Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>Indexes: Dow -0.4%, S&amp;P 500 -0.0%, Nasdaq -0.2%; 10Y 5.21%, yields eased; Brent $106.3, choppy on Middle East headlines </li>
<li>DRAM memory stocks fell over 3% after China’s CXMT unveiled cheaper data-centre memory technology, pressuring AI-linked shares, though sharp declines in Japanese chip stocks suggest much is priced in.</li>
<li>Energy led S&amp;P sectors amid unconfirmed reports of a strike on Saudi Aramco’s headquarters; Japanese shippers and trading houses rallied, with further gains hinging on confirmation.</li>
</ul>


Indexes: Dow -0.4%, S&amp;P 500 -0.0%, Nasdaq -0.2%; 10Y 5.21%, yields eased; Brent $106.3, choppy on Middle East headlines 
DRAM memory stocks fell over 3% after China’s CXMT unveiled cheaper data-centre memory technology, pressuring AI-linked shares, though sharp declines in Japanese chip stocks suggest much is priced in.
Energy led S&amp;P sectors amid unconfirmed reports of a strike on Saudi Aramco’s headquarters; Japanese shippers and trading houses rallied, with further gains hinging on confirmation.


Ohayo Japan | Cheap Chinese Memory Hits the AI Hardware Trade

<ul>
<li>Indexes: Dow +0.4%, S&amp;P 500 -0.1%, Nasdaq −0.4%; chipmakers sold off on Chinese competition</li>
<li>Meta rose 3.4% as early data suggested its new Muse AI agent is holding on to users</li>
<li>IonQ agreeing to buy cybersecurity firm Elisity; positive read-across for Japanese cyber firms</li>
</ul>


Indexes: Dow +0.4%, S&amp;P 500 -0.1%, Nasdaq −0.4%; chipmakers sold off on Chinese competition
Meta rose 3.4% as early data suggested its new Muse AI agent is holding on to users
IonQ agreeing to buy cybersecurity firm Elisity; positive read-across for Japanese cyber firms


Equity Bottom-Up

FURUNO ELECTRIC CO., LTD. manufactures marine equipment such as sonar fish finders and radar systems.  The Company also makes medical equipment, navigational instruments, global positioning system (GPS), and wireless local area network (LAN) systems.

<ul>
<li>2QFY2/27 OP of ¥7.2bn beat our forecast by 32% and the Street by 31%; excluding FX, 1H OP still grew c.16%.</li>
<li>The FY2030 plan targets ¥180bn of sales and a 15%+ OPM, with services and defence delivering nearly half of the growth.</li>
<li>We raise FY2/27–29E OP by 8–12% and our target to ¥8,870 (from ¥7,770); we remain Bullish.</li>
</ul>


2QFY2/27 OP of ¥7.2bn beat our forecast by 32% and the Street by 31%; excluding FX, 1H OP still grew c.16%.
The FY2030 plan targets ¥180bn of sales and a 15%+ OPM, with services and defence delivering nearly half of the growth.
We raise FY2/27–29E OP by 8–12% and our target to ¥8,870 (from ¥7,770); we remain Bullish.


Furuno Electric (6814 JP): Good Quarter, Better Plan

<ul>
<li>
Markets: Dow +0.8%, S&amp;P 500 +0.6% (near Tuesday’s record high), Nasdaq +0.6%</li>
<li>
On Sunday, a Houthi ballistic missile strike on Riyadh's airport killed 12 people and injured over 300, prompting the Trump administration to consider direct military intervention against the group.</li>
<li>
Mon 12 Oct: US equities open, but US bond markets are closed for Columbus Day. Japan is also closed for Sports Day.</li>
</ul>



Markets: Dow +0.8%, S&amp;P 500 +0.6% (near Tuesday’s record high), Nasdaq +0.6%

On Sunday, a Houthi ballistic missile strike on Riyadh's airport killed 12 people and injured over 300, prompting the Trump administration to consider direct military intervention against the group.

Mon 12 Oct: US equities open, but US bond markets are closed for Columbus Day. Japan is also closed for Sports Day.


YASKAWA Electric Corporation manufactures and markets servomotors, controllers, inverters, and industrial robots.  The Company's products include spindle controllers, computerized numerical control (CNC) systems, and system engineering.

<ul>
<li>2QFY2/27 OP of ¥13.6bn beat our ¥12.9bn on Robotics and System Engineering; revenue of ¥146.6bn missed by 2% as servo supply capped Motion Control.</li>
<li>Orders hit a record ¥185.4bn (+38% YoY), 10% above our forecast. FY2/27 OP guidance of ¥57.5bn sits in line with consensus.</li>
<li>We lift FY2/27–28 OP to ¥60.4bn / ¥81.6bn (+4–5%); DCF ¥6,007 (+26%). We remain bullish.</li>
</ul>


2QFY2/27 OP of ¥13.6bn beat our ¥12.9bn on Robotics and System Engineering; revenue of ¥146.6bn missed by 2% as servo supply capped Motion Control.
Orders hit a record ¥185.4bn (+38% YoY), 10% above our forecast. FY2/27 OP guidance of ¥57.5bn sits in line with consensus.
We lift FY2/27–28 OP to ¥60.4bn / ¥81.6bn (+4–5%); DCF ¥6,007 (+26%). We remain bullish.


Yaskawa (6506 JP) | Q2 Review: Orders Run Ahead

Over 20 years experience in equities and asset management in Asia and Japan. Qualified CFA with experience analyzing companies as a buy-side analyst. In-depth knowledge of company fundamental analysis, corporate governance and valuations.