Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

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>
<a href="https://www.smartkarma.com/entities/fujifilm-holdings-corp" target="_blank" data-smartkarma-citation="entities:16353:1" rel="noopener">FUJIFILM Holdings (4901 JP)</a> reported 1QFY03/24 results today. Both revenue and OP increased 5.6% and 5.2% YoY to ¥660.8bn (vs consensus ¥649bn) and ¥52.2bn (vs consensus ¥52.1bn) respectively.</li>
<li>Materials segment’s earnings were negatively impacted during the quarter due to a stagnant semiconductor market, however, we expect segment’s earnings to improve with the completion of Entegris acquisition.</li>
<li>Despite the company successfully transitioning into a healthcare player, Fujifilm is still trading in line with imaging/photocopy players and there is significant upside to the company’s current share price.</li>
</ul>



FUJIFILM Holdings (4901 JP) reported 1QFY03/24 results today. Both revenue and OP increased 5.6% and 5.2% YoY to ¥660.8bn (vs consensus ¥649bn) and ¥52.2bn (vs consensus ¥52.1bn) respectively.
Materials segment’s earnings were negatively impacted during the quarter due to a stagnant semiconductor market, however, we expect segment’s earnings to improve with the completion of Entegris acquisition.
Despite the company successfully transitioning into a healthcare player, Fujifilm is still trading in line with imaging/photocopy players and there is significant upside to the company’s current share price.


Fujifilm: Earnings Beat; Yet to Trade in Line with Healthcare Players

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

<ul>
<li>Q1’23 revenues of ¥764 billion, up 15% YoY and 2.6% QoQ</li>
<li>FY2022, revenues grew by 13.2% to ¥2,859 while net income grew by 3.9% to ¥219.4.</li>
<li>Electronic Materials set to grow from ¥180 billion in '22 to ¥500 billion by '30</li>
</ul>


Q1’23 revenues of ¥764 billion, up 15% YoY and 2.6% QoQ
FY2022, revenues grew by 13.2% to ¥2,859 while net income grew by 3.9% to ¥219.4.
Electronic Materials set to grow from ¥180 billion in '22 to ¥500 billion by '30


Research from Asian Century Stocks, Asian Century Stocks

Michael Fritzell

Research from Asian Century Stocks

Providing financial journalism in the Asia-Pacific

Asian Century Stocks

Asian Century Stocks is a newsletter providing financial journalism for companies and stocks in the Asia-Pacific. 
The Asian Century Stocks logotype “百” stands for “one hundred” or a “century”. The economic centre of gravity is moving towards Asia. Yet most global investors are missing out.

Thematic (Sector/Industry)

<ul>
<li>The IVF industry is booming, driven by couples having children later in life as well as infertility problems.</li>
<li>There should be plenty of opportunities for IVF clinic operators, including for Jinxin Fertility which may benefit if the Chinese government introduces subsidies for IVF procedures. But the acquisitive nature of many IVF-related companies has caused their returns on equity and earnings per share growth to be weak.</li>
<li>One stock that trades at a low multiple with fat profit margins is Organon, though be aware of its ongoing patent cliffs, which may be the reason it was spun off in the first place.</li>
</ul>


The IVF industry is booming, driven by couples having children later in life as well as infertility problems.
There should be plenty of opportunities for IVF clinic operators, including for Jinxin Fertility which may benefit if the Chinese government introduces subsidies for IVF procedures. But the acquisitive nature of many IVF-related companies has caused their returns on equity and earnings per share growth to be weak.
One stock that trades at a low multiple with fat profit margins is Organon, though be aware of its ongoing patent cliffs, which may be the reason it was spun off in the first place.


Global Healthcare Analyst

Tina Banerjee

<p><a href="https://www.smartkarma.com/entities/olympus-corp" target="_blank" data-smartkarma-citation="entities:356:1" rel="noopener">Olympus Corp (7733 JP)</a> is the global market leader in gastrointestinal endoscopic equipment, with 70%+ share. Global GI endoscopic equipment market is expected to have a CAGR of 4–6% during FY21–24. Olympus is expected to outpace the market due to its dominant positioning in Asia market and superior imaging technologies. The company is one of the early entrants in fast growing Asia markets among its peers. Consequently, Olympus witnessed 4.2x jump in medical business revenue from China in the last decade. Last year, Olympus has launched its most advanced endoscopy system to date, EVIS X1, the first new model in about eight years (vs usual product life cycle of 5–6 years). The company estimates 70,000 units potential only for replacing the previous models by EVIS X1. Olympus is transforming itself to become a pure-play global medical devices company and conducted several M&amp;A to augment its medium-term growth. Its medical business is now back to pre-pandemic level. Concerns regarding China business seems to be over and Olympus shares are trading near its highs. Despite some risk due to global semiconductor shortage, we are bullish on the growth potential of the company’s medical business due to ongoing recovery in elective procedures and new product launch. </p>

