Japan Specialist

Mark Chadwick

Equity Bottom-Up

Mitsubishi Heavy Industries / Equity Bottom-Up

<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

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Heavily sold AI plays such as Ibiden, Advantest and Kokusai look likely to continue higher given the more constructive outlook in Iran and lower oil to start.</li>
<li>Amazon's AWS growth beat validates its AI spend, offering a positive read-through for Japan's SPE and semi-caps.</li>
<li>Westinghouse Electric Company applying for an IPO in the US should help put focus and improve valuation clarity for Mitsubishi Heavy Industries and Japan Steel Works.</li>
</ul>


Heavily sold AI plays such as Ibiden, Advantest and Kokusai look likely to continue higher given the more constructive outlook in Iran and lower oil to start.
Amazon's AWS growth beat validates its AI spend, offering a positive read-through for Japan's SPE and semi-caps.
Westinghouse Electric Company applying for an IPO in the US should help put focus and improve valuation clarity for Mitsubishi Heavy Industries and Japan Steel Works.


Japan Morning Connection: Risk-On Sentiment Remains as Trump Holds off on More Attacks

<ul>
<li>ASML's numbers failed to lift US semi-caps overnight, with Kospi futures pointing -4.4% lower. A dour tone for SPE.</li>
<li>TSMC will report today, so expect to see semi-cap fluctuations based on their capex commentary.</li>
<li>Mitsubishi Heavy may see interest after news that it is shipping cooling systems to NVDA's DSX.</li>
</ul>


ASML's numbers failed to lift US semi-caps overnight, with Kospi futures pointing -4.4% lower. A dour tone for SPE.
TSMC will report today, so expect to see semi-cap fluctuations based on their capex commentary.
Mitsubishi Heavy may see interest after news that it is shipping cooling systems to NVDA's DSX.


Japan Morning Connection: SPE Set to Give Back Yesterday's Gains with Memory Selloff Overnight

<ul>
<li>MoD set to designate China as Japan's most serious concern in upcoming white paper. MHI, KHI, IHI and JSW worth watching as retail looks for new plays.</li>
<li>SMCI announcing plans to raise $7 billion to meet server orders may help lift Nidec who supplies their cooling modules.</li>
<li>Sumitomo Forestry -31% YTD may get some relief from homebuilder strength in the US overnight.</li>
</ul>


MoD set to designate China as Japan's most serious concern in upcoming white paper. MHI, KHI, IHI and JSW worth watching as retail looks for new plays.
SMCI announcing plans to raise $7 billion to meet server orders may help lift Nidec who supplies their cooling modules.
Sumitomo Forestry -31% YTD may get some relief from homebuilder strength in the US overnight.


Japan Morning Connection: Defense in Focus as MoD Is Set to Name China as Most Serious Concern

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 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

Japan Morning Connection: Risk-On Sentiment Remains as Trump Holds off on More Attacks

Heavily sold AI plays such as Ibiden, Advantest and Kokusai, look likely to continue higher despite the missed US tape given the more constructive...

Andrew Jackson

Japan Morning Connection: SPE Set to Give Back Yesterday's Gains with Memory Selloff Overnight

SPE names may give back yesterday's gains as ASML's numbers fail to lift US peers. TSMC will report today, so expect to see semi-cap fluctuations...

Andrew Jackson

Japan Morning Connection: Defense in Focus as MoD Is Set to Name China as Most Serious Concern

Markets remain gun-shy ahead of SpaceX IPO this week. Defense heavies worth watching as MoD prepares to flag China as most serious concern in...

Andrew Jackson

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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

Japan Morning Connection: Risk-On Sentiment Remains as Trump Holds off on More Attacks

Heavily sold AI plays such as Ibiden, Advantest and Kokusai, look likely to continue higher despite the missed US tape given the more constructive...

Andrew Jackson

Japan Morning Connection: SPE Set to Give Back Yesterday's Gains with Memory Selloff Overnight

SPE names may give back yesterday's gains as ASML's numbers fail to lift US peers. TSMC will report today, so expect to see semi-cap fluctuations...

Andrew Jackson

Japan Morning Connection: Defense in Focus as MoD Is Set to Name China as Most Serious Concern

Markets remain gun-shy ahead of SpaceX IPO this week. Defense heavies worth watching as MoD prepares to flag China as most serious concern in...

Andrew Jackson

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...