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

<ul>
<li>The weak yen should add several billion to operating profit this fiscal year, helping the company meet or exceed guidance.</li>
<li>Medical Systems, which were once barely profitable, generated a 9.1% operating margin last year due to growing service revenues and a better product mix.</li>
<li>The share price should continue to hold up in a declining market.</li>
</ul>


The weak yen should add several billion to operating profit this fiscal year, helping the company meet or exceed guidance.
Medical Systems, which were once barely profitable, generated a 9.1% operating margin last year due to growing service revenues and a better product mix.
The share price should continue to hold up in a declining market.


Shimadzu (7701 JP): Weak Yen Supports Guidance

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>There are 49 - mostly firm - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.</li>
<li>Two new deals this week: <a href="https://www.smartkarma.com/entities/frasers-hospitality-trust" target="_blank" data-smartkarma-citation="entities:913:1" rel="noopener">Frasers Hospitality Trust (FHT SP)</a>'s Scheme, and  <a href="https://www.smartkarma.com/entities/pfizer-inc" target="_blank" data-smartkarma-citation="entities:1131:1" rel="noopener">Pfizer Inc (PFE US)</a>'s Offer for <a href="https://www.smartkarma.com/entities/narhex-life-sciences-ltd" target="_blank" data-smartkarma-citation="entities:9728:1" rel="noopener">Resapp Health (RAP AU)</a>.</li>
<li>Key updates took place for: <a href="https://www.smartkarma.com/entities/link-administration-holdings-ltd" target="_blank" data-smartkarma-citation="entities:970:1" rel="noopener">Link Administration (LNK AU)</a>, <a href="https://www.smartkarma.com/entities/virtus-health-ltd" target="_blank" data-smartkarma-citation="entities:14776:1" rel="noopener">Virtus Health (VRT AU)</a>, <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a>, <a href="https://www.smartkarma.com/entities/kito-corporation" target="_blank" data-smartkarma-citation="entities:19512:1" rel="noopener">Kito Corporation (6409 JP)</a>, and <a href="https://www.smartkarma.com/entities/hwa-hong-corp-ltd" target="_blank" data-smartkarma-citation="entities:6648:1" rel="noopener">Hwa Hong Corp (HWAH SP)</a>.</li>
</ul>


There are 49 - mostly firm - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals this week: Frasers Hospitality Trust (FHT SP)'s Scheme, and  Pfizer Inc (PFE US)'s Offer for Resapp Health (RAP AU).
Key updates took place for: Link Administration (LNK AU), Virtus Health (VRT AU), Toyo Construction (1890 JP), Kito Corporation (6409 JP), and Hwa Hong Corp (HWAH SP).


Asia-Pac Weekly Risk Arb Wrap: ResApp Health, Kto Corp, Link Admin, Toyo, Fraser Hospitality

Travis Lundy

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nissui-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:19243:1" rel="noopener">Nissui Pharmaceutical (4550 JP)</a> has been cheap for years. Years and years and years. </li>
<li>It has traded at negative Enterprise Value for almost all of the past year. </li>
<li>Now <a href="https://www.smartkarma.com/entities/shimadzu-corp" target="_blank" data-smartkarma-citation="entities:17679:1" rel="noopener">Shimadzu Corp (7701 JP)</a> is taking it over and heavily indebted parent <a href="https://www.smartkarma.com/entities/nippon-suisan-kaisha-ltd" target="_blank" data-smartkarma-citation="entities:5095:1" rel="noopener">Nippon Suisan Kaisha (1332 JP)</a> is letting it go.</li>
</ul>



Nissui Pharmaceutical (4550 JP) has been cheap for years. Years and years and years. 
It has traded at negative Enterprise Value for almost all of the past year. 
Now Shimadzu Corp (7701 JP) is taking it over and heavily indebted parent Nippon Suisan Kaisha (1332 JP) is letting it go.


Shimadzu (7701) To Buy Out Nissui Pharma (4550) In Tender Offer

<ul>
<li>In early February 2022, Silchester International Investors (according to its website) sent letters to four low-ROE-earning Japanese regional banks proposing a new dividend policy.</li>
<li>The management and boards of each bank rejected the policy proposal though two of the four had upped their proposed dividend or changed policy prior, and two upped it afterwards.</li>
<li>While <a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto (8369 JP)</a> is the biggie, <a href="https://www.smartkarma.com/entities/shiga-bank-ltd" target="_blank" data-smartkarma-citation="entities:18665:1" rel="noopener">Shiga Bank (8366 JP)</a> is another one with significant equity holdings. </li>
</ul>


In early February 2022, Silchester International Investors (according to its website) sent letters to four low-ROE-earning Japanese regional banks proposing a new dividend policy.
The management and boards of each bank rejected the policy proposal though two of the four had upped their proposed dividend or changed policy prior, and two upped it afterwards.
While Bank of Kyoto (8369 JP) is the biggie, Shiga Bank (8366 JP) is another one with significant equity holdings. 


JAPAN ACTIVISM:  Silchester Goes After Shiga Bank

<ul>
<li>Sales of analytical and measuring instruments, medical systems and industrial machinery are all doing well. Aircraft equipment lags, but should improve next fiscal year.</li>
<li>Guidance has been raised three times and now calls for an 8% increase in sales and a 23% increase in operating profit in FY Mar-22.</li>
<li>Not compellingly cheap, but worth looking at from a long-term perspective.</li>
</ul>


Sales of analytical and measuring instruments, medical systems and industrial machinery are all doing well. Aircraft equipment lags, but should improve next fiscal year.
Guidance has been raised three times and now calls for an 8% increase in sales and a 23% increase in operating profit in FY Mar-22.
Not compellingly cheap, but worth looking at from a long-term perspective.


Shimadzu (7701 JP): Excessive Valuation Gone, Business Doing Well

Japan

Shimadzu Corporation is a precision tools and equipment maker.  The Company develops, manufactures, and sells analytical and measuring instruments, medical systems, and  aircraft and industrial equipment.  Shimadzu researches, develops, and markets the products through its related companies in Japan, the US, the UK, and China.

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Shimadzu Corp (7701 JP)

Shimadzu (7701 JP): Weak Yen Supports Guidance

Weaker yen should add several billion yen to OP, helping meet or exceed guidance. All divisions contributing to higher OP, especially Medical....

Scott Foster

Asia-Pac Weekly Risk Arb Wrap: ResApp Health, Kto Corp, Link Admin, Toyo, Fraser Hospitality

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Shimadzu (7701) To Buy Out Nissui Pharma (4550) In Tender Offer

Nissui (1332) is finally letting go of its perpetually cash-rich subsidiary Nissui Pharma (4550) in a weird multi-step tender which is tough to...

Travis Lundy

JAPAN ACTIVISM: Silchester Goes After Shiga Bank

Silchester Int'l Investors has written letters to four regional banks where it holds large stakes. The goal appears to be to urge public debate of...

Travis Lundy

Shimadzu (7701 JP): Excessive Valuation Gone, Business Doing Well

Analytical instruments, medical and industrial doing well. Guidance raised for the 3rd time. Down from peak valuation. Not compellingly cheap, but...

Scott Foster

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