Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

Hon Hai Precision Industry / Equity Bottom-Up

<ul>
<li>Hon Hai's upcoming results date hasn't yet been publicly announced, but last year it was 16 March.</li>
<li>Gross margin could come in well below consensus, and net profit could be minimal for 4Q22E. Look for reiteration of its longer-term margin target from management.</li>
<li>We remain structurally bullish on Hon Hai and see it as positioned favorably relative to U.S. China semiconductor restrictions. Our TP for Hon Hai is $155, over 50% above today.</li>
</ul>


Hon Hai's upcoming results date hasn't yet been publicly announced, but last year it was 16 March.
Gross margin could come in well below consensus, and net profit could be minimal for 4Q22E. Look for reiteration of its longer-term margin target from management.
We remain structurally bullish on Hon Hai and see it as positioned favorably relative to U.S. China semiconductor restrictions. Our TP for Hon Hai is $155, over 50% above today.


Hon Hai 4Q22 Results Preview: Brace for a Weak Print, But EV Structural Driver Intact

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS.  SPX Rallies as Earnings take centre stage; Telsa rips as Musk see 2m in Sales; Auto Semis in Play as STMicro beats - lifts sector; Seagate at turning point</li>
<li>JAPAN.  NKY Futs +0.5% vs Cash; USDJPY Steady at 130.22; Baton gets passed at Toyota; Double D/G of Shippers downgrade to Sell ; EARNINGS TODAY: All about Fanuc</li>
<li>DAILY NUGGET. Toyota - End of an Era, and the start of another. We expect new CEO Sato to accelerate the EV shift !</li>
</ul>


OVERSEAS.  SPX Rallies as Earnings take centre stage; Telsa rips as Musk see 2m in Sales; Auto Semis in Play as STMicro beats - lifts sector; Seagate at turning point
JAPAN.  NKY Futs +0.5% vs Cash; USDJPY Steady at 130.22; Baton gets passed at Toyota; Double D/G of Shippers downgrade to Sell ; EARNINGS TODAY: All about Fanuc
DAILY NUGGET. Toyota - End of an Era, and the start of another. We expect new CEO Sato to accelerate the EV shift !


Good Morning Japan |Earnings Bonanaza! ; Tesla Rips; AutoSemis in Play;Toyoda @Toyota Passes Baton

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.

<ul>
<li>Nidec is headed into the red due to market disruption in China, restructuring charges and stagflation.</li>
<li>The first two of these factors should be temporary, but the third points to longer term pressure on margins. Competition in EV motors is another problem that won't go away.</li>
<li>In a weak economy characterized by stagflation, it is too early to turn bullish.</li>
</ul>


Nidec is headed into the red due to market disruption in China, restructuring charges and stagflation.
The first two of these factors should be temporary, but the third points to longer term pressure on margins. Competition in EV motors is another problem that won't go away.
In a weak economy characterized by stagflation, it is too early to turn bullish.


Nidec (6594): A V-Shaped Recovery Cannot Be Taken for Granted

<ul>
<li>OVERSEAS.  Stocks Mixed as SPX -0.1% as NYSE Glitches on Open;  MSFT Beats  but Chip Giant Texas Instruments weak; DoJ calls for Google Ad Break up</li>
<li>JAPAN.  NKY Futs -0.4% vs Cash; USDJPY steady at 130.19; Japan Freezes - No Joke; Nikkei Survey shows public sentiment toward Nuclear Power improving; Nidec misses; Elliot tgts DNP </li>
<li>DAILY NUGGET. Is Japan Stuck ? This is the view of outgoing BBC reporter. We disagree - changes are happening. </li>
</ul>


OVERSEAS.  Stocks Mixed as SPX -0.1% as NYSE Glitches on Open;  MSFT Beats  but Chip Giant Texas Instruments weak; DoJ calls for Google Ad Break up
JAPAN.  NKY Futs -0.4% vs Cash; USDJPY steady at 130.19; Japan Freezes - No Joke; Nikkei Survey shows public sentiment toward Nuclear Power improving; Nidec misses; Elliot tgts DNP 
DAILY NUGGET. Is Japan Stuck ? This is the view of outgoing BBC reporter. We disagree - changes are happening. 


Good Morning Japan |NYSE Glitches; Stocks Mixed; While JP Freezes the Public Warms to Nuclear Power

<ul>
<li>Nidec slashed its full year operating profit guidance by 48% to 110 billion yen</li>
<li>For Q3, Nidec reported an operating profit of 28 billion yen (-37% YoY), significantly below street expectations (51 billion)</li>
<li>We remain bullish, expecting cost cutting efforts to ignite a profit recovery next year</li>
</ul>


Nidec slashed its full year operating profit guidance by 48% to 110 billion yen
For Q3, Nidec reported an operating profit of 28 billion yen (-37% YoY), significantly below street expectations (51 billion)
We remain bullish, expecting cost cutting efforts to ignite a profit recovery next year


Japan

NIDEC CORPORATION is the world's leading manufacturer of small precision motors mainly used in HDD and optical disk drives. The company has extended its focus to the home appliance and automotive markets. NIDEC is active in M&A and its subsidiaries include the world's leading manufacturers of LCD panel handling robots and camera shutters.

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Nidec Corp (6594 JP)

Hon Hai 4Q22 Results Preview: Brace for a Weak Print, But EV Structural Driver Intact

We remain structurally bullish on Hon Hai and see it as positioned favorably relative to U.S. China semiconductor restrictions. Our TP for Hon Hai...

Vincent Fernando, CFA

Good Morning Japan |Earnings Bonanaza! ; Tesla Rips; AutoSemis in Play;Toyoda @Toyota Passes Baton

JAPAN. NKY Futs +0.5% vs Cash; Baton gets passed at Toyota; Double D/G of Shippers downgrade to Sell ; EARNINGS TODAY: All about Fanuc.

Mark Chadwick

Nidec (6594): A V-Shaped Recovery Cannot Be Taken for Granted

It is too early to turn bullish on Nidec. The company will probably return to profit after restructuring, but stagflation and competition in EV...

Scott Foster

Good Morning Japan |NYSE Glitches; Stocks Mixed; While JP Freezes the Public Warms to Nuclear Power

JAPAN. NKY Futs -0.4% vs Cash; USDJPY steady at 130.19; Japan Freezes - No Joke; Nikkei Survey shows public sentiment toward Nuclear Power...

Mark Chadwick

Nidec (6594) | Down but Not Out

Nidec remains a key beneficiary of multiple megatrends: digital transformation, robotics, energy efficiency and decarbonization. We remain bullish...

Mark Chadwick

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