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.

Event-Driven

We previously highlighted the strong skew between names which have a heavy weighting in Topix vs. those which have a heavy weighting in the Nikkei. Given extreme looking skews even in individual names it does not seem unreasonable that some relative value fund(s) are exiting positions aggressively prior to what could be a key long weekend for Japan with potentially heavy volatility on Monday. We examine some striking performance discrepancies below.

We previously highlighted the strong skew between names which have a heavy weighting in Topix vs. those which have a heavy weighting in the Nikkei. Given extreme looking skews even in individual names it does not seem unreasonable that some relative value fund(s) are exiting positions aggressively prior to what could be a key long weekend for Japan with potentially heavy volatility on Monday. We examine some striking performance discrepancies below.

What Is Getting Blown Out of Portfolios Before the Long Weekend in Japan?

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Equity Bottom-Up

Screen Holding's share price has rebounded by 87% from its 52-week low at the beginning of June, a performance comparable to that of other leading semiconductor production equipment (SPE) makers including Tokyo Electron, Applied Materials, Lam Research and KLA. At ¥6,690 (Friday, September 20 closing price), Screen is selling at 18.4x management's EPS guidance for FY Mar-20. The latest wafer fab equipment forecast from industry organization SEMI, announced during the Semicon West trade show in July, has worldwide SPE sales falling by 18% to $52.7 billion in calendar 2019 and then rebounding by 12% to 58.8 billion in 2020. SEMI also expects 300mm fab equipment spending to gradually recover in 2020 and reach a new record high of more than $60 billion in 2021. Adding 200mm equipment spending in China and elsewhere might take total sales back to the $64.5 billion peak reached in 2018. Screen's consolidated sales were down 19.7% year-on-year and the company dropped into the red in the three months to June, but new SPE orders rebounded, rising 17.0% from 4Q of FY Mar-19 and 18.6% year-on-year. New orders for equipment used in the production of flat panel displays were also up.After a downward revision in July, management is now guiding for an 11.0% decline in consolidated sales, a 15.7% decline in operating profit and a 5.9% decline in net profit in FY Mar-20. This implies rising sales and profits during the remainder of this fiscal year.Risks include a slowing global economy, the possibility that cell-phone sales will remain weak until 5G wireless service is widely available, and the ongoing trade war. SPE shares have risen so far so fast that a period of consolidation seems likely.

Screen Holding's share price has rebounded by 87% from its 52-week low at the beginning of June, a performance comparable to that of other leading semiconductor production equipment (SPE) makers including Tokyo Electron, Applied Materials, Lam Research and KLA. At ¥6,690 (Friday, September 20 closing price), Screen is selling at 18.4x management's EPS guidance for FY Mar-20. The latest wafer fab equipment forecast from industry organization SEMI, announced during the Semicon West trade show in July, has worldwide SPE sales falling by 18% to $52.7 billion in calendar 2019 and then rebounding by 12% to 58.8 billion in 2020. SEMI also expects 300mm fab equipment spending to gradually recover in 2020 and reach a new record high of more than $60 billion in 2021. Adding 200mm equipment spending in China and elsewhere might take total sales back to the $64.5 billion peak reached in 2018. Screen's consolidated sales were down 19.7% year-on-year and the company dropped into the red in the three months to June, but new SPE orders rebounded, rising 17.0% from 4Q of FY Mar-19 and 18.6% year-on-year. New orders for equipment used in the production of flat panel displays were also up.After a downward revision in July, management is now guiding for an 11.0% decline in consolidated sales, a 15.7% decline in operating profit and a 5.9% decline in net profit in FY Mar-20. This implies rising sales and profits during the remainder of this fiscal year.Risks include a slowing global economy, the possibility that cell-phone sales will remain weak until 5G wireless service is widely available, and the ongoing trade war. SPE shares have risen so far so fast that a period of consolidation seems likely.

