Equity Analyst, LightStream Research

Aqila Ali

Equity Analyst

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

This insight follows our previous insights on the Honda parts and Hitachi Automotive Systems merger: <a href="https://www.smartkarma.com/insights/hitachi-thoughts-on-the-honda-group-autoparts-merger" target="_blank" data-smartkarma-citation="insights:34065" rel="noopener">Hitachi – Thoughts on the Honda Group Autoparts Merger, </a><a href="https://www.smartkarma.com/insights/are-hitachi-and-honda-following-the-toyota-group-s-j-quad-dynamics-jv" target="_blank" data-smartkarma-citation="insights:34170" rel="noopener">Are Hitachi and Honda Following the Toyota Group's J-QuAD Dynamics JV?, and </a><a href="https://www.smartkarma.com/insights/showa-has-been-trading-at-a-discount-to-peers-so-price-it-low" target="_blank" data-smartkarma-citation="insights:34403" rel="noopener">Showa: Has Been Trading at a Discount to Peers, So Price It Low?. </a> This insight reviews <a href="https://www.smartkarma.com/entities/keihin-corp" target="_blank" data-smartkarma-citation="entities:15395:1" rel="noopener">Keihin Corp (7251 JP)</a>’s business outlook, its valuation, and the tender offer price. Our key points are:<ul>
<li>Performance compared to <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> (as the highest benchmark), <a href="https://www.smartkarma.com/entities/aisin-seiki-co-ltd" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin Seiki (7259 JP)</a> (as a modest possibility) and <a href="https://www.smartkarma.com/entities/aisan-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:16945:1" rel="noopener">Aisan Industry (7283 JP)</a> (also a Toyota group supplier, as the closest peer, given exposure to both auto and motorcycles).</li>
<li>Keihin’s revenue has been declining mainly due to its Auto Parts business similar to peer Aisan Industry.</li>
<li>As for Showa, medium to long term growth prospects are attractive for Keihin, especially due to the company’s focus on Motorcycles Parts business in Asia.</li>
<li>OP was significantly hit during the recent quarter. We believe the dip in OPM to be temporary and the company should be able to maintain OPM above closest peer Aisan as its Asia Business (highest margin) grows.</li>
<li>Keihin looked extremely cheap prior, at its undisturbed price, trading in line with Aisan Industry despite its relatively better earnings profile than Aisan.</li>
<li>It seems that the market has now priced in the potential growth for the company and we feel that the tender price of JPY2,600 which is close to its all-time high looks quite appropriate.</li>
</ul>

This insight follows our previous insights on the Honda parts and Hitachi Automotive Systems merger: Hitachi – Thoughts on the Honda Group Autoparts Merger, Are Hitachi and Honda Following the Toyota Group's J-QuAD Dynamics JV?, and Showa: Has Been Trading at a Discount to Peers, So Price It Low?.  This insight reviews Keihin Corp (7251 JP)’s business outlook, its valuation, and the tender offer price. Our key points are:
Performance compared to Denso Corp (6902 JP) (as the highest benchmark), Aisin Seiki (7259 JP) (as a modest possibility) and Aisan Industry (7283 JP) (also a Toyota group supplier, as the closest peer, given exposure to both auto and motorcycles).
Keihin’s revenue has been declining mainly due to its Auto Parts business similar to peer Aisan Industry.
As for Showa, medium to long term growth prospects are attractive for Keihin, especially due to the company’s focus on Motorcycles Parts business in Asia.
OP was significantly hit during the recent quarter. We believe the dip in OPM to be temporary and the company should be able to maintain OPM above closest peer Aisan as its Asia Business (highest margin) grows.
Keihin looked extremely cheap prior, at its undisturbed price, trading in line with Aisan Industry despite its relatively better earnings profile than Aisan.
It seems that the market has now priced in the potential growth for the company and we feel that the tender price of JPY2,600 which is close to its all-time high looks quite appropriate.


ケーヒン：公開買付けは妥当な評価