Japan Specialist

Mark Chadwick

Equity Bottom-Up

Kawasaki Heavy Industries / Equity Bottom-Up

<ul>
<li>Japan's newly approved hydrogen strategy has ignited a stock market rally in related names: KHI (+20%) Iwatani (+15%) Kansai Elec (+2%)</li>
<li>Japan government approved higher supply targets for hydrogen to bring the hydrogen strategy in line with the most recent energy mix targets</li>
<li>
<strong>Kawasaki Heavy Industries</strong> plays a key role in Japan's hydrogen supply chain, specializing in liquefied hydrogen and innovative initiatives</li>
</ul>


Japan's newly approved hydrogen strategy has ignited a stock market rally in related names: KHI (+20%) Iwatani (+15%) Kansai Elec (+2%)
Japan government approved higher supply targets for hydrogen to bring the hydrogen strategy in line with the most recent energy mix targets

Kawasaki Heavy Industries plays a key role in Japan's hydrogen supply chain, specializing in liquefied hydrogen and innovative initiatives


Kawasaki Heavy (7012) | Hydrogen Strategy Ignites Stock Market

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS.  US Equities Soar on Debt Resolution and Payrolls; Markets continue to price in Fed Pause; Leaks about China Property stimulus support sentiment; Saudi Arabia slashes oil output.</li>
<li>JAPAN. NKY Futs +1.4% vs Cash;  JP bid to continue after US Rally; Inflation pushing households to stocks; Japan prioritizes hydrogen; Companies face a raft of proposals at June AGMs</li>
<li>NUGGET. Where Nvidia Goes, Advantest Follows; Advantest now simply just a proxy on Nvidia's share price</li>
</ul>


OVERSEAS.  US Equities Soar on Debt Resolution and Payrolls; Markets continue to price in Fed Pause; Leaks about China Property stimulus support sentiment; Saudi Arabia slashes oil output.
JAPAN. NKY Futs +1.4% vs Cash;  JP bid to continue after US Rally; Inflation pushing households to stocks; Japan prioritizes hydrogen; Companies face a raft of proposals at June AGMs
NUGGET. Where Nvidia Goes, Advantest Follows; Advantest now simply just a proxy on Nvidia's share price


Ohayo Japan |Stocks Soar on Debt Resolution/Jobs/China; NUGGET: Where Nvidia Goes, Advantest Follows

<ul>
<li>We are bullish on KHI and see around 40% upside for the share price</li>
<li>Over the next two years, we expect strong profit growth on recovery in aircraft parts, jet engines and military equipment</li>
<li>KHI is likely to be a key beneficiary of the Hydrogen economy and is well placed to build a new earnings driver over the next decade</li>
</ul>


We are bullish on KHI and see around 40% upside for the share price
Over the next two years, we expect strong profit growth on recovery in aircraft parts, jet engines and military equipment
KHI is likely to be a key beneficiary of the Hydrogen economy and is well placed to build a new earnings driver over the next decade


Kawasaki Heavy Ind (7012) | Building a Hydrogen Society

<ul>
<li>It was a relatively quiet week for the broader index. However, there was a big sector shift towards tech and AI winners.</li>
<li>Japanese Heavy Equipment makers have technologies that will be in demand for decades. KHI trades below book. </li>
<li>As we head into AGM season, we take a look at interesting activist campaigns. </li>
</ul>


It was a relatively quiet week for the broader index. However, there was a big sector shift towards tech and AI winners.
Japanese Heavy Equipment makers have technologies that will be in demand for decades. KHI trades below book. 
As we head into AGM season, we take a look at interesting activist campaigns. 


Japan Weekly | Advantest, Ibiden, Kawasaki Heavy, SK Kaken, NCHD

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/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a> reports FY2022 results on 12 May. Since the announcement of Japan Industrial Partners (JIP)’s pre-conditional tender offer of JPY4,620 per share, there have been no progress updates. </li>
<li>The spread to the offer is currently 4.2%, suggesting a reasonable probability of success. However, the offer's success ultimately depends on shareholder backing, particularly from the activists on the register.</li>
<li>Shareholder support continues to pose a considerable risk as the peers have re-rated, the offer’s price ratio remains unattractive and the declining premium of the offer’s implied multiple vs peers.</li>
</ul>



Toshiba Corp (6502 JP) reports FY2022 results on 12 May. Since the announcement of Japan Industrial Partners (JIP)’s pre-conditional tender offer of JPY4,620 per share, there have been no progress updates. 
The spread to the offer is currently 4.2%, suggesting a reasonable probability of success. However, the offer's success ultimately depends on shareholder backing, particularly from the activists on the register.
Shareholder support continues to pose a considerable risk as the peers have re-rated, the offer’s price ratio remains unattractive and the declining premium of the offer’s implied multiple vs peers.


Toshiba (6502 JP): Tender Offer Risk/Reward

Japan

Kawasaki Heavy Industries, Ltd. designs, develops, and manufactures transport equipment and industrial heavy machinery for military and commercial use.  The Company produces ships, railroad cars, aircraft engines and parts, hydraulic and gas turbines, submarine engines, boilers, and industrial robots.  Kawasaki Heavy Industries offers engineering and construction services to industrial plants.

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Kawasaki Heavy Industries (7012 JP)

Kawasaki Heavy (7012) | Hydrogen Strategy Ignites Stock Market

Kawasaki Heavy Industries' involvement in the hydrogen supply chain, its expertise in liquefied hydrogen, and innovative initiatives provide...

Mark Chadwick

Ohayo Japan |Stocks Soar on Debt Resolution/Jobs/China; NUGGET: Where Nvidia Goes, Advantest Follows

US Equites well bid as SPX closes up +1.5% on Debt relief/Strong payrolls. NKY Futs +1.4% vs Cash; Inflation pushing households to stocks;...

Mark Chadwick

Kawasaki Heavy Ind (7012) | Building a Hydrogen Society

We expect strong profit growth on recovery in aircraft parts, engines and military equipment. Over the longer term, we expect KHI to benefit from...

Mark Chadwick

Japan Weekly | Advantest, Ibiden, Kawasaki Heavy, SK Kaken, NCHD

Foreign investors continue to flood into the Japanese market. There are plenty of AI beneficiaries and plenty of old economy companies that have in...

Mark Chadwick

Toshiba (6502 JP): Tender Offer Risk/Reward

Shareholder support continues to pose a considerable risk as the peers have re-rated, the offer’s price ratio remains unattractive and the...

Arun George

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