Screen Holdings (7735 JP): Anticipated Recovery Largely Discounted

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Quantitative Analysis

• RELATIVE PRICE SCORE •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/098/178/original/2019-09-06_09-42-35.png?1567730614" class="editor-image img-responsive" data-smartkarma-image-id="98178"></figure><div class="content-caption">Source: Japan Analytics</div>INTRODUCTION - The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are thus on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company outlier thresholds are set at +4 &amp; -2 and equate to the top and bottom first-to-second percentiles of historical observations from which mean reversion takes a matter of months. RPS outliers with a Score of greater than 10.0 are rare outside of the 2000 tech 'bubble'. <a href="https://www.smartkarma.com/entities/lasertec-corp" target="_blank" data-smartkarma-citation="entities:4126:1" rel="noopener">Lasertec (6920 JP)</a> has just joined <a href="https://www.smartkarma.com/entities/goldwin-inc" target="_blank" data-smartkarma-citation="entities:410:1" rel="noopener">Goldwin (8111 JP)</a> in being only the second large-cap RPS 'ten-baggers' in the last twenty years. <div class="content-highlight">This insight updates our list of Overbought and Oversold companies, reviews the best and worst-performing companies in terms of RPS over the last three months and adds some specific comments on stocks on each category.</div><div></div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/098/046/original/2019-09-05_12-46-46.png?1567655232" class="editor-image img-responsive" data-smartkarma-image-id="98046"></figure><div class="content-caption">Source: Japan Analytics</div>STATISTICS - Currently, of the 3,706 listed companies for which monthly RPS data is available, 81 companies are 'Overbought', and 133 are 'Oversold' - 2.45% and 3.8%, respectively of the total. For the 737 companies with a market capitalisation of over ¥100b, there are 44 'Overbought' and 37 'Oversold' companies, 6% and 5%, respectively.<hr>• RELATIVE PRICE SCORE 'TOPS' •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/098/055/original/2019-09-05_13-06-30.png?1567656423" class="editor-image img-responsive" data-smartkarma-image-id="98055"></figure><div class="content-caption">Source: Japan Analytics</div>RPS 'TOPS' - In the last two years, 388 companies have achieved an RPS of '4' or more and the average Overbought 'persistence' is 42 days. 1.26% of the total of 1.94 million traded stock days were by companies with an RPS of over 4. For companies with a market capitalisation higher than ¥100b, the numbers are 95 companies and 74 days - demonstrating the superior persistence of large capitalisation companies in this regard. The chart above highlights the track record of all 95 large caps which are some point were Overbought in the last twenty-four months and illustrates the extreme outlier status of Goldwin and Lasertec.RPS NEGATIVE MEAN REVERSION - Some examples of RPS mean reversion in the last three months have been <a href="https://www.smartkarma.com/entities/suzuken-co-ltd" target="_blank" data-smartkarma-citation="entities:14996:1" rel="noopener">Suzuken (9987 JP)</a>, <a href="https://www.smartkarma.com/entities/infomart-corp" target="_blank" data-smartkarma-citation="entities:1301:1" rel="noopener">Infomart (2492 JP)</a>, <a href="https://www.smartkarma.com/entities/nichirei-corp" target="_blank" data-smartkarma-citation="entities:7168:1" rel="noopener">Nichirei (2871 JP)</a>, and <a href="https://www.smartkarma.com/entities/fancl-corp" target="_blank" data-smartkarma-citation="entities:15862:1" rel="noopener">Fancl (4921 JP)</a>. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/098/096/original/2019-09-05_16-25-39.png?1567668352" class="editor-image img-responsive" data-smartkarma-image-id="98096"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/098/097/original/2019-09-05_16-27-09.png?1567668441" class="editor-image img-responsive" data-smartkarma-image-id="98097"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/098/098/original/2019-09-05_16-28-42.png?1567668548" class="editor-image img-responsive" data-smartkarma-image-id="98098"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/098/099/original/2019-09-05_16-30-29.png?1567668640" class="editor-image img-responsive" data-smartkarma-image-id="98099"></figure><div class="content-caption">Source: Japan Analytics</div><hr>• RELATIVE PRICE SCORE 'BOTTOMS' •<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/098/056/original/2019-09-05_13-12-52.png?1567656806" class="editor-image img-responsive" data-smartkarma-image-id="98056"></figure><div class="content-caption">Source: Japan Analytics</div>
</div>RPS 'BOTTOMS' - 259 companies have seen their RPS fall to '-2' or below in the last two years, and the average Oversold 'persistence' is 83 days. 1.46% of the total of 1.94 million traded stock days were by companies with an RPS of less than -2.  For larger capitalisation companies, the numbers are 79 companies and 94 days. The chart above highlights the track record of the 79 large caps which are some point were Oversold in the last twenty-four months and illustrates the strong recovery in the REITs Sector and the continuing demise of Regional Banks.RPS POSITIVE MEAN REVERSION - Some recent examples of positive RPS mean reversions are <a href="https://www.smartkarma.com/entities/otsuka-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:12292:1" rel="noopener">Otsuka Holdings (4578 JP) </a>and <a href="https://www.smartkarma.com/entities/line-corp" target="_blank" data-smartkarma-citation="entities:22772:1" rel="noopener">LINE (3938 JP)</a>.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/098/100/original/2019-09-05_16-35-47.png?1567668972" class="editor-image img-responsive" data-smartkarma-image-id="98100"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/098/102/original/2019-09-05_16-36-50.png?1567669047" class="editor-image img-responsive" data-smartkarma-image-id="98102"></figure><div class="content-caption">Source: Japan Analytics</div>As we noted in our June <a href="https://www.smartkarma.com/insights/japan-relative-price-scores-overbought-oversold-companies-june-2019" target="_blank" data-smartkarma-citation="insights:30393" rel="noopener">Insight: -</a><blockquote><a href="https://www.smartkarma.com/entities/line-corp" target="_blank" data-smartkarma-citation="entities:22772:1" rel="noopener">LINE (3938 JP)</a>- Line has performed poorly since being featured in last year's Sohn Conference and has had negative and worsening Operating Income for each of the previous five quarters. Although there is a possibility of a double-bottom RPS 'bounce' and the company is now the most-Oversold non-financial large-cap over one year, there are no fundamental reasons to own the shares.   </blockquote>In the DETAIL section below, we list the current Very Overbought (RPS&gt;5), Too-Late-To-Buy (RPS &gt;4&lt;5) and Oversold (RPS &lt;-2) stocks as well as the most substantial three-month positive and negative changes in RPS.

