Japan Specialist

Mark Chadwick

Equity Bottom-Up

Mitsubishi Heavy Industries / Equity Bottom-Up

<ul>
<li>MHI benefits from two long-term supercycles—AI-driven power generation and global defense rearmament—with a recent pullback offering an appealing re-entry point. </li>
<li>A global gas-turbine supercycle is boosting orders, pricing power, and margins as demand from hyperscalers and utilities exceeds manufacturing capacity. </li>
<li>Markets have yet to fully price in structurally higher earnings and valuations driven by AI-linked power demand and persistent turbine supply constraints.</li>
</ul>


MHI benefits from two long-term supercycles—AI-driven power generation and global defense rearmament—with a recent pullback offering an appealing re-entry point. 
A global gas-turbine supercycle is boosting orders, pricing power, and margins as demand from hyperscalers and utilities exceeds manufacturing capacity. 
Markets have yet to fully price in structurally higher earnings and valuations driven by AI-linked power demand and persistent turbine supply constraints.


MHI (7011): AI Power Demand and Gas-Turbine Supercycle Accelerate

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.

<ul>
<li>Laser wireless power transmission technology opens new defense, dual-use and civilian market opportunities. </li>
<li>Japanese politicians inclined to spend more on defense, but worried about the national budget. Likely to split the difference between 2% of GDP and Trump's demands. </li>
<li>Aircraft, Defense &amp; Space to drive sales and profit growth through 2030. Buy on dips for the long term.</li>
</ul>


Laser wireless power transmission technology opens new defense, dual-use and civilian market opportunities. 
Japanese politicians inclined to spend more on defense, but worried about the national budget. Likely to split the difference between 2% of GDP and Trump's demands. 
Aircraft, Defense &amp; Space to drive sales and profit growth through 2030. Buy on dips for the long term.


MHI (7011 JP): Laser Power Transmission Positive, Political Support Unclear

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyzed the changes in margin trading positions of JPX stocks as of Dec 12th. The aggregated net margin trading position is USD19,648m.</li>
<li>We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.</li>
<li>We highlight net margin buy/sell changes in Ci Medical, Toyoda Gosei, SoftBank, Toyota Motor, Lasertec, Skylark, Nintendo, Kawasaki Heavy Industries, Mitsubishi UFJ Financial, Tokyo Electron, Ci Medical, Toyoda Gosei.</li>
</ul>


We analyzed the changes in margin trading positions of JPX stocks as of Dec 12th. The aggregated net margin trading position is USD19,648m.
We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.
We highlight net margin buy/sell changes in Ci Medical, Toyoda Gosei, SoftBank, Toyota Motor, Lasertec, Skylark, Nintendo, Kawasaki Heavy Industries, Mitsubishi UFJ Financial, Tokyo Electron, Ci Medical, Toyoda Gosei.


JPX Margin Trading Weekly (Dec 12th): Ci Medical, Toyoda Gosei, SoftBank, Toyota Motor, Lasertec

Global Materials | Industrials | Commodities

Rahul Jain

<ul>
<li>MHI posted Q1 FY25 revenue +7% and business profit +25% with resilient Energy/Aero margins.</li>
<li>Orders/Backlog/Guidance: Order intake fell 4% on tough comps, but backlog hit a record ¥10.8 tn (2.1× cover); FY25 guidance of ¥4.95 tn revenue and ¥380 bn profit maintained.</li>
<li>Valuation/Growth: Shares trade at ~19× FY27E EV/EBITDA vs peers at 10–15×, supported by 5–6% revenue CAGR and ~9–10% EPS CAGR through FY28.</li>
</ul>


MHI posted Q1 FY25 revenue +7% and business profit +25% with resilient Energy/Aero margins.
Orders/Backlog/Guidance: Order intake fell 4% on tough comps, but backlog hit a record ¥10.8 tn (2.1× cover); FY25 guidance of ¥4.95 tn revenue and ¥380 bn profit maintained.
Valuation/Growth: Shares trade at ~19× FY27E EV/EBITDA vs peers at 10–15×, supported by 5–6% revenue CAGR and ~9–10% EPS CAGR through FY28.


