Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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

<ul>
<li>In our last note we posed the question of whether Shin-Etsu could join the ¥1trn OP club. </li>
<li>The company’s upgrade of its guidance from ¥485bn to ¥675bn today suggests that in fact the answer is looking like a yes. </li>
<li>While conditions for the wafer business remain strong it may be dragged down by tech negativity leading Shin-Etsu to rely on its phenomenal PVC business instead.</li>
</ul>


In our last note we posed the question of whether Shin-Etsu could join the ¥1trn OP club. 
The company’s upgrade of its guidance from ¥485bn to ¥675bn today suggests that in fact the answer is looking like a yes. 
While conditions for the wafer business remain strong it may be dragged down by tech negativity leading Shin-Etsu to rely on its phenomenal PVC business instead.


Taiwan Tech Focused Senior Analyst

Patrick Liao

<ul>
<li>To merge with Siltronic has reached to 95% in probability for GlobalWafers now. Our target price for GlobalWafers doesn’t change at NT$880~960 and $1,200 if it finally past.  </li>
<li>Chinese government requested that GlobalWafers has to spin off its Denmark’s subsidiary 8” float zone (FZ) wafer within no more than 9 months at most.</li>
<li>Currently, Siltronic is delivering a GM of 25.6~32% during 1Q~3Q in 2021, which is competitive to Sumco, Shin Etsu. However, it shall be able to improve the GM further.</li>
</ul>


To merge with Siltronic has reached to 95% in probability for GlobalWafers now. Our target price for GlobalWafers doesn’t change at NT$880~960 and $1,200 if it finally past.  
Chinese government requested that GlobalWafers has to spin off its Denmark’s subsidiary 8” float zone (FZ) wafer within no more than 9 months at most.
Currently, Siltronic is delivering a GM of 25.6~32% during 1Q~3Q in 2021, which is competitive to Sumco, Shin Etsu. However, it shall be able to improve the GM further.


GlobalWafers (6488.TT): The Last Step to Go for Siltronic (WAF GR) Mergence

<ul>
<li>We think the chance for GlobalWafers mergence case to have the final approval could be high. Even if it finally failed, the raw wafer supply should be full until 2024.</li>
<li>This deal was granted by seven governments and organizations already. And it is still under review of Chinese and Japanese governments.</li>
<li>The deal will not change the worldwide raw wafer supply status, especially such supply tightness. To our understanding, the secrets to achieve success are cost reduction and resource management mostly.</li>
</ul>


We think the chance for GlobalWafers mergence case to have the final approval could be high. Even if it finally failed, the raw wafer supply should be full until 2024.
This deal was granted by seven governments and organizations already. And it is still under review of Chinese and Japanese governments.
The deal will not change the worldwide raw wafer supply status, especially such supply tightness. To our understanding, the secrets to achieve success are cost reduction and resource management mostly.


Globalwafers (6488.TT): Stock Price Can Go Higher Even If Siltronic Mergence Case Failed

Thematic (Sector/Industry)

<h3>What’s Original?</h3>
<p>In this original, we have discussed some of the key aspects highlighted in Kishida’s policy statements along with the current status of these policies and companies that are likely to benefit.</p>

What’s Original?
In this original, we have discussed some of the key aspects highlighted in Kishida’s policy statements along with the current status of these policies and companies that are likely to benefit.

Kishida as Prime Minister: The Path Ahead

<p>Surging PVC prices helped Shin-Etsu post blowout numbers as revenue came in 10.6% above consensus and OP beat by 26.3% but the company refrained from raising guidance which suggests some concern about the sustainability of current PVC prices. Nevertheless, there are interesting changes to Shin-Etsu’s profit structure that investors should be aware of.</p>

Surging PVC prices helped Shin-Etsu post blowout numbers as revenue came in 10.6% above consensus and OP beat by 26.3% but the company refrained from raising guidance which suggests some concern about the sustainability of current PVC prices. Nevertheless, there are interesting changes to Shin-Etsu’s profit structure that investors should be aware of.

Shin-Etsu – Blowout but Will PVC Prices Sustain?

Japan

Shin-Etsu Chemical Co., Ltd. produces and distributes synthetic resins and other chemical products such as fertilizers. The Company also manufactures electronic materials such as semiconductor silicon, synthetic, and rare earth quartz. Shin-Etsu Chemical operates in Japan and overseas.

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Shin Etsu Chemical (4063 JP)

Shin-Etsu – Buy for the PVC Business

In our last note we posed the question of whether Shin-Etsu could join the ¥1trn OP club and the answer is now looking like a yes.

Mio Kato

GlobalWafers (6488.TT): The Last Step to Go for Siltronic (WAF GR) Mergence

GlobalWafers to merge with Siltronic has reached to 95% in probability now. Our target price for GlobalWafers doesn’t change at NT$880~960, and it...

Patrick Liao

Globalwafers (6488.TT): Stock Price Can Go Higher Even If Siltronic Mergence Case Failed

The chance for GlobalWafers to have the final approval could be high. Even if it finally failed, the raw wafer supply should be full until 2024.

Patrick Liao

Kishida as Prime Minister: The Path Ahead

In this original, we have discussed some of the key aspects highlighted in Kishida’s policy statements along with the current status of these...

Mio Kato

Shin-Etsu – Blowout but Will PVC Prices Sustain?

Surging PVC prices helped Shin-Etsu post blowout numbers but the company refrained from raising guidance which suggests some concern about the...

Mio Kato

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