Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

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>The UK Post Office "Horizon Scandal" has blown up, putting Fujitsu's computer system failure on the front pages and on the agenda of Parliament and Prime Minister Sunak.</li>
<li>Fujitsu UK has been awarded £6.8bn in public contracts since 2012. The Justice Secretary is  now talking about compensation for the enormous financial and personal damage caused.</li>
<li>Fujitsu's share price is coming off a new all-time high reached in December. The amount of compensation and loss of potential future contracts is substantial but uncertain.</li>
</ul>


The UK Post Office "Horizon Scandal" has blown up, putting Fujitsu's computer system failure on the front pages and on the agenda of Parliament and Prime Minister Sunak.
Fujitsu UK has been awarded £6.8bn in public contracts since 2012. The Justice Secretary is  now talking about compensation for the enormous financial and personal damage caused.
Fujitsu's share price is coming off a new all-time high reached in December. The amount of compensation and loss of potential future contracts is substantial but uncertain.


Fujitsu (6702 JP): Horizon Scandal Blows Up

Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

<ul>
<li>A massive shortage of IT professionals combined with Shift's overwhelming dominance of the labor market should drive 20% annual revenue growth through 2030. </li>
<li>But Shift missed consensus profitability estimates 3 consecutive quarters, and the share price is down 67% in 12 months, compared to an 18% rise in the median peer. </li>
<li>In our view, a recovery in profitability is already underway, and shares are at least 45% undervalued</li>
</ul>


A massive shortage of IT professionals combined with Shift's overwhelming dominance of the labor market should drive 20% annual revenue growth through 2030. 
But Shift missed consensus profitability estimates 3 consecutive quarters, and the share price is down 67% in 12 months, compared to an 18% rise in the median peer. 
In our view, a recovery in profitability is already underway, and shares are at least 45% undervalued


Shift (3697): Profitability Rebound Underway

Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

<ul><li>Fujitsu launches GenAI platform for advanced AI capabilities, enhancing customization options for users.</li><li>CuspAI receives US$30M funding, partners with Geoffrey Hinton to address climate change using advanced materials.</li><li>Global IC fab capacity expected to grow by 6% in 2024 and 7% in 2025, with Taiwan playing a key role in AI innovation.</li></ul>

Fujitsu launches GenAI platform for advanced AI capabilities, enhancing customization options for users.CuspAI receives US$30M funding, partners with Geoffrey Hinton to address climate change using advanced materials.Global IC fab capacity expected to grow by 6% in 2024 and 7% in 2025, with Taiwan playing a key role in AI innovation.

Tech Supply Chain Tracker (20-Jun-2024): Fujitsu launches new AI customization platform.

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In December 2019, an article in slightly odd Japanese business magazine Sentaku (選択) suggested <a href="https://www.smartkarma.com/entities/fujitsu-ltd" target="_blank" data-smartkarma-citation="entities:16968:1" rel="noopener">Fujitsu Ltd (6702 JP)</a> would imminently seek to address dual listings of subs.</li>
<li>Some subs went early. The auction for <a href="https://www.smartkarma.com/entities/fujitsu-general-ltd" target="_blank" data-smartkarma-citation="entities:2025:1" rel="noopener">Fujitsu General (6755 JP)</a> started spring 2023, failed, started again, failed again, and the shares languished. </li>
<li>Two years later we have a deal. Large privately-held company Paloma-Rheem Holdings is the buyer in a split-price deal which comes at a decent but not exorbitant premium.</li>
</ul>


In December 2019, an article in slightly odd Japanese business magazine Sentaku (選択) suggested Fujitsu Ltd (6702 JP) would imminently seek to address dual listings of subs.
Some subs went early. The auction for Fujitsu General (6755 JP) started spring 2023, failed, started again, failed again, and the shares languished. 
Two years later we have a deal. Large privately-held company Paloma-Rheem Holdings is the buyer in a split-price deal which comes at a decent but not exorbitant premium.


Fujitsu General (6755) - Long Sale Process Finally Over. Unexciting but Uncomplicated Deal.

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fujitsu-general-ltd" target="_blank" data-smartkarma-citation="entities:2025:1" rel="noopener">Fujitsu General (6755 JP)</a> announced a preconditional tender offer from Paloma Rheem Holdings Co at JPY2,808 per share, a 23.5% premium to the last close.</li>
<li>The offer, which is preconditional on regulatory approvals and will open in early July, is attractive compared to historical trading ranges and peer multiples.</li>
<li>The process is lacking as Fujitsu declined to conduct an auction. The offer is below the midpoint of the IFA DCF valuation range, and the Board requested price.</li>
</ul>



Fujitsu General (6755 JP) announced a preconditional tender offer from Paloma Rheem Holdings Co at JPY2,808 per share, a 23.5% premium to the last close.
The offer, which is preconditional on regulatory approvals and will open in early July, is attractive compared to historical trading ranges and peer multiples.
The process is lacking as Fujitsu declined to conduct an auction. The offer is below the midpoint of the IFA DCF valuation range, and the Board requested price.


Fujitsu General (6755 JP): Fujitsu (6702 JP) Supports a Light Tender Offer

Japan

Fujitsu Ltd manufactures semiconductor, computer, and communication equipment. The Company provides comprehensive information technology, network and telecommunication solutions, and Internet services.

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Fujitsu Ltd (6702 JP)

Fujitsu (6702 JP): Horizon Scandal Blows Up

The UK Post Office Horizon Scandal has blown up. Fujitsu likely to pay compensation and lose future business due to its computer system failures....

Scott Foster

Shift (3697): Profitability Rebound Underway

Japan's massive shortage of IT professionals and Shift's dominance of the IT labor market should sustain 20% annual sales growth. Profit could grow...

Michael Allen

Tech Supply Chain Tracker (20-Jun-2024): Fujitsu launches new AI customization platform.

Fujitsu launches GenAI platform for advanced AI, CuspAI secures funding for climate change efforts, IC fab capacity to grow, Lumai boosts AI with...

Tech Supply Chain Tracker

Fujitsu General (6755) - Long Sale Process Finally Over. Unexciting but Uncomplicated Deal.

Fujitsu has finally found a buyer for Fujitsu General. It is not a surprising buyer, but the name will be new to many outside of Japan. The deal...

Travis Lundy

Fujitsu General (6755 JP): Fujitsu (6702 JP) Supports a Light Tender Offer

Due to the lack of an auction, the offer being below the midpoint of the IFA DCF valuation range, and the Board's requested price, a competing bid...

Arun George

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