Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Securities analyst covering electronics, precision equipment & robotics, engineering, construction, transport and other sectors for more than 25 years in Japan and 3 years in Korea. Permanent resident of Japan.

Senior Technology Analyst, Japanese Equities

Advantest (6857 JP): 3Q Results Point to Further Growth in 2022

Advantest – Upside and Downside Scenarios

Advantest – That Time in the Cycle When Orders Apparently Stop Being Important

May Semiconductor Revenues Break a Record Once Again

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

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

Advantest's 1Q results were very strong, with sales up 45.5%, operating profit up 94.1% and net profit up 83.4% year-on-year. New orders were up 2.6x, resulting in a Book-to-Bill ratio of 1.7x.Orders, sales and profit guidance were raised by double-digits. Management now expects operating profit to rise by more than 40% in FY Mar-22. Previous guidance was for an increase of 20%. Quarterly orders may have peaked, but demand drivers for semiconductor test equipment - smartphone, high performance computing, automotive and industrial - should remain strong as the semiconductor shortage is overcome and intense competition between semiconductor producing countries continues.As Jim Handy wrote in <a href="https://www.smartkarma.com/insights/may-semiconductor-revenues-break-a-record-once-again" target="_blank" data-smartkarma-citation="insights:54199" rel="noopener">May Semiconductor Revenues Break a Record Once Again</a> : The SIA has released May semiconductor revenue statistics and the month broke all records for both revenues and unit shipments.  This is a continuation of the trend that this analyst has been reporting on since this time last year.  It appears that there is still plenty of strength in this market to allow further records to be broken.We maintain our ¥12,000 share price target for Advantest, which indicates upside potential of 23%. Plans for a 5.1% share buy-back and a lagging performance vs. other top Japanese semiconductor equipment stocks support our bullish view.

Advantest's 1Q results were very strong, with sales up 45.5%, operating profit up 94.1% and net profit up 83.4% year-on-year. New orders were up 2.6x, resulting in a Book-to-Bill ratio of 1.7x.Orders, sales and profit guidance were raised by double-digits. Management now expects operating profit to rise by more than 40% in FY Mar-22. Previous guidance was for an increase of 20%. Quarterly orders may have peaked, but demand drivers for semiconductor test equipment - smartphone, high performance computing, automotive and industrial - should remain strong as the semiconductor shortage is overcome and intense competition between semiconductor producing countries continues.As Jim Handy wrote in May Semiconductor Revenues Break a Record Once Again : The SIA has released May semiconductor revenue statistics and the month broke all records for both revenues and unit shipments.  This is a continuation of the trend that this analyst has been reporting on since this time last year.  It appears that there is still plenty of strength in this market to allow further records to be broken.We maintain our ¥12,000 share price target for Advantest, which indicates upside potential of 23%. Plans for a 5.1% share buy-back and a lagging performance vs. other top Japanese semiconductor equipment stocks support our bullish view.

Advantest (6857 JP): Very Strong 1Q, Guidance Raised

Advantest Corp

Advantest (6857 JP): Very Strong 1Q, Guidance Raised