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

<p>Aisin announced its 2QFY22 results on Friday (29th October) and the company recorded revenue of ¥887bn (-9.2% QoQ, -1.5% YoY) and OP of ¥25bn (OPM of 2.9% compared to 4.6% and 6.1% respectively in 2QFY21 and 1QFY22). Like with Denso, Aisin maintained guidance despite relatively weak production volumes and margins. Unlike Denso, Aisin’s valuation multiples look depressed.</p>

Aisin announced its 2QFY22 results on Friday (29th October) and the company recorded revenue of ¥887bn (-9.2% QoQ, -1.5% YoY) and OP of ¥25bn (OPM of 2.9% compared to 4.6% and 6.1% respectively in 2QFY21 and 1QFY22). Like with Denso, Aisin maintained guidance despite relatively weak production volumes and margins. Unlike Denso, Aisin’s valuation multiples look depressed.

Aisin – Underlying Improvements Materially Underappreciated

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Toyota Group autoparts maker <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> today <a href="https://www.aisin.com/en/news/2023/005984.html" target="_blank" rel="noopener">announced</a> a new <a href="https://www.aisin.com/en/investors/settlement/uploads/Mid%20Long-term%20IR_presentation_en.pdf" target="_blank" rel="noopener">Medium-Term Plan</a>. They plan to shift their business away from "entrusted" business, towards BEV, Brakes, and "Safe/Comfort Entry"</li>
<li>They aim to grow revenues 25% from 2021 to 2025 and an additional 10-20% by 2030. </li>
<li>They also aim to improve investment and capital efficiency, and that's where we can look at the interesting possibilities.</li>
</ul>


Toyota Group autoparts maker Aisin Seiki (7259 JP) today announced a new Medium-Term Plan. They plan to shift their business away from "entrusted" business, towards BEV, Brakes, and "Safe/Comfort Entry"
They aim to grow revenues 25% from 2021 to 2025 and an additional 10-20% by 2030. 
They also aim to improve investment and capital efficiency, and that's where we can look at the interesting possibilities.


The New Aisin (7259) MTP - Selling Crossholdings, Eventually

Japan Specialist

Mark Chadwick

<ul>
<li>Aisin’s stock price rose by +8% today after the company held its MTP strategy briefing</li>
<li>Aisin to restructure its business portfolio and focus on new growth areas for EV’s - eAxle, battery frames, and braking technologies</li>
<li>Aisin aims to generate ¥400b from balance sheet reform - asset sales, inventory management and sale of cross-shareholding.</li>
</ul>


Aisin’s stock price rose by +8% today after the company held its MTP strategy briefing
Aisin to restructure its business portfolio and focus on new growth areas for EV’s - eAxle, battery frames, and braking technologies
Aisin aims to generate ¥400b from balance sheet reform - asset sales, inventory management and sale of cross-shareholding.


Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>With <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota (7203 JP)</a> having sold some of its stake in <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso</a>, <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI</a> and <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive</a> this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.</li>
<li>Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


With Toyota (7203 JP) having sold some of its stake in Denso, KDDI and Harmonic Drive this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.
Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

<ul>
<li>Late May, <a href="https://www.smartkarma.com/entities/aisin-corp" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin (7259 JP)</a> announced a sell-down of its 34% stake in <a href="https://www.smartkarma.com/entities/exedy-corp" target="_blank" data-smartkarma-citation="entities:6516:1" rel="noopener">Exedy Corp (7278 JP)</a> - a big non-dilutive offering, pricing 11% below undisturbed. Exedy announced a buyback.</li>
<li>Announced on the 27th of May, shares fell sharply the next day, it priced on the 3rd, and offering shares traded on the 10th. Then the price started climbing back.</li>
<li>My <a href="https://www.smartkarma.com/insights/cash-rich-exedy-7278-sees-huge-offering-offset-by-huge-buyback-watch-for-short-term-games" target="_blank" rel="noopener">first</a> and <a href="https://www.smartkarma.com/insights/exedy-7278-huge-offering-resized-watch-the-dynamics-here" target="_blank" rel="noopener">second</a> pieces argued that buyback accretion, index impact, and change in register shape all meant it was a buy. Activist Murakami agreed, now he has 6.5%. </li>
</ul>


Late May, Aisin (7259 JP) announced a sell-down of its 34% stake in Exedy Corp (7278 JP) - a big non-dilutive offering, pricing 11% below undisturbed. Exedy announced a buyback.
Announced on the 27th of May, shares fell sharply the next day, it priced on the 3rd, and offering shares traded on the 10th. Then the price started climbing back.
My first and second pieces argued that buyback accretion, index impact, and change in register shape all meant it was a buy. Activist Murakami agreed, now he has 6.5%. 


[JAPAN ACTIVISM] - Murakami Group Goes Activisting on Exedy (7278) - Room To Run

Japan

Aisin Corporation manufactures and distributes motor vehicle parts. The Company produces drive train, transmissions, clutches, disc brakes, anti-skid brake system, suspensions, oil pumps, power windows, power door locks, and more. Aisin operates sales and production subsidiaries worldwide.

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Aisin (7259 JP)

Aisin – Underlying Improvements Materially Underappreciated

Like with Denso, Aisin maintained guidance despite relatively weak production volumes and margins. Unlike Denso, Aisin’s valuation multiples look...

Mio Kato

The New Aisin (7259) MTP - Selling Crossholdings, Eventually

Aisin presented its revised MTP today, including ¥400bn of b/s restructuring, including cross-holding sales, over the next 2.5yrs. They expect OPMs...

Travis Lundy

Aisin (7259) | MTP Gains Traction

Aisin's stock soars as the company plans to restructure and prioritize EV-related growth areas, aiming to generate ¥400b through balance sheet...

Mark Chadwick

Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Toyota, Toyota Industries and Denso are tag teaming to unwind some of their stake in Aisin, in a deal worth over US$1bn. While the timing of the...

Sumeet Singh

[JAPAN ACTIVISM] - Murakami Group Goes Activisting on Exedy (7278) - Room To Run

The Murakami Group has now bought 10.1% of Exedy (7278). Interestingly, NOMURA Aya bought another 1.18% on 14 June to get to 9.59%, then sold 6.79%...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Aisin – Underlying Improvements Materially Underappreciated

Like with Denso, Aisin maintained guidance despite relatively weak production volumes and margins. Unlike Denso, Aisin’s valuation multiples look...

Mio Kato

The New Aisin (7259) MTP - Selling Crossholdings, Eventually

Aisin presented its revised MTP today, including ¥400bn of b/s restructuring, including cross-holding sales, over the next 2.5yrs. They expect OPMs...

Travis Lundy

Aisin (7259) | MTP Gains Traction

​Aisin's stock soars as the company plans to restructure and prioritize EV-related growth areas, aiming to generate ¥400b through balance sheet...

Mark Chadwick

Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Toyota, Toyota Industries and Denso are tag teaming to unwind some of their stake in Aisin, in a deal worth over US$1bn. While the timing of the...

Sumeet Singh

[JAPAN ACTIVISM] - Murakami Group Goes Activisting on Exedy (7278) - Room To Run

The Murakami Group has now bought 10.1% of Exedy (7278). Interestingly, NOMURA Aya bought another 1.18% on 14 June to get to 9.59%, then sold 6.79%...

Travis Lundy

Aisin's stock soars as the company plans to restructure and prioritize EV-related growth areas, aiming to generate ¥400b through balance sheet...