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

Harmonic Drive Systems / Equity Bottom-Up

<ul>
<li>HDS revised FY guidance down by 2.6% at the revenue line and 13.7% at the OP line.</li>
<li>The stock was already hit on Friday as a surprise MSCI deletion drove a 7.3% fall.</li>
<li>This is the second surprise downgrade in the sector and we are increasingly confident that we are passing through the cyclical turning point.  </li>
</ul>


HDS revised FY guidance down by 2.6% at the revenue line and 13.7% at the OP line.
The stock was already hit on Friday as a surprise MSCI deletion drove a 7.3% fall.
This is the second surprise downgrade in the sector and we are increasingly confident that we are passing through the cyclical turning point.  


<ul>
<li>SMC reported its 2QFY22 results beating revenue and OP guidance by 5.5% and 18.0% respectively.</li>
<li>A weak yen and strong SG&amp;A control are helping boost margins to unusually high levels as well.</li>
<li>However, cyclical patterns suggest a revenue downturn is incoming at a time when valuations are extremely stretched.</li>
</ul>


SMC reported its 2QFY22 results beating revenue and OP guidance by 5.5% and 18.0% respectively.
A weak yen and strong SG&amp;A control are helping boost margins to unusually high levels as well.
However, cyclical patterns suggest a revenue downturn is incoming at a time when valuations are extremely stretched.


SMC – OP Beat Incoming but so Is the Downcycle

<p>Keyence has been our boring top pick within the factory automation sector for some time and has boringly and consistently outperformed peers. We still consider it the highest quality name within the sector but given valuations, we are reluctantly disembarking here.</p>

Keyence has been our boring top pick within the factory automation sector for some time and has boringly and consistently outperformed peers. We still consider it the highest quality name within the sector but given valuations, we are reluctantly disembarking here.

