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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.

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/5439" target="_blank" data-smartkarma-citation="entities:5439:1">Subaru Corp (7270 JP)</a> announced a downward revision to forecasts after market close. Revenue was revised down by 1.6%, but the shocker was a 44.5% reduction in OP guidance for the half on account of quality-related expenses.</p><p>This essentially means 2Q revenue was about ¥753.9bn and OP was about ¥3.4bn vs. consensus at ¥795.1bn and ¥74.9bn respectively. The stock is trading at about 9.5x PE, a premium to peers and this development creates significant downside risks.</p>

Subaru Corp (7270 JP) announced a downward revision to forecasts after market close. Revenue was revised down by 1.6%, but the shocker was a 44.5% reduction in OP guidance for the half on account of quality-related expenses.This essentially means 2Q revenue was about ¥753.9bn and OP was about ¥3.4bn vs. consensus at ¥795.1bn and ¥74.9bn respectively. The stock is trading at about 9.5x PE, a premium to peers and this development creates significant downside risks.

Subaru: Downward Revision to 1H on Quality Costs Is Sharp Negative Surprise