Independent Insight Provider, Japanese equities, LightStream Research

Scott Foster

Independent Insight Provider, 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>Ushio is making substantial investments in it core light source technologies, sacrificing short term profit for long-term growth potential.</li>
<li>Geared to rising demand for EUV mask and IC package lithography, bio-medical equipment, and solid-state light sources. Digital cinema business rebounding from COVID.</li>
<li>Selling at 21x current EPS guidance, 12x management's FY Mar-26 EPS target and 0.9x book value. Upside potential to book value while waiting for confirmation of forecast recovery.</li>
</ul>


Ushio is making substantial investments in it core light source technologies, sacrificing short term profit for long-term growth potential.
Geared to rising demand for EUV mask and IC package lithography, bio-medical equipment, and solid-state light sources. Digital cinema business rebounding from COVID.
Selling at 21x current EPS guidance, 12x management's FY Mar-26 EPS target and 0.9x book value. Upside potential to book value while waiting for confirmation of forecast recovery.


Ushio (6925 JP): Preparing for the Next Growth Cycle

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>Market Watch: This week, the Topix Index gained 44pts (2%) to close at 2,309, influenced by Wall Street's response to US inflation data and expectations of extended elevated interest rates.</li>
<li>Major Movers: Lasertec (6920) surged +17%, Fast Retailing (9983) rose +12%, and Monotaro (3064) declined -18%</li>
<li>Activist Watch: ValueAct lifted its stake in Topcon. I like the LT fundamentals for the company and look forward to positive dialogue with the activist</li>
</ul>


Market Watch: This week, the Topix Index gained 44pts (2%) to close at 2,309, influenced by Wall Street's response to US inflation data and expectations of extended elevated interest rates.
Major Movers: Lasertec (6920) surged +17%, Fast Retailing (9983) rose +12%, and Monotaro (3064) declined -18%
Activist Watch: ValueAct lifted its stake in Topcon. I like the LT fundamentals for the company and look forward to positive dialogue with the activist


Japan Weekly | Lasertec, Fast Retailing, Monotaro, Topcon

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari (4385 JP)</a>, <a href="https://www.smartkarma.com/entities/lasertec-corp" target="_blank" data-smartkarma-citation="entities:4126:1" rel="noopener">Lasertec (6920 JP)</a> and <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori (9843 JP)</a> will replace <a href="https://www.smartkarma.com/entities/nippon-sheet-glass-co-ltd" target="_blank" data-smartkarma-citation="entities:9013:1" rel="noopener">Nippon Sheet Glass (5202 JP)</a>, <a href="https://www.smartkarma.com/entities/mitsui-e-s-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2402:1" rel="noopener">Mitsui E&amp;S (7003 JP)</a> and <a href="https://www.smartkarma.com/entities/matsui-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:6553:1" rel="noopener">Matsui Securities (8628 JP)</a> in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a>.</li>
<li>As expected, <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a> will be added at half the planned PAF since the trading value is low compared to the expected index weight.</li>
<li>Passive trackers need to buy between 1-17 days of ADV on the adds while selling between 1.2-16.5 days of ADV on the deletes. There is a big funding trade too.</li>
</ul>



Mercari (4385 JP), Lasertec (6920 JP) and Nitori (9843 JP) will replace Nippon Sheet Glass (5202 JP), Mitsui E&amp;S (7003 JP) and Matsui Securities (8628 JP) in the Nikkei 225.
As expected, Nitori Holdings (9843 JP) will be added at half the planned PAF since the trading value is low compared to the expected index weight.
Passive trackers need to buy between 1-17 days of ADV on the adds while selling between 1.2-16.5 days of ADV on the deletes. There is a big funding trade too.


Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT

<ul>
<li>OVERSEAS. US LABOR DAY HOLIDAY. With US out, No leaders in Global Equities; European shares closed flat on thin Volumes;  China's measures to support Property market taking hold. </li>
<li>JAPAN.US Markets Off. NKY Futs vs Cash -0.1%; USDJPY 146.5; Nikkei Rebal: Mercari, Lasertec, Nitori ADDED; Nippon Sheet Glass, Mitsui E&amp;S, Matsui Sec OUT; JFE 200bn Equity/CB raising  </li>
<li>JAPAN X: JFE Holdings Plans to Raise ¥200 Billion for Carbon Emissions Reduction Efforts. Still need clarity willingness of customers to accept "green pricing".  Watch Nippon Steel and Kobe Steel. </li>
</ul>


OVERSEAS. US LABOR DAY HOLIDAY. With US out, No leaders in Global Equities; European shares closed flat on thin Volumes;  China's measures to support Property market taking hold. 
JAPAN.US Markets Off. NKY Futs vs Cash -0.1%; USDJPY 146.5; Nikkei Rebal: Mercari, Lasertec, Nitori ADDED; Nippon Sheet Glass, Mitsui E&amp;S, Matsui Sec OUT; JFE 200bn Equity/CB raising  
JAPAN X: JFE Holdings Plans to Raise ¥200 Billion for Carbon Emissions Reduction Efforts. Still need clarity willingness of customers to accept "green pricing".  Watch Nippon Steel and Kobe Steel. 


