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: Orders Peaked in 1Q, Sector Share Prices Weak, This Could Be the Top

Fanuc: A Look at Valuation Post Strong 3Q

Fanuc's Structural Issues (3): Robotics Business Topline Doesn't Move the Needle for OP - Why?

Fanuc's Structural Issues (2): Brother's Speedio Seems to Be Catching up to the Robodrill

Fanuc's Structural Issues (1): Is the CNC Business Losing Its Edge?

Japanese and Asian equity long/short strategies

Uzabase

Specialising in Japanese and Asian equity long/short strategies with a focus on rigorous, but targeted quantitative analysis to temper evaluations of company strategy, potential and vision. At Uzabase, our team of analysts provides coverage of industry dynamics with a local Asian flavour on Speeda, our financial information platform. Going forward we are aiming to channel our focus toward thematic research on emerging industries and company research.

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/752" target="_blank" data-smartkarma-citation="entities:752:1">Fanuc Corp (6954 JP)</a> reported strong earnings on 28 Jul but after seeing its stock rise on expectation of strong results into the announcement the stock is down slightly (-2.6%) despite revising up 1H OP guidance by 9.6% and generating 20.6% YoY OP growth in 1Q. Fiscal year guidance looks conservative but the potential for a fall in robomachine sales and overall OP from the second half as one-off demand from smartphone manufacturers tails off is a significant concern.</p><p>With both EV/OP and PE multiples trending close to peak levels we feel there is significant downside risk for the stock if a cycle peak is confirmed over the next quarter. We further feel that the company's valuation premium vs. peers is no longer justified as the growth profile of peers with stronger exposure to robotics is now superior. Even if the robotics market grew at 20% a year for five years we believe it would contribute no more than 15% total OP growth due to the low profit contribution of robots for Fanuc. </p>

Fanuc Corp (6954 JP) reported strong earnings on 28 Jul but after seeing its stock rise on expectation of strong results into the announcement the stock is down slightly (-2.6%) despite revising up 1H OP guidance by 9.6% and generating 20.6% YoY OP growth in 1Q. Fiscal year guidance looks conservative but the potential for a fall in robomachine sales and overall OP from the second half as one-off demand from smartphone manufacturers tails off is a significant concern.With both EV/OP and PE multiples trending close to peak levels we feel there is significant downside risk for the stock if a cycle peak is confirmed over the next quarter. We further feel that the company's valuation premium vs. peers is no longer justified as the growth profile of peers with stronger exposure to robotics is now superior. Even if the robotics market grew at 20% a year for five years we believe it would contribute no more than 15% total OP growth due to the low profit contribution of robots for Fanuc. 

ファナック：第1四半期は好調のピークとなる可能性も、第2四半期は利益が減少