Japan/Asia Long-Short, LightStream Research

Mio Kato

Over 15 years analysing Japanese and Asian stocks from a long/short perspective

I focus on cyclically driven sectors such as Gaming, Factory Automation and Autos

An eclectic background as a long-short analyst, upper management at a financial data startup through its listing, and as the founder of a team analysing big/alternative data, all of which supports independent and differentiated views... we hope

An appreciation for Mathematics drives the development of a "Micro-Quantamental" process which can provide a data-driven, historically-informed and semi-automated foundation upon which to layer more qualitative and judgemental analysis, thus improving investment decision-making speed and accuracy

Japan/Asia Long-Short

Fanuc – Great Results but FA Segment Continues to Worry Us

🇯🇵 JAPAN • Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​​​​​​​​​27 Fanuc, Shin-Etsu....

Yaskawa – Previewing 1Q Earnings With Data Analysis

Yaskawa – Developed Market Deceleration Striking

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>We spoke to Yaskawa this afternoon to get further colour on regional trends within its businesses. In our last note we said:</p><blockquote><ul><li>We would also note that margins for the motion control segment have also started outperforming our model again. <ul>
<li>The previous peak in China resulted in very strong outperformance compared to our earnings model and given that the current nascent recovery is also very China-focused, it stands to reason that we could see outperformance again.</li>
<li>Due to these positive moves at the underlying OPM level, we believe our thinking that OP could exceed ¥30bn for the fiscal year is not unrealistic. Consensus at ¥24.4bn is too low here.</li>
</ul>
</li></ul></blockquote><p>Consensus has belatedly moved up to ¥28.1bn for estimates made after 3Q earnings, following the typical pattern of being just slightly above guidance which has now moved up to ¥27.2bn from ¥24.2bn. We stick with our previous estimate and expect OP to come in slightly above ¥30bn for the year. This should be both a positive surprise and nowhere close to being enough to justify current prices. The question then is how to trade this.</p>

We spoke to Yaskawa this afternoon to get further colour on regional trends within its businesses. In our last note we said:We would also note that margins for the motion control segment have also started outperforming our model again. 
The previous peak in China resulted in very strong outperformance compared to our earnings model and given that the current nascent recovery is also very China-focused, it stands to reason that we could see outperformance again.
Due to these positive moves at the underlying OPM level, we believe our thinking that OP could exceed ¥30bn for the fiscal year is not unrealistic. Consensus at ¥24.4bn is too low here.

Consensus has belatedly moved up to ¥28.1bn for estimates made after 3Q earnings, following the typical pattern of being just slightly above guidance which has now moved up to ¥27.2bn from ¥24.2bn. We stick with our previous estimate and expect OP to come in slightly above ¥30bn for the year. This should be both a positive surprise and nowhere close to being enough to justify current prices. The question then is how to trade this.

Yaskawa – Overvalued, But Is It Time to Long Yaskawa, Short Fanuc Again?

Yaskawa Electric

Yaskawa – Overvalued, But Is It Time to Long Yaskawa, Short Fanuc Again?