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

Mitsubishi Heavy Industries / Equity Bottom-Up

<ul>
<li>Japan's top defense and aerospace contractor is being rerated to account for the limits on relying on the U.S. for defense in an alarming national security environment.</li>
<li>A reasonably optimistic scenario brings MHI's P/E ratio down to 22X in FY Mar-28, by which time Japan's defense spending is scheduled reach 2% of GDP.</li>
<li>The Trump administration wants Japan to spend more, but getting the budget through the national Diet is difficult enough as it is. </li>
</ul>


Japan's top defense and aerospace contractor is being rerated to account for the limits on relying on the U.S. for defense in an alarming national security environment.
A reasonably optimistic scenario brings MHI's P/E ratio down to 22X in FY Mar-28, by which time Japan's defense spending is scheduled reach 2% of GDP.
The Trump administration wants Japan to spend more, but getting the budget through the national Diet is difficult enough as it is. 


MHI (7011 JP): U.S. Presses Japan to Spend More on Defense

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Thematic (Sector/Industry)

<ul>
<li>Asymmetric return opportunity in a short position in Japan - downside vs upside potential is skewed to the downside.</li>
<li>The weak JPY hasn’t helped the overall market and rising risk of a reversal similar to August 2024</li>
<li>We look at some sectors and stocks that are good short candidates</li>
</ul>


Asymmetric return opportunity in a short position in Japan - downside vs upside potential is skewed to the downside.
The weak JPY hasn’t helped the overall market and rising risk of a reversal similar to August 2024
We look at some sectors and stocks that are good short candidates


Tactical Trading - Time to Sell Japan. Again.

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

<ul>
<li>Tech and AI down again ahead of Trump's tariff 'liberation day' on April 2.</li>
<li>Wolfspeed -51% puts Renesas's $2bn advance payment for SiC under jeopardy.</li>
<li>Dead rat, anyone? Should be positive for Yoshinoya as Sukiya shutters most stores.</li>
</ul>


Tech and AI down again ahead of Trump's tariff 'liberation day' on April 2.
Wolfspeed -51% puts Renesas's $2bn advance payment for SiC under jeopardy.
Dead rat, anyone? Should be positive for Yoshinoya as Sukiya shutters most stores.


Japan Morning Connection: US Defense Secretary Hegseth Reconfirming Commitment to Japan

<ul>
<li>MHI shot up 13% on U.S. election day, but dropped back this morning. A degree of optimism is warranted, but there are negatives as well as positives.</li>
<li>Full year FY-Mar-25 orders guidance has been raised, but the increase came in Energy, not Aircraft, Defense &amp; Space, and total orders are still likely to be down this year.</li>
<li>An increase in defense orders can be expected, however, as Trump forces Japan to take more responsibility for its own defense. Hold or buy for the long term.</li>
</ul>


MHI shot up 13% on U.S. election day, but dropped back this morning. A degree of optimism is warranted, but there are negatives as well as positives.
Full year FY-Mar-25 orders guidance has been raised, but the increase came in Energy, not Aircraft, Defense &amp; Space, and total orders are still likely to be down this year.
An increase in defense orders can be expected, however, as Trump forces Japan to take more responsibility for its own defense. Hold or buy for the long term.


Japan Specialist

Mark Chadwick

<ul>
<li>MHI reports impressive YoY growth in order intake, revenues, and profits across Energy Systems and Defense Equipment segments in Q2 2023.</li>
<li>Despite a 62% YTD stock price increase, strong order backlog and underlying drivers suggest resilience in a challenging economic climate.</li>
<li>The company benefits from global trends in decarbonization and increased national security spending, positioning itself as a leader in gas turbines and defense technology.</li>
</ul>


MHI reports impressive YoY growth in order intake, revenues, and profits across Energy Systems and Defense Equipment segments in Q2 2023.
Despite a 62% YTD stock price increase, strong order backlog and underlying drivers suggest resilience in a challenging economic climate.
The company benefits from global trends in decarbonization and increased national security spending, positioning itself as a leader in gas turbines and defense technology.


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 JP): U.S. Presses Japan to Spend More on Defense

Up 40% in the past month, but still reasonably valued on a 3-year view if Japan's defense spending rises and margins expand as expected. 22X...

Scott Foster

Tactical Trading - Time to Sell Japan. Again.

It's the perfect storm for the Japanese market. Tariffs, JPY, rising rates and inflation, with growth weakening. The 2,800 level on Topix has been...

Rikki Malik

Japan Morning Connection: US Defense Secretary Hegseth Reconfirming Commitment to Japan

Tech and AI still down as Trump's liberation day approaches; Wolfspeed -51% puts Renesas in poor position, Yoshinoya should benefit from Sukiya...

Andrew Jackson

MHI (7011): Trump 2.0 a Net Positive

Trump's return forces Japan to look out for number one - good for MHI, Japan's top defense contractor. Orders guidance has been raised slightly....

Scott Foster

MHI (7011) | Rockets and Renewables

MHI reports strong growth in Q2 2023, benefiting from global trends in decarbonization and defense spending, positioning itself as a leader in gas...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

MHI (7011 JP): U.S. Presses Japan to Spend More on Defense

Up 40% in the past month, but still reasonably valued on a 3-year view if Japan's defense spending rises and margins expand as expected. 22X...

Scott Foster

Tactical Trading - Time to Sell Japan. Again.

It's the perfect storm for the Japanese market. Tariffs, JPY, rising rates and inflation, with growth weakening. The 2,800 level on Topix has been...

Rikki Malik

Japan Morning Connection: US Defense Secretary Hegseth Reconfirming Commitment to Japan

Tech and AI still down as Trump's liberation day approaches; Wolfspeed -51% puts Renesas in poor position, Yoshinoya should benefit from Sukiya...

Andrew Jackson

MHI (7011): Trump 2.0 a Net Positive

Trump's return forces Japan to look out for number one - good for MHI, Japan's top defense contractor. Orders guidance has been raised slightly....

Scott Foster

MHI (7011) | Rockets and Renewables

​MHI reports strong growth in Q2 2023, benefiting from global trends in decarbonization and defense spending, positioning itself as a leader in gas...

Mark Chadwick

MHI reports strong growth in Q2 2023, benefiting from global trends in decarbonization and defense spending, positioning itself as a leader in gas...