Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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>As a follow-up to our look at <a href="https://www.smartkarma.com/entities/2402" target="_blank" data-smartkarma-citation="entities:2402:1">Mitsui Engineer &amp; Shipbuild (7003 JP)</a> , we examine the potential underlying value of its stake in <a href="https://www.smartkarma.com/entities/2840" target="_blank" data-smartkarma-citation="entities:2840:1">Modec Inc (6269 JP)</a> by comparing it with the very similar <a href="https://www.smartkarma.com/entities/21135" target="_blank" data-smartkarma-citation="entities:21135:1">SBM Offshore NV (SBMO NA)</a> . Both companies focus on the construction, operation and maintenance of FPSOs and have particular strength in large sized conversions. Both companies have similar levels of experience in operating these vessels but SBM remains 2-3x larger by most measures. With various write-downs and…</p>

As a follow-up to our look at Mitsui Engineer &amp; Shipbuild (7003 JP) , we examine the potential underlying value of its stake in Modec Inc (6269 JP) by comparing it with the very similar SBM Offshore NV (SBMO NA) . Both companies focus on the construction, operation and maintenance of FPSOs and have particular strength in large sized conversions. Both companies have similar levels of experience in operating these vessels but SBM remains 2-3x larger by most measures. With various write-downs and…

MODEC Vs. SBM Offshore - Discount Unwarranted

<p>Mounting losses in its Shipbuilding and Engineering segments have seen <a href="https://www.smartkarma.com/entities/2402" target="_blank" data-smartkarma-citation="entities:2402:1">Mitsui Engineer &amp; Shipbuild (7003 JP)</a> 's Discount to NAV on Smartkarma's HoldCo Monitor hit 44%, as it did on 12 Feb 2016 before rallying 40% in about 1 month. The metric has again broken the 2SD band and a 40% rally would only take the company to 15x PE on consensus FY2018 estimates - a similar level to peers such as KHI and IHI. Stellar results at subsidiary, <a href="https://www.smartkarma.com/entities/2840" target="_blank" data-smartkarma-citation="entities:2840:1">Modec Inc (6269 JP)</a> and an end to bleeding in the shipbuilding segment, as the delivery of 4 loss-making tugs is completed, should encourage investors. A confirmation that losses on a subsidiary's EPC project will not exceed the JPY10.7bn already provisioned for it could lift the overhang on the stock, while a recent change in segmentation for ships will improve transparency on the non-MODEC part of that business.</p>

Mounting losses in its Shipbuilding and Engineering segments have seen Mitsui Engineer &amp; Shipbuild (7003 JP) 's Discount to NAV on Smartkarma's HoldCo Monitor hit 44%, as it did on 12 Feb 2016 before rallying 40% in about 1 month. The metric has again broken the 2SD band and a 40% rally would only take the company to 15x PE on consensus FY2018 estimates - a similar level to peers such as KHI and IHI. Stellar results at subsidiary, Modec Inc (6269 JP) and an end to bleeding in the shipbuilding segment, as the delivery of 4 loss-making tugs is completed, should encourage investors. A confirmation that losses on a subsidiary's EPC project will not exceed the JPY10.7bn already provisioned for it could lift the overhang on the stock, while a recent change in segmentation for ships will improve transparency on the non-MODEC part of that business.

Mitsui Engineering Discount to NAV Hits 44% Again. Is a Repeat of Feb 2016's 40% Rally on the Cards?

Japan

Mitsui E&S Holdings Co., Ltd. engineers, builds, and repairs ships.  The Company also manufactures industrial machinery and equipment and builds power plants.  Mitsui Engineering & Shipbuilding also operates information systems services and real estate business.

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Mitsui E&S Holdings (7003 JP)

MODEC Vs. SBM Offshore - Discount Unwarranted

As a follow-up to our look at Mitsui Engineer & Shipbuild (7003 JP) , we examine the potential underlying value of its stake in Modec Inc (6269...

Mio Kato

Mitsui Engineering Discount to NAV Hits 44% Again. Is a Repeat of Feb 2016's 40% Rally on the Cards?

Mounting losses in its Shipbuilding and Engineering segments have seen Mitsui Engineer & Shipbuild (7003 JP) 's Discount to NAV on Smartkarma's...

Mio Kato

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