamaha Motor, Rohm, Kawasaki Heavy

<ul>
<li>Gains for Micron on the potential for DDR5 price hikes should help lift <a href="https://www.smartkarma.com/entities/micronics-japan-co-ltd" target="_blank" rel="noopener">6871 Micronics</a> after yesterdays excessive weakness.</li>
<li>More cheer for US home builders after Smith Douglas number beat, adding to the upside story for Sumi Forestry and Selkisui House.</li>
<li>Defence related plays should remain in the spotlight with Kishida replacement candidates Ishiba and Kono both ex-defence ministers.</li>
</ul>


Gains for Micron on the potential for DDR5 price hikes should help lift 6871 Micronics after yesterdays excessive weakness.
More cheer for US home builders after Smith Douglas number beat, adding to the upside story for Sumi Forestry and Selkisui House.
Defence related plays should remain in the spotlight with Kishida replacement candidates Ishiba and Kono both ex-defence ministers.


Japan Morning Connection: Micronics, Mitsubishi Heavy, Kawasaki Heavy

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Mitsubishi Heavy Industries (7011 JP)

Japan Morning Connection: Expect Volatility with Retail and SPE Stocks Under Pressure

Japan's market set to open weak following US semi-related lead, heavy selling expected for retail margin favorites and SPE winners, potential...

Andrew Jackson

MHI (7011 JP): Election Unlikely to Affect Defense Budget

At 28x earnings, MHI is not speculative, but neither is it cheap. We expect it to test recent highs in the run-up to the LDP party presidential...

Scott Foster

Japan Morning Connection: Yamaha Motor, Rohm, Kawasaki Heavy

Yamaha Motor outlook improving with share sale, Ueda's hawkish tone favors banks and utilities, Rohm showing rebound potential with upcoming drivers.

Andrew Jackson

Japan Morning Connection: Micronics, Mitsubishi Heavy, Kawasaki Heavy

Micron's gains from potential DDR5 price hikes could boost Micronics; Defence-related stocks are in focus with Kishida replacement candidates both...

Andrew Jackson

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Morning Connection: Expect Volatility with Retail and SPE Stocks Under Pressure

​Japan's market set to open weak following US semi-related lead, heavy selling expected for retail margin favorites and SPE winners, potential...

Andrew Jackson

Japan Morning Connection: Record Defense Budget and Nikkei Rebalance Set to Boost Related Stocks

​News Intel may restructure/sell fab business, negative for Japanese SPE suppliers. Japan defense budget increase positive for related names....

Andrew Jackson

MHI (7011 JP): Election Unlikely to Affect Defense Budget

At 28x earnings, MHI is not speculative, but neither is it cheap. We expect it to test recent highs in the run-up to the LDP party presidential...

Scott Foster

Japan Morning Connection: Yamaha Motor, Rohm, Kawasaki Heavy

​Yamaha Motor outlook improving with share sale, Ueda's hawkish tone favors banks and utilities, Rohm showing rebound potential with upcoming drivers.

Andrew Jackson

Japan Morning Connection: Micronics, Mitsubishi Heavy, Kawasaki Heavy

​Micron's gains from potential DDR5 price hikes could boost Micronics; Defence-related stocks are in focus with Kishida replacement candidates both...

Andrew Jackson

Japan's market set to open weak following US semi-related lead, heavy selling expected for retail margin favorites and SPE winners, potential...

News Intel may restructure/sell fab business, negative for Japanese SPE suppliers. Japan defense budget increase positive for related names....

Yamaha Motor outlook improving with share sale, Ueda's hawkish tone favors banks and utilities, Rohm showing rebound potential with upcoming drivers.

Micron's gains from potential DDR5 price hikes could boost Micronics; Defence-related stocks are in focus with Kishida replacement candidates both...