• RELATIVE PRICE SCORE •Source: Japan AnalyticsINTRODUCTION - The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are thus on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company outlier thresholds are set at +4 &amp; -2 and equate to the top and bottom first-to-second percentiles of historical observations from which mean reversion takes a matter of months. RPS outliers with a Score of greater than 10.0 are rare outside of the 2000 tech 'bubble'. Lasertec (6920 JP) has just joined Goldwin (8111 JP) in being only the second large-cap RPS 'ten-baggers' in the last twenty years. This insight updates our list of Overbought and Oversold companies, reviews the best and worst-performing companies in terms of RPS over the last three months and adds some specific comments on stocks on each category.Source: Japan AnalyticsSTATISTICS - Currently, of the 3,706 listed companies for which monthly RPS data is available, 81 companies are 'Overbought', and 133 are 'Oversold' - 2.45% and 3.8%, respectively of the total. For the 737 companies with a market capitalisation of over ¥100b, there are 44 'Overbought' and 37 'Oversold' companies, 6% and 5%, respectively.• RELATIVE PRICE SCORE 'TOPS' •Source: Japan AnalyticsRPS 'TOPS' - In the last two years, 388 companies have achieved an RPS of '4' or more and the average Overbought 'persistence' is 42 days. 1.26% of the total of 1.94 million traded stock days were by companies with an RPS of over 4. For companies with a market capitalisation higher than ¥100b, the numbers are 95 companies and 74 days - demonstrating the superior persistence of large capitalisation companies in this regard. The chart above highlights the track record of all 95 large caps which are some point were Overbought in the last twenty-four months and illustrates the extreme outlier status of Goldwin and Lasertec.RPS NEGATIVE MEAN REVERSION - Some examples of RPS mean reversion in the last three months have been Suzuken (9987 JP), Infomart (2492 JP), Nichirei (2871 JP), and Fancl (4921 JP). Source: Japan Analytics• RELATIVE PRICE SCORE 'BOTTOMS' •
Source: Japan Analytics
RPS 'BOTTOMS' - 259 companies have seen their RPS fall to '-2' or below in the last two years, and the average Oversold 'persistence' is 83 days. 1.46% of the total of 1.94 million traded stock days were by companies with an RPS of less than -2.  For larger capitalisation companies, the numbers are 79 companies and 94 days. The chart above highlights the track record of the 79 large caps which are some point were Oversold in the last twenty-four months and illustrates the strong recovery in the REITs Sector and the continuing demise of Regional Banks.RPS POSITIVE MEAN REVERSION - Some recent examples of positive RPS mean reversions are Otsuka Holdings (4578 JP) and LINE (3938 JP).Source: Japan AnalyticsAs we noted in our June Insight: -LINE (3938 JP)- Line has performed poorly since being featured in last year's Sohn Conference and has had negative and worsening Operating Income for each of the previous five quarters. Although there is a possibility of a double-bottom RPS 'bounce' and the company is now the most-Oversold non-financial large-cap over one year, there are no fundamental reasons to own the shares.   In the DETAIL section below, we list the current Very Overbought (RPS&gt;5), Too-Late-To-Buy (RPS &gt;4&lt;5) and Oversold (RPS &lt;-2) stocks as well as the most substantial three-month positive and negative changes in RPS.