Ohayo Japan| Lack of Direction with US Closed; JAPAN X: JFE to Raise ¥200bn for Green Steel Drive

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Capital Markets

Shibaura Mechatronics / Equity Capital Markets

<ul>
<li>Five plus years ago, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a> sold down a 26% stake in small cap <a href="https://www.smartkarma.com/entities/shibaura-mechatronics-corp" target="_blank" data-smartkarma-citation="entities:8763:1" rel="noopener">Shibaura Mechatronics (6590 JP)</a> to get to a consolidated 13%-ish stake. </li>
<li>This was discussed in <a href="https://www.smartkarma.com/insights/toshiba-selldown-of-shibaura-mechatronics-6590" target="_blank" data-smartkarma-citation="insights:15870" rel="noopener">Toshiba Selldown of Shibaura Mechatronics (6590)</a> back then. Yesterday, we got news Toshiba would sell out its remaining stake. And there's a buyback. Maybe.</li>
<li>The stock has reacted badly on Day 1, despite a lack of dilution. Shareholder structure matters. </li>
</ul>


Five plus years ago, Toshiba Corp (6502 JP) sold down a 26% stake in small cap Shibaura Mechatronics (6590 JP) to get to a consolidated 13%-ish stake. 
This was discussed in Toshiba Selldown of Shibaura Mechatronics (6590) back then. Yesterday, we got news Toshiba would sell out its remaining stake. And there's a buyback. Maybe.
The stock has reacted badly on Day 1, despite a lack of dilution. Shareholder structure matters. 


Shibaura Mechatronics (6590) Secondary Offering & Buyback

Japan

SCREEN Holdings Co Ltd.  manufactures and sell semiconductors, FPD devices, commercial printing and printed circuit boards(PCB). The company also provides additional services for its products.

SUMCO Corporation manufactures silicon wafers for the semiconductor industry. The Company produces silicon wafers used to produce solar batteries as well as ultra-high purity quartz used to produce vessels for silicon manufacturing process. SUMCO markets its products worldwide.

ROHM COMPANY LIMITED manufactures custom linear integrated circuits and semiconductor devices for use primarily in consumer electronics.  The Company has plants and sales offices worldwide.  Rohm's subsidiaries include Wako Electric and Apollo Electronics.

SHINKO ELECTRIC INDUSTRIES CO., LTD. designs, manufactures, and markets advanced electronic materials, such as semiconductor packages, including leadframes, and PLP(Plastics Laminated Packages).  The Company markets its products worldwide through a network of sales offices in such places as the Philippines, Germany, and Hong Kong.

ADVANTEST CORPORATION produces semiconductor testing devices and electronic measuring instruments.  The Company's products include large-scale integration (LSI) test systems, memory test systems, dynamic test handlers, network analyzers, electronic meters, optical testing devices, and signal sources.

RORZE CORPORATION manufactures printed circuit board conveyers and wafer handlers for semiconductor manufacturing.  The Company also produces sorters and vacuum chamber robots, as well as controllers and stepping motor drivers used in various automation systems.  Rorze provides parts replacement and repair services for its products.

TOKYO SEIMITSU CO., LTD. manufactures and sells semiconductor manufacturing equipment and measuring instruments.  The Company produces wafer probing machines, wafer dicing machines, electron beam lithography systems, wafer inspection systems, and chemical mechanical planarizers (CMP) systems.

ULVAC, Inc. manufactures vacuum devices for industries such as semiconductor, electronics, chemical, pharmaceutical and food.  The Company's products include pumps, valves, gas analyzers, leak detectors, and surface profile measurement.

MICRONICS JAPAN CO., LTD. designs, manufactures, and markets probe cards, which are used to inspect semiconductors and integrated circuits (ICs).  The Company also makes wafer probers, probe card testers, IC handlers, and inspection devices used for liquid crystal display (LCD) manufacturing.

Mitsui High-tec, Inc. produces integrated circuit leadframes, assembly parts, and related equipment.  The Company also manufactures and sells precision machine tools, such as metal molds for presses and machine tools. Mitsui High-tec also operates a real estate business.

ASE Technology Holding Co., Ltd. offers assembly and testing services. The Company provides outsourced assembly, semiconductor testing, semiconductor packaging, and other related services. ASE Technology Holding operates in Taiwan.

