Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Securities analyst covering electronics, precision equipment & robotics, engineering, construction, transport and other sectors for more than 25 years in Japan and 3 years in Korea. Permanent resident of Japan.

Senior Technology Analyst, Japanese Equities

Mitsubishi Heavy (7011) – Strong Earnings, ¥10.2T Backlog, Macro Tailwinds Remain Supportive

MHI (7011 JP) Q1 Beat: Record Backlog & Policy Tailwinds Support Premium Valuation

Japan Defence Supercycle: Multi-Decade Tailwinds, Near-Term Catalysts

MHI (7011 JP): U.S. Presses Japan to Spend More on Defense

MHI (7011 JP): Election Unlikely to Affect Defense Budget

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

Mitsubishi Heavy Industries / Equity Bottom-Up

<ul>
<li>MHI is up nearly 60% year-to-date to 46x management's EPS guidance for FY Mar-26 and 27x our EPS estimate for FY Mar-30.</li>
<li>By then, we expect Air, Defense &amp; Space revenues to double and the division's operating margin to rise from 10% to 15%, which is the likely cap on profitability. </li>
<li>Given Japan's uncertain finances and the long time horizon that should already be discounted, we recommend profit taking. </li>
</ul>


MHI is up nearly 60% year-to-date to 46x management's EPS guidance for FY Mar-26 and 27x our EPS estimate for FY Mar-30.
By then, we expect Air, Defense &amp; Space revenues to double and the division's operating margin to rise from 10% to 15%, which is the likely cap on profitability. 
Given Japan's uncertain finances and the long time horizon that should already be discounted, we recommend profit taking. 


Mitsubishi Heavy Industries

MHI(7011 JP): 이익 실현