🇯🇵 Japan • September Relative Price Scores - Life at the Poles Part 2: Companies

The Trump Administration is reportedly considering controls on exports of semiconductor production equipment as part of its effort to derail Made in China 2025.
A report from Moody's states that such controls would "severely limit China's ability to develop greater self-sufficiency in chip manufacturing," and that "Outside of Applied, Lam and KLA, we believe alternative suppliers of the array of leading-edge semiconductor equipment that Chinese companies need to produce chips do not exist." 
This is not true. In Japan, the most obvious alternative suppliers include Tokyo Electron, Hitachi-High Technologies (8036 JP) and Screen Holdings [formerly Dainippon Screen] (7735 JP).
The Chinese take the threat very seriously, are likely to redouble efforts to develop their semiconductor equipment and materials industry, and are already talking with Japanese and European companies about alternative sources of supply. 
China accounts for about 20% of the total semiconductor equipment market. Stock prices already anticipate the end of the "super-cycle" that began two years ago, but if the Americans implement export controls, the psychological impact and the practical problem of changing suppliers could make things much worse.
Potential market share gains for Tokyo Electron and others would be something to consider once the bad news had been discounted.

The Trump Administration is reportedly considering controls on exports of semiconductor production equipment as part of its effort to derail Made in China 2025.
A report from Moody's states that such controls would "severely limit China's ability to develop greater self-sufficiency in chip manufacturing," and that "Outside of Applied, Lam and KLA, we believe alternative suppliers of the array of leading-edge semiconductor equipment that Chinese companies need to produce chips do not exist." 
This is not true. In Japan, the most obvious alternative suppliers include Tokyo Electron, Hitachi-High Technologies (8036 JP) and Screen Holdings [formerly Dainippon Screen] (7735 JP).
The Chinese take the threat very seriously, are likely to redouble efforts to develop their semiconductor equipment and materials industry, and are already talking with Japanese and European companies about alternative sources of supply. 
China accounts for about 20% of the total semiconductor equipment market. Stock prices already anticipate the end of the "super-cycle" that began two years ago, but if the Americans implement export controls, the psychological impact and the practical problem of changing suppliers could make things much worse.
Potential market share gains for Tokyo Electron and others would be something to consider once the bad news had been discounted.

Tokyo Electron (8035 JP): To Benefit from Trade War?