MHI (7011 JP) Q1 Beat: Record Backlog & Policy Tailwinds Support Premium Valuation

<ul>
<li>MHI has delivered a strong turnaround over the past four years, with revenue up 26% and business profit expanding nearly 10x from FY22 to FY25</li>
<li>The consolidated order backlog crossed ¥10.2 trillion in FY25, up ~22% YoY, offering ~2 years of forward revenue visibility and skewed toward high-margin Energy and Defense segments.</li>
<li>While the stock has rallied sharply, management’s solid FY25–30 guidance, along with structural tailwinds from energy transition and defense spending, continue to underpin the long-term thesis.</li>
</ul>


MHI has delivered a strong turnaround over the past four years, with revenue up 26% and business profit expanding nearly 10x from FY22 to FY25
The consolidated order backlog crossed ¥10.2 trillion in FY25, up ~22% YoY, offering ~2 years of forward revenue visibility and skewed toward high-margin Energy and Defense segments.
While the stock has rallied sharply, management’s solid FY25–30 guidance, along with structural tailwinds from energy transition and defense spending, continue to underpin the long-term thesis.


Mitsubishi Heavy (7011) – Strong Earnings, ¥10.2T Backlog, Macro Tailwinds Remain Supportive

Japan

Mitsubishi Heavy Industries, Ltd. is a comprehensive heavy machinery maker. The Company manufactures machinery, ships, turbines and engines, prime movers, aircrafts, and machine parts for military and commercial use.  Mitsubishi Heavy Industries also researches and develops nuclear power plants.

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Mitsubishi Heavy Industries (7011 JP)

MHI (7011): AI Power Demand and Gas-Turbine Supercycle Accelerate

MHI benefits from long-term supercycles in AI-driven power generation and global defense rearmament, with a recent pullback providing a good re...

Mark Chadwick

MHI (7011 JP): Laser Power Transmission Positive, Political Support Unclear

Political support for a Japanese defense budget in excess of 2% remains uncertain, but profit likely to grow through 2030. Laser power transmission...

Scott Foster

JPX Margin Trading Weekly (Dec 12th): Ci Medical, Toyoda Gosei, SoftBank, Toyota Motor, Lasertec

We analyzed JPX margin trading positions report for the past week and highlighted Ci Medical (3540 JP), Toyoda Gosei (7282 JP), SoftBank (9984 JP),...

Ke Yan, CFA, FRM

MHI (7011 JP) Q1 Beat: Record Backlog & Policy Tailwinds Support Premium Valuation

MHI reports strong Q1 FY25 results with revenue and profit growth, record backlog, and solid growth prospects driving higher valuation compared to...

Rahul Jain

Mitsubishi Heavy (7011) – Strong Earnings, ¥10.2T Backlog, Macro Tailwinds Remain Supportive

MHI's strong turnaround in revenue and profit, backed by a solid order backlog and promising guidance, supports long-term growth potential despite...

Rahul Jain

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

MHI (7011): AI Power Demand and Gas-Turbine Supercycle Accelerate

​MHI benefits from long-term supercycles in AI-driven power generation and global defense rearmament, with a recent pullback providing a good re...

Mark Chadwick

MHI (7011 JP): Laser Power Transmission Positive, Political Support Unclear

Political support for a Japanese defense budget in excess of 2% remains uncertain, but profit likely to grow through 2030. Laser power transmission...

Scott Foster

JPX Margin Trading Weekly (Dec 12th): Ci Medical, Toyoda Gosei, SoftBank, Toyota Motor, Lasertec

We analyzed JPX margin trading positions report for the past week and highlighted Ci Medical (3540 JP), Toyoda Gosei (7282 JP), SoftBank (9984 JP),...

Ke Yan, CFA, FRM

MHI (7011 JP) Q1 Beat: Record Backlog & Policy Tailwinds Support Premium Valuation

​MHI reports strong Q1 FY25 results with revenue and profit growth, record backlog, and solid growth prospects driving higher valuation compared to...

Rahul Jain

Mitsubishi Heavy (7011) – Strong Earnings, ¥10.2T Backlog, Macro Tailwinds Remain Supportive

​MHI's strong turnaround in revenue and profit, backed by a solid order backlog and promising guidance, supports long-term growth potential despite...

Rahul Jain

MHI benefits from long-term supercycles in AI-driven power generation and global defense rearmament, with a recent pullback providing a good re...

MHI reports strong Q1 FY25 results with revenue and profit growth, record backlog, and solid growth prospects driving higher valuation compared to...

MHI's strong turnaround in revenue and profit, backed by a solid order backlog and promising guidance, supports long-term growth potential despite...