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

Hamamatsu Photonics Kk / Equity Bottom-Up

<ul>
<li>Demand from the semiconductor, medical, quantum computing and defense industries is turning the Laser segment into Hamamatsu Photonics's new growth driver.</li>
<li>The acquisition of NKT Photonics brings defense and other technologies, Rheinmetall as a customer in Europe, and potential for greater defense-related sales in Japan. </li>
<li>Selling at 20x net profit guidance for FY Sep-28, near the bottom of its 10-year P/E range.</li>
</ul>


Demand from the semiconductor, medical, quantum computing and defense industries is turning the Laser segment into Hamamatsu Photonics's new growth driver.
The acquisition of NKT Photonics brings defense and other technologies, Rheinmetall as a customer in Europe, and potential for greater defense-related sales in Japan. 
Selling at 20x net profit guidance for FY Sep-28, near the bottom of its 10-year P/E range.


Hamamatsu Photonics (6965 JP): The Opportunity in Lasers

<ul>
<li>Announced last Friday, FY Sep-25 sales and net profit were in line with guidance, but operating profit fell short. On Monday, the shares dropped 4.5%, wiping out a month's gains.</li>
<li>Looking ahead, management expects three years of sales and profit growth as capex declines, depreciation and R&amp;D level off, and the NKT Photonics acquisition approaches breakeven.</li>
<li>In this scenario, semiconductor, bio-medical, defense and quantum computing applications should drive 3-year sales growth of 24% and a 71% increase in net profit, bringing the P/E down to 20X.</li>
</ul>


Announced last Friday, FY Sep-25 sales and net profit were in line with guidance, but operating profit fell short. On Monday, the shares dropped 4.5%, wiping out a month's gains.
Looking ahead, management expects three years of sales and profit growth as capex declines, depreciation and R&amp;D level off, and the NKT Photonics acquisition approaches breakeven.
In this scenario, semiconductor, bio-medical, defense and quantum computing applications should drive 3-year sales growth of 24% and a 71% increase in net profit, bringing the P/E down to 20X.


Hamamatsu Photonics (6965 JP): Capex Peaking, Profits to Rebound

<ul>
<li>Profits and share price stabilizing after steep declines, although margins still under pressure from rising R&amp;D and depreciation, and costs associated with recent acquisitions.</li>
<li>Sales of medical equipment to recover from post-COVID decline. Semiconductor equipment driven by advanced logic and high-bandwidth memory. Lasers to become fourth major product division.</li>
<li>Buy for the long-term. Risks include Trump tariffs, weak European economies, emergence of Chinese competition.</li>
</ul>


Profits and share price stabilizing after steep declines, although margins still under pressure from rising R&amp;D and depreciation, and costs associated with recent acquisitions.
Sales of medical equipment to recover from post-COVID decline. Semiconductor equipment driven by advanced logic and high-bandwidth memory. Lasers to become fourth major product division.
Buy for the long-term. Risks include Trump tariffs, weak European economies, emergence of Chinese competition.


Hamamatsu Photonics (6965 JP): Rebound Ahead

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

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Sentiment in Japan has reversed sharply showing strains in the JPY and JGB markets.  The Nikkei 225 has retraced all its gains since the election of Prime Minister Takaichi.</li>
<li>The market is nervous about the size of Takaichi's economic package, which will be ¥21.3 trillion; 27%. more than her predecessor pledged. It will increase bond issuance substantially.</li>
<li>Tensions from Takaichi's provocation of China show no sign of easing.  China has started economic and other measures to respond. The US has removed a missile launcher from Japan.</li>
</ul>


Sentiment in Japan has reversed sharply showing strains in the JPY and JGB markets.  The Nikkei 225 has retraced all its gains since the election of Prime Minister Takaichi.
The market is nervous about the size of Takaichi's economic package, which will be ¥21.3 trillion; 27%. more than her predecessor pledged. It will increase bond issuance substantially.
Tensions from Takaichi's provocation of China show no sign of easing.  China has started economic and other measures to respond. The US has removed a missile launcher from Japan.


Japan: The New Takaichi Trade, SELL THE RIP!

Japan

HAMAMATSU PHOTONICS K.K. manufactures electron tubes, semiconductors, and image processors.  The Company's products include photosensitive electronic tubes, optical/image sensors, X-ray related products, laser related products, photodiodes, light-emitting diodes (LED) and video camera used for measuring equipment.

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Hamamatsu Photonics Kk (6965 JP)

Hamamatsu Photonics (6965 JP): The Opportunity in Lasers

Semiconductor, medical, quantum and defense-related demand are turning the Laser segment into a new growth driver. By the end of the decade, it...

Scott Foster

Hamamatsu Photonics (6965 JP): Capex Peaking, Profits to Rebound

High growth in capital spending is ending and depreciation should follow. Growth in R&D and SGA expenses is also scheduled to drop sharply, while...

Scott Foster

Hamamatsu Photonics (6965 JP): Rebound Ahead

Share price bottoming out, sales and profits turned up last quarter. Renewed growth to be driven by medical, semiconductor and laser products....

Scott Foster

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: The New Takaichi Trade, SELL THE RIP!

Sentiment in Japan has reversed sharply showing strains in the JPY and JGB markets. The Nikkei 225 has retraced all its gains since the election...

David Mudd

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