Having spoken to the company at length and thoroughly reviewed our long thesis for JDI, we present a deep dive into JDI's prospects.<ul><li>Apple orders are likely to drive a surge in utilisation rates throughout 2018. The company is going from facing 60% utilisation rates despite a 20% capacity reduction, to being forced to fully ramp-up production at the relatively new Hakusan facility in 1QFY03/19 in order to pre-build for the peak 3QFY03/19 season due to a lack of capacity. We thus believe an extremely sharp turn in fortunes is close.</li><li>Restructuring costs are being impacted by this reversal of fortunes as the Nikkei noted that the company's impairment charges may be JPY10-20bn lower than expected, reducing the expected JPY170bn restructuring charge for the year. It is not impossible that the final charges are even lower than the Nikkei suggests.</li><li>Supply-Demand could be affected by the disappointment surrounding the iPhone X which appears to be impacting supply growth for OLED, while LTPS LCD capacity is expected to grow at a much slower rate in future, suggesting that pricing pressure for mobile panels could ease. Better unit pricing for JDI's new Full Active panels should also help profitability.</li><li>Non-Mobile display volumes should grow as the company successfully commercialises the wide array of technologies it has developed in the last 12-18 months. 2in1 notebooks, VR and signage should contribute to sales, but we believe the big driver will be an acceleration in adoption of displays by mass market automobiles and a shift to LTPS panels raising unit prices.</li><li>Upside/Downside risks are numerous as the company is likely to announce equity financing shortly and near-term earnings results are likely to continue to disappoint. However, strengthening the company's balance sheet could improve sentiment despite dilution, and investment activity by auto-related companies such as Denso could also pose an upside risk. Buying a fall in the share price following dilutive equity finance would be the lowest risk trade in our opinion, but the stock is already trading at about JPY200 where it seems to have found a floor over the last year or so.</li></ul>Regarding today's Bloomberg news article regarding Apple's in-house development of MicroLED screens, we do not consider the news to be something which should greatly concern investors. The timeline (at least 3 years out, but most likely even more) should serve as further motivation for JDI to complete its transition to a more auto-focused company on time, while allowing it to take advantage of strong demand from Apple in the meantime. Assuming Apple is successful in commercialising the technology at an early stage (which is not a given) manufacturing cost would still be a significant issue. In our opinion, even assuming successful development, flexible OLED panels would probably be most at threat since they would have to see yields improve enough to become a low-cost option (in relative terms). If this did not occur, JDI's developments with LTPS LCD screens could leave OLED stuck in the middle.We are also somewhat cautious about Apple's attempts to bring so many things in-house at a time when there are signs of the smartphone market decelerating significantly and of consumer rejection of high ASPs. It is possible that Apple is trying to avoid the situation it is currently in where it is dependent on Samsung for OLED panel supply given the reported struggles of LGD in maintaining quality for its panels (such as for the Google Pixel 2). If Apple is successful, the greatest potential beneficiary is likely to be Hon Hai, perhaps in partnership with Innolux. Given Hon Hai and Apple's statements about making significant investments in the US, is a display fab in the works?Ultimately, we do not view this as being news which should particularly affect JDI. Its over-dependence on Apple has harmed the company in the past and while we feel that supplying Apple with high-quality but lower-cost panels for its cheaper models can continue to be attractive (essentially aiming to be the low-cost producer for high-end panels by utilising its strengths in the cheaper LTPS LCD technology), JDI should be accelerating its moves to diversify its revenue streams. Secondly, if MicroLED development proceeds smoothly, Apple may just decide to forego transitioning to OLED completely and stick to LCD displays until it transfers to MicroLED at some point. Given the rather insignificant differences between OLED and Full Active displays, it seems to us, well within Apple's ability to sell MicroLED as a holy grail technology while panning OLED as a low yield dead-end... if it were so inclined.