Keyence – Time to Step Off and Some Warning Signs for Markets

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, <a href="https://www.smartkarma.com/entities/china-merchants-bank-co-ltd-3388a037-4214-4997-b45d-520518cfdb57" target="_blank" data-smartkarma-citation="entities:10987:1" rel="noopener">China Merchants Bank H (3968 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/sunny-optical-tech" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical (2382 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/weimob-inc" target="_blank" data-smartkarma-citation="entities:27394:1" rel="noopener">Weimob Inc. (2013 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/nongfu-spring" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK)</a> and <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a>. Shorts increased in the Communication Services, Consumer Discretionary, Financials and Health Care sectors.</p></div><div><p>In Japan, stocks increased on <a href="https://www.smartkarma.com/entities/shimano-inc" target="_blank" data-smartkarma-citation="entities:3777:1" rel="noopener">Shimano Inc (7309 JP)</a>, <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive Systems (6324 JP)</a>, <a href="https://www.smartkarma.com/entities/cocokara-fine-inc" target="_blank" data-smartkarma-citation="entities:15447:1" rel="noopener">Cocokara Fine (3098 JP)</a>, <a href="https://www.smartkarma.com/entities/nippon-steel-corporation" target="_blank" data-smartkarma-citation="entities:961:1" rel="noopener">Nippon Steel Corporation (5401 JP)</a> and <a href="https://www.smartkarma.com/entities/casio-computer-co-ltd" target="_blank" data-smartkarma-citation="entities:18338:1" rel="noopener">Casio Computer (6952 JP)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/pharma-foods-international" target="_blank" data-smartkarma-citation="entities:10530:1" rel="noopener">Pharma Foods International (2929 JP)</a>, <a href="https://www.smartkarma.com/entities/sumco-corp" target="_blank" data-smartkarma-citation="entities:379:1" rel="noopener">SUMCO Corp (3436 JP)</a>, <a href="https://www.smartkarma.com/entities/base-inc" target="_blank" data-smartkarma-citation="entities:28353:1" rel="noopener">BASE Inc (4477 JP)</a>, <a href="https://www.smartkarma.com/entities/showa-denko-k-k" target="_blank" data-smartkarma-citation="entities:1496:1" rel="noopener">Showa Denko K.K. (4004 JP)</a> and <a href="https://www.smartkarma.com/entities/kobe-steel-ltd" target="_blank" data-smartkarma-citation="entities:209:1" rel="noopener">Kobe Steel Ltd (5406 JP)</a>. Shorts increased in the Consumer Discretionary, Industrials and Consumer Staples sectors while decreasing in the Health Care and Information Technology sectors.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/hmm-co-ltd" target="_blank" data-smartkarma-citation="entities:13494:1" rel="noopener">HMM Co., Ltd. (011200 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-display-co-ltd" target="_blank" data-smartkarma-citation="entities:7145:1" rel="noopener">LG Display (034220 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-innovation-co-ltd" target="_blank" data-smartkarma-citation="entities:1268:1" rel="noopener">SK Innovation (096770 KS)</a>, <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a> and <a href="https://www.smartkarma.com/entities/pan-ocean-co-ltd" target="_blank" data-smartkarma-citation="entities:5279:1" rel="noopener">Pan Ocean (028670 KS)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/doosan-heavy-industries-construction" target="_blank" data-smartkarma-citation="entities:7389:1" rel="noopener">Doosan Heavy Industries &amp; Construction (034020 KS)</a>, <a href="https://www.smartkarma.com/entities/doosan-infracore-co-ltd" target="_blank" data-smartkarma-citation="entities:3982:1" rel="noopener">Doosan Infracore (042670 KS)</a>, <a href="https://www.smartkarma.com/entities/gs-retail-co-ltd" target="_blank" data-smartkarma-citation="entities:3867:1" rel="noopener">GS Retail (007070 KS)</a>, <a href="https://www.smartkarma.com/entities/ncsoft-corp" target="_blank" data-smartkarma-citation="entities:5169:1" rel="noopener">NCSOFT Corp (036570 KS)</a> and <a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics Co., (207940 KS)</a>. </p></div><div><p>In Taiwan, shorts increased on <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:6450:1" rel="noopener">United Microelectronics Corp (2303 TT)</a>, <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a>, <a href="https://www.smartkarma.com/entities/quanta-computer-inc" target="_blank" data-smartkarma-citation="entities:2754:1" rel="noopener">Quanta Computer (2382 TT)</a>, <a href="https://www.smartkarma.com/entities/winbond-electronics-corp" target="_blank" data-smartkarma-citation="entities:9177:1" rel="noopener">Winbond Electronics (2344 TT)</a> and <a href="https://www.smartkarma.com/entities/sitronix-technology-corp" target="_blank" data-smartkarma-citation="entities:5684:1" rel="noopener">Sitronix Technology (8016 TT)</a> while shorts covered on <a href="https://www.smartkarma.com/entities/yang-ming-marine-transport" target="_blank" data-smartkarma-citation="entities:8502:1" rel="noopener">Yang Ming Marine Transport (2609 TT)</a>, <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/silergy-corp" target="_blank" data-smartkarma-citation="entities:13998:1" rel="noopener">Silergy Corp (6415 TT)</a>, <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a> and <a href="https://www.smartkarma.com/entities/chunghwa-telecom-co-ltd" target="_blank" data-smartkarma-citation="entities:9181:1" rel="noopener">Chunghwa Telecom (2412 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Tencent (700 HK), China Merchants Bank H (3968 HK), Ping An Insurance (H) (2318 HK), Meituan (3690 HK) and Sunny Optical (2382 HK) while there was short covering on Weimob Inc. (2013 HK), Xiaomi Corp (1810 HK), JD.com Inc. (9618 HK), Nongfu Spring (9633 HK) and WuXi AppTec Co. Ltd. (2359 HK). Shorts increased in the Communication Services, Consumer Discretionary, Financials and Health Care sectors.In Japan, stocks increased on Shimano Inc (7309 JP), Harmonic Drive Systems (6324 JP), Cocokara Fine (3098 JP), Nippon Steel Corporation (5401 JP) and Casio Computer (6952 JP) while there was short covering on Pharma Foods International (2929 JP), SUMCO Corp (3436 JP), BASE Inc (4477 JP), Showa Denko K.K. (4004 JP) and Kobe Steel Ltd (5406 JP). Shorts increased in the Consumer Discretionary, Industrials and Consumer Staples sectors while decreasing in the Health Care and Information Technology sectors.In Korea, shorts increased on HMM Co., Ltd. (011200 KS), LG Display (034220 KS), SK Innovation (096770 KS), Kakao Corp (035720 KS) and Pan Ocean (028670 KS) while shorts were covered on Doosan Heavy Industries &amp; Construction (034020 KS), Doosan Infracore (042670 KS), GS Retail (007070 KS), NCSOFT Corp (036570 KS) and Samsung Biologics Co., (207940 KS). In Taiwan, shorts increased on United Microelectronics Corp (2303 TT), Novatek Microelectronics Corp (3034 TT), Quanta Computer (2382 TT), Winbond Electronics (2344 TT) and Sitronix Technology (8016 TT) while shorts covered on Yang Ming Marine Transport (2609 TT), TSMC (2330 TT), Silergy Corp (6415 TT), Yageo Corporation (2327 TT) and Chunghwa Telecom (2412 TT).

