Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

A chartered management accountant with more than 10 years of rich experience in investment research and financial analysis. Worked as an equity analyst for one of the world's largest asset managers with USD2.5trn in AUM covering numerous sectors including chemicals, retail, tech, autos, telco, real-estate and banks, globally. Experienced in fundamental equity research, industry research, commodity studies, forensic accounting, and due diligence reviews.

Equity Analyst

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Hitachi’s Probable Next Sell-Off: Hitachi High-Technologies

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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.

Event-Driven

<ul>
<li>Hitachi Ltd. announced today that it has made a tender offer for Hitachi High-Technologies to buy the remaining stake in the company.</li>
<li>Hitachi Ltd. currently owns 51.73% of the company and has offered to buy the remaining stake for JPY531.1bn, implying about JPY8,000 per share.</li>
<li>Hitachi High-Tech’s shares closed at JPY7,920 per share and the offer implies a 1% premium on the company’s closing price.</li>
</ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/115/850/original/image_381551509201580476323075.png?1580476326" class="editor-image img-responsive" data-smartkarma-image-id="115850"></figure><div class="content-caption"><em>Source: Company Disclosures</em></div><ul>
<li>Hitachi Ltd. has been aggressively restructuring its business and as part of this strategy, the company announced in December 2019 the sales of its 51% stake in Hitachi Chemical (a supplier of materials for semiconductors, displays and lithium-ion batteries) to Showa Denko and its diagnostic imaging business to Fujifilm Holdings Corp.</li>
<li>In its investor presentation, the company has mentioned that it has plans to transform Hitachi High-Tech’s Healthcare business (in-vitro diagnostics business) into a core business.</li>
<li>In our previous insight (#), we speculated that Hitachi High-Technologies would be next in line for a potential sale given the company’s products are very similar to that of Hitachi Chemical and Hitachi’s diagnostic imaging business (sold off to Fujifilm) in terms of industry exposure.</li>
<li>While the parent Hitachi’s move to buy the remaining stake of Hitachi High-Tech came in as a surprise, we are not surprised at the fact that it wants to retain the Analytical Solutions business and transform it into a core business.</li>
<li>In our previous insight, we also highlighted that the company’s business model can be turned around with capital investments particularly the company’s Analytical Solutions business.</li>
<li>While the market is yet to hear what Hitachi Ltd.’s plans are for the remaining two businesses, we still believe a potential sale of the remaining two businesses could be on the cards over the next 12-24 months.</li>
</ul>


Hitachi Ltd. announced today that it has made a tender offer for Hitachi High-Technologies to buy the remaining stake in the company.
Hitachi Ltd. currently owns 51.73% of the company and has offered to buy the remaining stake for JPY531.1bn, implying about JPY8,000 per share.
Hitachi High-Tech’s shares closed at JPY7,920 per share and the offer implies a 1% premium on the company’s closing price.
Source: Company Disclosures
Hitachi Ltd. has been aggressively restructuring its business and as part of this strategy, the company announced in December 2019 the sales of its 51% stake in Hitachi Chemical (a supplier of materials for semiconductors, displays and lithium-ion batteries) to Showa Denko and its diagnostic imaging business to Fujifilm Holdings Corp.
In its investor presentation, the company has mentioned that it has plans to transform Hitachi High-Tech’s Healthcare business (in-vitro diagnostics business) into a core business.
In our previous insight (#), we speculated that Hitachi High-Technologies would be next in line for a potential sale given the company’s products are very similar to that of Hitachi Chemical and Hitachi’s diagnostic imaging business (sold off to Fujifilm) in terms of industry exposure.
While the parent Hitachi’s move to buy the remaining stake of Hitachi High-Tech came in as a surprise, we are not surprised at the fact that it wants to retain the Analytical Solutions business and transform it into a core business.
In our previous insight, we also highlighted that the company’s business model can be turned around with capital investments particularly the company’s Analytical Solutions business.
While the market is yet to hear what Hitachi Ltd.’s plans are for the remaining two businesses, we still believe a potential sale of the remaining two businesses could be on the cards over the next 12-24 months.


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