Having spoken to the company at length and thoroughly reviewed our long thesis for JDI, we present a deep dive into JDI's prospects.Apple orders are likely to drive a surge in utilisation rates throughout 2018. The company is going from facing 60% utilisation rates despite a 20% capacity reduction, to being forced to fully ramp-up production at the relatively new Hakusan facility in 1QFY03/19 in order to pre-build for the peak 3QFY03/19 season due to a lack of capacity. We thus believe an extremely sharp turn in fortunes is close.Restructuring costs are being impacted by this reversal of fortunes as the Nikkei noted that the company's impairment charges may be JPY10-20bn lower than expected, reducing the expected JPY170bn restructuring charge for the year. It is not impossible that the final charges are even lower than the Nikkei suggests.Supply-Demand could be affected by the disappointment surrounding the iPhone X which appears to be impacting supply growth for OLED, while LTPS LCD capacity is expected to grow at a much slower rate in future, suggesting that pricing pressure for mobile panels could ease. Better unit pricing for JDI's new Full Active panels should also help profitability.Non-Mobile display volumes should grow as the company successfully commercialises the wide array of technologies it has developed in the last 12-18 months. 2in1 notebooks, VR and signage should contribute to sales, but we believe the big driver will be an acceleration in adoption of displays by mass market automobiles and a shift to LTPS panels raising unit prices.Upside/Downside risks are numerous as the company is likely to announce equity financing shortly and near-term earnings results are likely to continue to disappoint. However, strengthening the company's balance sheet could improve sentiment despite dilution, and investment activity by auto-related companies such as Denso could also pose an upside risk. Buying a fall in the share price following dilutive equity finance would be the lowest risk trade in our opinion, but the stock is already trading at about JPY200 where it seems to have found a floor over the last year or so.Regarding today's Bloomberg news article regarding Apple's in-house development of MicroLED screens, we do not consider the news to be something which should greatly concern investors. The timeline (at least 3 years out, but most likely even more) should serve as further motivation for JDI to complete its transition to a more auto-focused company on time, while allowing it to take advantage of strong demand from Apple in the meantime. Assuming Apple is successful in commercialising the technology at an early stage (which is not a given) manufacturing cost would still be a significant issue. In our opinion, even assuming successful development, flexible OLED panels would probably be most at threat since they would have to see yields improve enough to become a low-cost option (in relative terms). If this did not occur, JDI's developments with LTPS LCD screens could leave OLED stuck in the middle.We are also somewhat cautious about Apple's attempts to bring so many things in-house at a time when there are signs of the smartphone market decelerating significantly and of consumer rejection of high ASPs. It is possible that Apple is trying to avoid the situation it is currently in where it is dependent on Samsung for OLED panel supply given the reported struggles of LGD in maintaining quality for its panels (such as for the Google Pixel 2). If Apple is successful, the greatest potential beneficiary is likely to be Hon Hai, perhaps in partnership with Innolux. Given Hon Hai and Apple's statements about making significant investments in the US, is a display fab in the works?Ultimately, we do not view this as being news which should particularly affect JDI. Its over-dependence on Apple has harmed the company in the past and while we feel that supplying Apple with high-quality but lower-cost panels for its cheaper models can continue to be attractive (essentially aiming to be the low-cost producer for high-end panels by utilising its strengths in the cheaper LTPS LCD technology), JDI should be accelerating its moves to diversify its revenue streams. Secondly, if MicroLED development proceeds smoothly, Apple may just decide to forego transitioning to OLED completely and stick to LCD displays until it transfers to MicroLED at some point. Given the rather insignificant differences between OLED and Full Active displays, it seems to us, well within Apple's ability to sell MicroLED as a holy grail technology while panning OLED as a low yield dead-end... if it were so inclined.

JDI: Giving Our Thesis a Full Active Refresh + Apple MicroLED Development

Japan

SCREEN Holdings Co Ltd.  manufactures and sell semiconductors, FPD devices, commercial printing and printed circuit boards(PCB). The company also provides additional services for its products.

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

SCREEN Holdings (7735 JP)

What Is Getting Blown Out of Portfolios Before the Long Weekend in Japan?

We previously highlighted the strong skew between names which have a heavy weighting in Topix vs. those which have a heavy weighting in the Nikkei....

Mio Kato