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.

Event-Driven

The Nikkei reported today that Bain Capital’s bidding consortium has received preferential negotiating rights from Hitachi. The rumoured valuation is above ¥800bn which would put the premium at just 3.2% above the last close. As we said previously, the potential for a large hike to those terms seems limited and better returns may be on offer in trying to identify other potential buyout targets.

The Nikkei reported today that Bain Capital’s bidding consortium has received preferential negotiating rights from Hitachi. The rumoured valuation is above ¥800bn which would put the premium at just 3.2% above the last close. As we said previously, the potential for a large hike to those terms seems limited and better returns may be on offer in trying to identify other potential buyout targets.

Hitachi Metals – Limited Upside Despite Bain Capital News But Let’s Find the Offshoot Ideas

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Last Week in Event SPACE: NTT Docomo, Evergrande Properties/Auto, Wilmar, Swire, Immunomedics

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Key $70 support on the MSCI ACWI (ACWI-US) held strong last week, and ACWI-US is now inflecting topside its bullish falling wedge pattern. This bullish price action combined with market dynamics which remain mostly healthy lead us to believe the lows of this recent correction are in. Consumer Discretionary and Manufacturing Sectors continue to be two attractive Sectors that are outperforming globally; we highlight numerous actionable names in today's report.

Key $70 support on the MSCI ACWI (ACWI-US) held strong last week, and ACWI-US is now inflecting topside its bullish falling wedge pattern. This bullish price action combined with market dynamics which remain mostly healthy lead us to believe the lows of this recent correction are in. Consumer Discretionary and Manufacturing Sectors continue to be two attractive Sectors that are outperforming globally; we highlight numerous actionable names in today's report.

Our original take on Fujitsu General was that the company was not fulfilling its potential due to a lack of scale but was excessively cheap and could attract a nice premium with the right strategic buyer for Fujitsu to sell to. Since that early December 2019 take, the stock price saw a modest 18% rally into the end of the year, a 40% collapse as COVID fears peaked and a furious 92% rally as markets rebounded and talk of higher demand for air purification systems started. In the meantime, Fujitsu continues with its rather light TOB for Fujitsu Frontech so we refresh our view on Fujitsu General below.

Our original take on Fujitsu General was that the company was not fulfilling its potential due to a lack of scale but was excessively cheap and could attract a nice premium with the right strategic buyer for Fujitsu to sell to. Since that early December 2019 take, the stock price saw a modest 18% rally into the end of the year, a 40% collapse as COVID fears peaked and a furious 92% rally as markets rebounded and talk of higher demand for air purification systems started. In the meantime, Fujitsu continues with its rather light TOB for Fujitsu Frontech so we refresh our view on Fujitsu General below.

Fujitsu General – 36% Above December Levels, What’s the Trade Now?

The Carlyle Group has been getting more enthusiastic about investing in Japan and the <a href="https://asia.nikkei.com/Business/Finance/Carlyle-to-invest-over-9bn-in-Japan-on-post-pandemic-reform-hopes" target="_blank" rel="noopener">Nikkei reported yesterday</a> that the PE firm intended to follow-up its investment in Orion Breweries last year with over ¥1trn in investments over the next three to five years. Below, we examine some of Carlyle’s previous investments in the country to suss out potential filters and candidates for takeover.

The Carlyle Group has been getting more enthusiastic about investing in Japan and the Nikkei reported yesterday that the PE firm intended to follow-up its investment in Orion Breweries last year with over ¥1trn in investments over the next three to five years. Below, we examine some of Carlyle’s previous investments in the country to suss out potential filters and candidates for takeover.

Carlyle Targets Japan for ¥1trn in Investment – Looking at Potential Candidates

Japan

Fujitsu General Ltd. manufactures air-conditioning units, refrigerators, and information-communication equipment. The products include air conditioners, and purifiers. The Company also manufactures computer software and electronic devices.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Fujitsu General (6755 JP)

Hitachi Metals – Limited Upside Despite Bain Capital News But Let’s Find the Offshoot Ideas

A rumoured ¥800bn valuation for Hitachi Metals would offer just 3.2% upside from current prices as we previously warned, but there may be other...

Mio Kato

Last Week in Event SPACE: NTT Docomo, Evergrande Properties/Auto, Wilmar, Swire, Immunomedics

Last Week in Event SPACE ... Plus, other events, CCASS movements and Mood Spins. (This insight covers specific insights & comments...

David Blennerhassett

Global Equity Strategy:

Key $70 support on the MSCI ACWI (ACWI-US) held strong last week, and ACWI-US is now inflecting topside its bullish falling wedge pattern. This...

Vermilion Research

Fujitsu General – 36% Above December Levels, What’s the Trade Now?

Our original take on Fujitsu General was that the company was not fulfilling its potential due to a lack of scale but was excessively cheap and...

Mio Kato

Carlyle Targets Japan for ¥1trn in Investment – Looking at Potential Candidates

The Carlyle Group has been getting more enthusiastic about investing in Japan and the Nikkei reported yesterday that the PE firm intended to...

Mio Kato

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)