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>Nidec has become an auto parts and factory automation company and should be valued as such. At 24x EPS guidance for FY Mar-23, the shares do not look particularly cheap.</li>
<li>1H results were good, but heavy up-front investment in e-axle traction motor systems for electric vehicles points to deferred gratification for shareholders. </li>
<li>Recession is starting to bite, the Yen is up and Japanese interest rates have only started to rise. Be careful when buying for long-term growth.</li>
</ul>


Nidec has become an auto parts and factory automation company and should be valued as such. At 24x EPS guidance for FY Mar-23, the shares do not look particularly cheap.
1H results were good, but heavy up-front investment in e-axle traction motor systems for electric vehicles points to deferred gratification for shareholders. 
Recession is starting to bite, the Yen is up and Japanese interest rates have only started to rise. Be careful when buying for long-term growth.


Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Private Capital Markets

<ul>
<li>ROKAE Robotics is a Beijing-based supplier of next-generation flexible cobots and lightweight industrial robots backed by Chinese conglomerate New Hope Group and VC investors. </li>
<li>ROKAE Robotics has raised a total of ~CN¥900M in funding over 5 rounds. The last round was a CN¥400M private equity in May-21 that was led by New Hope Group. </li>
<li>The company operates a manufacturing industrial park in Shandong province with an annual output of 50,000+ robots. </li>
</ul>


ROKAE Robotics is a Beijing-based supplier of next-generation flexible cobots and lightweight industrial robots backed by Chinese conglomerate New Hope Group and VC investors. 
ROKAE Robotics has raised a total of ~CN¥900M in funding over 5 rounds. The last round was a CN¥400M private equity in May-21 that was led by New Hope Group. 
The company operates a manufacturing industrial park in Shandong province with an annual output of 50,000+ robots. 


ROKAE Robotics: Founder-Led Supplier of Flexible Cobots and Lightweight Industrial Robots

Japan Specialist

Mark Chadwick

<ul>
<li>Yaskawa's order momentum has peaked. On a constant currency basis, orders growth was -6% sequentially</li>
<li>Margins for the key Motion Control segment were 160bps lower in the quarter compared to a year ago</li>
<li>A minor revision down relies on aggressive FX assumptions for the 2H. We feel there is another downgrade to come. Stay Bearish</li>
</ul>


Yaskawa's order momentum has peaked. On a constant currency basis, orders growth was -6% sequentially
Margins for the key Motion Control segment were 160bps lower in the quarter compared to a year ago
A minor revision down relies on aggressive FX assumptions for the 2H. We feel there is another downgrade to come. Stay Bearish


Yaskawa (6506 JP) | Constant Currency Concerns

<ul>
<li>Q1 OP +8%, but core OP (pre-adjustments) fell 18% YoY on significant decline in profitability </li>
<li>Bulls may point to the surprising strength in orders, but the boost from China re-opening and weaker yen are not reflective of the underlying outlook</li>
<li>We think Yaskawa will be hard-pressed to make full year guidance of ¥72b. Stay bearish for now</li>
</ul>


Q1 OP +8%, but core OP (pre-adjustments) fell 18% YoY on significant decline in profitability 
Bulls may point to the surprising strength in orders, but the boost from China re-opening and weaker yen are not reflective of the underlying outlook
We think Yaskawa will be hard-pressed to make full year guidance of ¥72b. Stay bearish for now


Yaskawa Electric (6506) | Don’t Be Fooled by the “strong” Q1 Print

<ul>
<li>Stay short ahead of Q1 results. Full year guidance remains too high and will likely be cut later this year</li>
<li>Yaskawa remains a cyclical stock that correlates with the SOX index - higher interest rates are impacting valuation multiples</li>
<li>We see 20% downside risk towards 3x price to book</li>
</ul>


Stay short ahead of Q1 results. Full year guidance remains too high and will likely be cut later this year
Yaskawa remains a cyclical stock that correlates with the SOX index - higher interest rates are impacting valuation multiples
We see 20% downside risk towards 3x price to book


Yaskawa (6506) | Further 20% Downside on Higher Rate Cycle

Japan

YASKAWA Electric Corporation manufactures and markets servomotors, controllers, inverters, and industrial robots.  The Company's products include spindle controllers, computerized numerical control (CNC) systems, and system engineering.

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Yaskawa Electric (6506 JP)

Nidec (6594 JP): New Valuation Benchmark

It is fashionable to criticize Nidec's business model, but valuation compression is the greater risk. Japanese interest rates have started to rise...

Scott Foster

ROKAE Robotics: Founder-Led Supplier of Flexible Cobots and Lightweight Industrial Robots

ROKAE Robotics is one of our top picks in China's industrial robotics segment. Beijing-based robotics firm focuses on flexible cobots, lightweight...

Andrei Zakharov

Yaskawa (6506 JP) | Constant Currency Concerns

We remain Bearish on Yaskawa. Q2 numbers were ok in nominal terms but look far less exciting on a constant currency basis. Despite a 22% decline in...

Mark Chadwick

Yaskawa Electric (6506) | Don’t Be Fooled by the “strong” Q1 Print

We remain Bearish on Yaskawa. Although headline Q1 earnings and orders looked OK, we think underlying trends are weaker. We expect a downward...

Mark Chadwick

Yaskawa (6506) | Further 20% Downside on Higher Rate Cycle

Yaskawa rallied +9% off the lows made in early May, on hopes for a normalization in China post COVID-19 lockdown. However, we believe that global...

Mark Chadwick

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