Equity Analyst

Gervin Gayan

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

Boeing 737 Max Vs Airbus A320neo 
The increase in the oil price and price competition between airline operators (especially in the case of short- distance flights) has highlighted the need for the latest generation of fuel-efficient aircraft. Therefore, narrow bodies (single-aisle) commercial aircraft are increasingly playing a vital role in the commercial aircraft market (currently 65% -70% of the commercial aircraft order backlog is from single aisles) with Boeing’s 737 Max and Airbus’ A320neo dominating that market. 
Asia/Pacific and Europe are the top two regions for A320neo aircraft on order, while 737MAX orders are higher in North America. 
Globally, there are about 4,361 Neos on order versus 3,356 MAXs. There are more Neos than MAXs in service in Asia Pacific, Europe and Latin America, but the reverse is true in North America, the Middle East and Africa (where order numbers are low).
There are 1,665 A320neo orders and 1,582 737MAX orders with no specified region. This is either because the operating airline has not been disclosed, or because the orders are for lessors, with no operator yet identified.
The 737-order backlog currently stands at around 9 years. The backlog has only 200 orders for older models, while 95% of the order backlog comprises the 737 MAX series. The A320 backlog is 12 years (based on 2017 delivery numbers and current outstanding orders). Increases in production rates could help to ease the backlog, but problems with engine delivery work against this. The aircraft integrate specially designed next-generation engines which are built by Pratt and Whitney and CFM international (a JV between GE and Safran Aircraft Engines). 
<table class="table table-striped">
<tbody>
<tr>
<td style="text-align: center;">
Family
</td>
<td style="text-align: center;">
Old Generation
</td>
<td style="text-align: center;">
New Generation
</td>
</tr>
<tr>
<td rowspan="2" style="text-align: center;">

Boeing 737
</td>
<td style="text-align: center;">
CFM56-7B
</td>
<td rowspan="2" style="text-align: center;">
CFM LEAP 1B
</td>
</tr>
<tr>
<td style="text-align: center;">
PW6000A
</td>
</tr>
<tr>
<td rowspan="2" style="text-align: center;">

Airbus A320
</td>
<td style="text-align: center;">
CFM56-5B
</td>
<td style="text-align: center;">
CFM LEAP 1A
</td>
</tr>
<tr>
<td style="text-align: center;">
IAE V2500
</td>
<td style="text-align: center;">
PW1000G
</td>
</tr>
</tbody>
</table>
<div class="content-remarks">
Source: Company Disclosure
</div>
PW1000G Vs CFM LEAP 1A
<table class="table table-striped">
<tbody>
<tr>
<td style="text-align: center;">
PARAMETER
</td>
<td style="text-align: center;">
CFM LEAP 1A
</td>
<td style="text-align: center;">
PW1000G
</td>
</tr>
<tr>
<td>
Thrust
</td>
<td style="text-align: center;">
Up to 32,900 lbs
</td>
<td style="text-align: center;">
24,000-33,000 lbs (120.1 kN)
</td>
</tr>
<tr>
<td>
Bypass ratio
</td>
<td style="text-align: center;">
11:1
</td>
<td style="text-align: center;">
12:1
</td>
</tr>
<tr>
<td>
Architecture (stage count)
</td>
<td style="text-align: center;">
1-3-10-2-7
</td>
<td style="text-align: center;">
1-G-3-8-2-3
</td>
</tr>
<tr>
<td>
Fan diameter
</td>
<td style="text-align: center;">
78 inches (1981 mm)
</td>
<td style="text-align: center;">
81 inches (2057mm)
</td>
</tr>
<tr>
<td>
Overall length
</td>
<td style="text-align: center;">
3,400mm (estimated)
</td>
<td style="text-align: center;">
3,800mm (estimated)
</td>
</tr>
<tr>
<td>
High pressure spool RPM (N2)
</td>
<td style="text-align: center;">
15,000 (estimated)
</td>
<td style="text-align: center;">
18,000-20,000 (estimated)
</td>
</tr>
<tr>
<td>
Low pressure spool RM (N1)
</td>
<td style="text-align: center;">
4,500 (estimated)
</td>
<td style="text-align: center;">
10,500 (estimated)
</td>
</tr>
<tr>
<td>
Fan RPM
</td>
<td style="text-align: center;">
4,500 (estimated)
</td>
<td style="text-align: center;">
3,500 (estimated)
</td>
</tr>
<tr>
<td>
Overall pressure ratio
</td>
<td style="text-align: center;">
40:1
</td>
<td style="text-align: center;">
Unknown
</td>
</tr>
<tr>
<td>
Engine weight
</td>
<td style="text-align: center;">
Unknown
</td>
<td style="text-align: center;">
Unknown
</td>
</tr>
</tbody>
</table>
<div class="content-remarks">
Source: Company Disclosure
</div>

Boeing 737 Max Vs Airbus A320neo 
The increase in the oil price and price competition between airline operators (especially in the case of short- distance flights) has highlighted the need for the latest generation of fuel-efficient aircraft. Therefore, narrow bodies (single-aisle) commercial aircraft are increasingly playing a vital role in the commercial aircraft market (currently 65% -70% of the commercial aircraft order backlog is from single aisles) with Boeing’s 737 Max and Airbus’ A320neo dominating that market. 
Asia/Pacific and Europe are the top two regions for A320neo aircraft on order, while 737MAX orders are higher in North America. 
Globally, there are about 4,361 Neos on order versus 3,356 MAXs. There are more Neos than MAXs in service in Asia Pacific, Europe and Latin America, but the reverse is true in North America, the Middle East and Africa (where order numbers are low).
There are 1,665 A320neo orders and 1,582 737MAX orders with no specified region. This is either because the operating airline has not been disclosed, or because the orders are for lessors, with no operator yet identified.
The 737-order backlog currently stands at around 9 years. The backlog has only 200 orders for older models, while 95% of the order backlog comprises the 737 MAX series. The A320 backlog is 12 years (based on 2017 delivery numbers and current outstanding orders). Increases in production rates could help to ease the backlog, but problems with engine delivery work against this. The aircraft integrate specially designed next-generation engines which are built by Pratt and Whitney and CFM international (a JV between GE and Safran Aircraft Engines). 




Family


Old Generation


New Generation





Boeing 737


CFM56-7B


CFM LEAP 1B




PW6000A





Airbus A320


CFM56-5B


CFM LEAP 1A




IAE V2500


PW1000G





Source: Company Disclosure

PW1000G Vs CFM LEAP 1A




PARAMETER


CFM LEAP 1A


PW1000G




Thrust


Up to 32,900 lbs


24,000-33,000 lbs (120.1 kN)




Bypass ratio


11:1


12:1




Architecture (stage count)


1-3-10-2-7


1-G-3-8-2-3




Fan diameter


78 inches (1981 mm)


81 inches (2057mm)




Overall length


3,400mm (estimated)


3,800mm (estimated)




High pressure spool RPM (N2)


15,000 (estimated)


18,000-20,000 (estimated)




Low pressure spool RM (N1)


4,500 (estimated)


10,500 (estimated)




Fan RPM


4,500 (estimated)


3,500 (estimated)




Overall pressure ratio


40:1


Unknown




Engine weight


Unknown


Unknown





Source: Company Disclosure


737 MAXとA320neoの生産目標はLEAPエンジン不足により達成できない可能性が高い

Boeing Co

737 MAXとA320neoの生産目標はLEAPエンジン不足により達成できない可能性が高い