Asia Shorts: Tencent, CMB, Ping An, Weimob, WuXi, Shimano, Cocokara, HMM, Kakao, Doosan, Yang Ming

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong short data will be published after market close on 6 July due to the issuance of Black Rainstorm signal on 28 June and the public holiday on 1 July.</p></div><div><p>In Japan, stocks increased on <a href="https://www.smartkarma.com/entities/sharp-corp" target="_blank" data-smartkarma-citation="entities:391:1" rel="noopener">Sharp Corp (6753 JP)</a>, <a href="https://www.smartkarma.com/entities/plus-alpha-consulting-co-ltd" target="_blank" data-smartkarma-citation="entities:33441:1" rel="noopener">Plus Alpha Consulting (4071 JP)</a>, <a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi Corp (8058 JP)</a>, <a href="https://www.smartkarma.com/entities/cocokara-fine-inc" target="_blank" data-smartkarma-citation="entities:15447:1" rel="noopener">Cocokara Fine (3098 JP)</a> and <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/frontier-real-estate-invest" target="_blank" data-smartkarma-citation="entities:13526:1" rel="noopener">Frontier Real Estate Invest (8964 JP)</a>, <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a>, <a href="https://www.smartkarma.com/entities/anritsu-corp" target="_blank" data-smartkarma-citation="entities:3700:1" rel="noopener">Anritsu Corp (6754 JP)</a>, <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive Systems (6324 JP)</a> and <a href="https://www.smartkarma.com/entities/park24-co-ltd" target="_blank" data-smartkarma-citation="entities:5622:1" rel="noopener">Park24 Co Ltd (4666 JP)</a>. Shorts increased the most in the Consumer Discretionary, Industrials and Consumer Staples sectors.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/doosan-heavy-industries-construction" target="_blank" data-smartkarma-citation="entities:7389:1" rel="noopener">Doosan Heavy Industries &amp; Construction (034020 KS)</a>, <a href="https://www.smartkarma.com/entities/hanwha-solutions" target="_blank" data-smartkarma-citation="entities:8656:1" rel="noopener">Hanwha Solutions (009830 KS)</a>, <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/shinpoong-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:7296:1" rel="noopener">Shinpoong Pharmaceutical (019170 KS)</a> and <a href="https://www.smartkarma.com/entities/hmm-co-ltd" target="_blank" data-smartkarma-citation="entities:13494:1" rel="noopener">HMM Co., Ltd. (011200 KS)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>, <a href="https://www.smartkarma.com/entities/doosan-infracore-co-ltd" target="_blank" data-smartkarma-citation="entities:3982:1" rel="noopener">Doosan Infracore (042670 KS)</a>, <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-chem-ltd" target="_blank" data-smartkarma-citation="entities:3583:1" rel="noopener">LG Chem Ltd (051910 KS)</a>.</p></div><div><p>In Taiwan, shorts increased on <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">AU Optronics (2409 TT)</a>, <a href="https://www.smartkarma.com/entities/micro-star-international-co" target="_blank" data-smartkarma-citation="entities:8871:1" rel="noopener">Micro Star International Co (2377 TT)</a>, <a href="https://www.smartkarma.com/entities/walsin-technology-corp" target="_blank" data-smartkarma-citation="entities:11084:1" rel="noopener">Walsin Technology (2492 TT)</a>, <a href="https://www.smartkarma.com/entities/asustek-computer-inc" target="_blank" data-smartkarma-citation="entities:13002:1" rel="noopener">Asustek Computer (2357 TT)</a> and <a href="https://www.smartkarma.com/entities/ta-chen-stainless-pipe-co-ltd" target="_blank" data-smartkarma-citation="entities:2519:1" rel="noopener">TA Chen Stainless Pipe (2027 TT)</a> while shorts covered on <a href="https://www.smartkarma.com/entities/formosa-laboratories-inc" target="_blank" data-smartkarma-citation="entities:17658:1" rel="noopener">Formosa Laboratories (4746 TT)</a>, <a href="https://www.smartkarma.com/entities/china-steel-corp" target="_blank" data-smartkarma-citation="entities:962:1" rel="noopener">China Steel (2002 TT)</a>, <a href="https://www.smartkarma.com/entities/yang-ming-marine-transport" target="_blank" data-smartkarma-citation="entities:8502:1" rel="noopener">Yang Ming Marine Transport (2609 TT)</a>, <a href="https://www.smartkarma.com/entities/taiwan-cement" target="_blank" data-smartkarma-citation="entities:19736:1" rel="noopener">Taiwan Cement (1101 TT)</a> and <a href="https://www.smartkarma.com/entities/largan-precision-co-ltd" target="_blank" data-smartkarma-citation="entities:9126:1" rel="noopener">Largan Precision (3008 TT)</a>. </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong short data will be published after market close on 6 July due to the issuance of Black Rainstorm signal on 28 June and the public holiday on 1 July.In Japan, stocks increased on Sharp Corp (6753 JP), Plus Alpha Consulting (4071 JP), Mitsubishi Corp (8058 JP), Cocokara Fine (3098 JP) and Rakuten Inc (4755 JP) while there was short covering on Frontier Real Estate Invest (8964 JP), Monex Group Inc (8698 JP), Anritsu Corp (6754 JP), Harmonic Drive Systems (6324 JP) and Park24 Co Ltd (4666 JP). Shorts increased the most in the Consumer Discretionary, Industrials and Consumer Staples sectors.In Korea, shorts increased on Doosan Heavy Industries &amp; Construction (034020 KS), Hanwha Solutions (009830 KS), Celltrion Inc (068270 KS), Shinpoong Pharmaceutical (019170 KS) and HMM Co., Ltd. (011200 KS) while shorts were covered on SK Hynix (000660 KS), Doosan Infracore (042670 KS), Naver Corp (035420 KS), Samsung Electronics (005930 KS) and LG Chem Ltd (051910 KS).In Taiwan, shorts increased on AU Optronics (2409 TT), Micro Star International Co (2377 TT), Walsin Technology (2492 TT), Asustek Computer (2357 TT) and TA Chen Stainless Pipe (2027 TT) while shorts covered on Formosa Laboratories (4746 TT), China Steel (2002 TT), Yang Ming Marine Transport (2609 TT), Taiwan Cement (1101 TT) and Largan Precision (3008 TT). 