MA-COM Technology Solutions Holdings Inc. provides high performance analog semiconductor solutions. The Company supplies semiconductors, active and passive components, and sub-assemblies for use in radio frequency, microwave, and millimeter wave applications. MA-COM Technology Solutions serves customers throughout the United States.

Sanan Optoelectronics Co., Ltd. operates in the business of researching, producing and selling of LED epitaxial wafers and wafers.

MKS Instruments, Inc. develops, manufactures, and supplies instruments and components used to control and analyze gases in semiconductor manufacturing and similar industrial manufacturing processes. The Company's products are used to manufacture flat panel displays, magnetic and optical storage devices and media, solar cells, fiber optic cables, and diamond thin films.

Skyworks Solutions, Inc., a wireless semiconductor company, designs and manufactures radio frequency and complete semiconductor system solutions for mobile communications applications.  The Company provides front-end modules, radio frequency subsystems, and system solutions to wireless handset and infrastructure customers worldwide.

United Microelectronics Corporation designs, manufactures, and markets integrated circuits (ICs) and related electronic products.  The Company's main products are consumer electronic ICs, memory ICs, personal computer peripheral ICs, and communication ICs.

Realtek Semiconductor Corp. designs, tests, and distributes integrated circuits which are used in consumer electronics, computer systems and peripherals, and communication network hardware.  The Company also provides technical counseling and systems software services.

Lattice Semiconductor Corporation designs, develops, and markets high speed programmable logic devices.  The Company's products provide electronic systems customers with quickly designed, easily configured components.  Lattice markets its products to original equipment manufacturers of communication, computing, industrial, and military systems.

JCET Group Co., Ltd. operates in the semiconductor industry.  The Company's products include discrete devices and integrated circuits.  Through its subsidiaries, Jiangsu Changjiang also manufactures signal lamps used in industrial equipment and anti-theft door systems for consumer use.

Onto Innovation Inc. provides process control solutions and inspection systems. The Company offers solutions which primarily used in the fabrication of semiconductors and other solid-state devices, as well as industrial and scientific applications. Onto Innovation serves customers in the United States.

Lasertec Corporation develops, designs, manufactures and markets photomask inspection systems to make semiconductor devices, confocal scanning laser microscopes and liquid crystal display (LCD) inspection systems.

Price Gauge
52-week Range	0.00 - 0.00
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Lasertec Corp (6920 JP)

Ushio (6925 JP): Preparing for the Next Growth Cycle

Profits down sharply due to bottoming semiconductor cycle and investment in EUV and IC package lithography and other long-term opportunities. Huge...

Scott Foster

Japan Weekly | Lasertec, Fast Retailing, Monotaro, Topcon

Topix Index rises despite US inflation data and expectations for higher interest rates. Lasertec and Fast Retailing see gains, while Monotaro...

Mark Chadwick

Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT

The adds are broadly flat since announcement of the changes. The deletes are higher and short interest has continued to increase. The stocks with...

Brian Freitas

Ohayo Japan| Lack of Direction with US Closed; JAPAN X: JFE to Raise ¥200bn for Green Steel Drive

US Markets Off. NKY Futs vs Cash -0.1%; USDJPY 146.5; Nikkei Rebal: Mercari, Lasertec, Nitori ADDED; Nippon Sheet Glass, Mitsui E&S, Matsui Sec...

Mark Chadwick

Shibaura Mechatronics (6590) Secondary Offering & Buyback

Shibaura Mechatronics (one of the coolest company names out there) sees a Secondary Offer where original uncle Toshiba sells out. Supply/demand...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Ushio (6925 JP): Preparing for the Next Growth Cycle

Profits down sharply due to bottoming semiconductor cycle and investment in EUV and IC package lithography and other long-term opportunities. Huge...

Scott Foster

Japan Weekly | Lasertec, Fast Retailing, Monotaro, Topcon

​Topix Index rises despite US inflation data and expectations for higher interest rates. Lasertec and Fast Retailing see gains, while Monotaro...

Mark Chadwick

Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT

The adds are broadly flat since announcement of the changes. The deletes are higher and short interest has continued to increase. The stocks with...

Brian Freitas

Ohayo Japan| Lack of Direction with US Closed; JAPAN X: JFE to Raise ¥200bn for Green Steel Drive

US Markets Off. NKY Futs vs Cash -0.1%; USDJPY 146.5; Nikkei Rebal: Mercari, Lasertec, Nitori ADDED; Nippon Sheet Glass, Mitsui E&S, Matsui Sec...

Mark Chadwick

Shibaura Mechatronics (6590) Secondary Offering & Buyback

Shibaura Mechatronics (one of the coolest company names out there) sees a Secondary Offer where original uncle Toshiba sells out. Supply/demand...

Travis Lundy

Topix Index rises despite US inflation data and expectations for higher interest rates. Lasertec and Fast Retailing see gains, while Monotaro...