Olympus Corp (7733 JP) is the global market leader in gastrointestinal endoscopic equipment, with 70%+ share. Global GI endoscopic equipment market is expected to have a CAGR of 4–6% during FY21–24. Olympus is expected to outpace the market due to its dominant positioning in Asia market and superior imaging technologies. The company is one of the early entrants in fast growing Asia markets among its peers. Consequently, Olympus witnessed 4.2x jump in medical business revenue from China in the last decade. Last year, Olympus has launched its most advanced endoscopy system to date, EVIS X1, the first new model in about eight years (vs usual product life cycle of 5–6 years). The company estimates 70,000 units potential only for replacing the previous models by EVIS X1. Olympus is transforming itself to become a pure-play global medical devices company and conducted several M&amp;A to augment its medium-term growth. Its medical business is now back to pre-pandemic level. Concerns regarding China business seems to be over and Olympus shares are trading near its highs. Despite some risk due to global semiconductor shortage, we are bullish on the growth potential of the company’s medical business due to ongoing recovery in elective procedures and new product launch. 

Olympus (7733 JP): Medical Business Is on a Strong Foothold; Buy at Current Level

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/roland-dg-corp" target="_blank" data-smartkarma-citation="entities:10653:1" rel="noopener">Roland DG Corp (6789 JP)</a> has re-recommended Taiyo’s revised offer of JPY5,370, which is 6.7% higher than its previous JPY5,035 offer and 3.3% higher than <a href="https://www.smartkarma.com/entities/brother-industries-ltd" target="_blank" data-smartkarma-citation="entities:6114:1" rel="noopener">Brother Industries (6448 JP)</a>’s JPY5,200 offer.</li>
<li>The Board articulates a compelling case on Brother's offer dis-synergies, which will help swing some shareholder opinion towards Taiyo (irrespective of the price). </li>
<li>Brother could bump, but it would not address the issue of satisfying the condition precedent (non-completion of Taiyo offer) and securing the Board's recommendation.  </li>
</ul>



Roland DG Corp (6789 JP) has re-recommended Taiyo’s revised offer of JPY5,370, which is 6.7% higher than its previous JPY5,035 offer and 3.3% higher than Brother Industries (6448 JP)’s JPY5,200 offer.
The Board articulates a compelling case on Brother's offer dis-synergies, which will help swing some shareholder opinion towards Taiyo (irrespective of the price). 
Brother could bump, but it would not address the issue of satisfying the condition precedent (non-completion of Taiyo offer) and securing the Board's recommendation.  


Roland DG (6789 JP): Taiyo Bumps as Brother (6448 JP) Now Faces a Dilemma

Japan

FUJIFILM Holdings Corporation develops, sells and services Imaging, Information, and Document Solutions.  Its products include color films, digital cameras, photofinishing products and equipment.  The Group also manufactures medical and graphic art use equipment and materials, FPD materials, and optical devices, and provides services on office copy machines, printers, and related equipment.

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FUJIFILM Holdings (4901 JP)

Fujifilm: Earnings Beat; Yet to Trade in Line with Healthcare Players

Fujifilm's 1QFY24 earnings beat consensus. The company's transition into a healthcare player is yet to fully pay-off, and we expect recent M&As to...

Shifara Samsudeen, ACMA, CGMA

FUJIFILM (4901.T) Loving The Setup Here

Q1’23 revenues of ¥764 billion, +15% YoY & 2.6% QoQ. FY2022, revenues +13.2% to ¥2,859, net income +3.9% to ¥219.4. TTM P/E ~16 reflects past, not...

William Keating

IVF: Secular Growth for Decades to Come.

The IVF industry is booming, driven by couples having children later in life as well as infertility problems. There should be plenty of...

Asian Century Stocks

Olympus (7733 JP): Medical Business Is on a Strong Foothold; Buy at Current Level

Olympus is well-positioned for double-digit revenue growth this fiscal driven by earlier-than-expected recovery in medical business and new product...

Tina Banerjee

Roland DG (6789 JP): Taiyo Bumps as Brother (6448 JP) Now Faces a Dilemma

The shares are trading above Taiyo’s revised offer. Brother could bump but faces a dilemma as its tender offer (irrespective of price) now has a...

Arun George

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