Asia Shorts: Sharp, Cocokara, Rakuten, Park24, Doosan, HMM, Hynix, LG Chem, AUO, Yang Ming, Largan

Japan

Harmonic Drive Systems Inc. manufactures speed reducers used in industrial robots, semiconductor manufacturing equipment, and other precision instruments. The Company offers cup type, hollow-shaft type, and rotary type speed reducers. Harmonic Drive Systems also produces gear heads and harmonic drive actuators.

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

Harmonic Drive Systems (6324 JP)

Harmonic Drive – Surprise Downward

HDS was already hit on Friday as a surprise MSCI deletion drove a 7.3% fall but with a surprising downward revision and stretched valuations we...

Mio Kato

SMC – OP Beat Incoming but so Is the Downcycle

SMC's 2Q was a nice beat but cyclical patterns suggest a revenue downturn is incoming at a time when valuations are extremely stretched.

Mio Kato

Keyence – Time to Step Off and Some Warning Signs for Markets

Keyence has been our top pick in the FA sector and has outperformed peers consistently but while we still consider it the highest quality name...

Mio Kato

Asia Shorts: Tencent, CMB, Ping An, Weimob, WuXi, Shimano, Cocokara, HMM, Kakao, Doosan, Yang Ming

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

Asia Shorts: Sharp, Cocokara, Rakuten, Park24, Doosan, HMM, Hynix, LG Chem, AUO, Yang Ming, Largan

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)