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

<ul>
<li>FY Mar-22 sales and profits were well ahead of guidance. Management is forecasting further growth this year, but mostly in 1H.</li>
<li>Margins are under pressure from rising production costs and depreciation, but cash flow and the balance sheet are strong.</li>
<li>Gearing to vehicle electrification and should provide protection on the downside and support long-term growth. </li>
</ul>


FY Mar-22 sales and profits were well ahead of guidance. Management is forecasting further growth this year, but mostly in 1H.
Margins are under pressure from rising production costs and depreciation, but cash flow and the balance sheet are strong.
Gearing to vehicle electrification and should provide protection on the downside and support long-term growth. 


Rohm (6963 JP): Short-Term Caution, Long-Term Buy

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Thematic (Sector/Industry)

<ul>
<li>A strong earthquake hit Japan 100km south of the 2011 Fukishima earthquake</li>
<li>Yesterday's earthquake was about one fortieth the power of the 2011 quake</li>
<li>Four or five fabs might be impacted.  Results were not yet been reported as this Insight was being written, 15 hours after the event</li>
</ul>


A strong earthquake hit Japan 100km south of the 2011 Fukishima earthquake
Yesterday's earthquake was about one fortieth the power of the 2011 quake
Four or five fabs might be impacted.  Results were not yet been reported as this Insight was being written, 15 hours after the event


Will Japan's Earthquake Worsen Semiconductor Shortage?

<ul>
<li>Geared to rising demand for semiconductor and other industrial polishing services in general and rapid growth in the production of advanced power semiconductors in particular.</li>
<li>Sales and operating profit could double over the next 5 years, but dilution from capital raising might hold EPS growth to 50%.</li>
<li>Selling at 9.2x EPS guidance for FY Mar-22. 10x potential EPS implies 65% upside. Risks include small market cap and potentially volatile quarterly earnings.</li>
</ul>


Geared to rising demand for semiconductor and other industrial polishing services in general and rapid growth in the production of advanced power semiconductors in particular.
Sales and operating profit could double over the next 5 years, but dilution from capital raising might hold EPS growth to 50%.
Selling at 9.2x EPS guidance for FY Mar-22. 10x potential EPS implies 65% upside. Risks include small market cap and potentially volatile quarterly earnings.


Mipox (5381 JP): Participation in Power Semiconductor Consortium a Growth Driver

<ul>
<li>Based on following the company for 25 years, I agree with Mio Kato: I do not think Rohm would or should acquire Toshiba's power semiconductor operations.</li>
<li>It would violate Rohm's commitment to a sound financial structure and saddle it with an integration problem that might never be solved.</li>
<li>Far better to keep working with the NEDO power device consortium while continuing to expand and improve its own power device business.</li>
</ul>


Based on following the company for 25 years, I agree with Mio Kato: I do not think Rohm would or should acquire Toshiba's power semiconductor operations.
It would violate Rohm's commitment to a sound financial structure and saddle it with an integration problem that might never be solved.
Far better to keep working with the NEDO power device consortium while continuing to expand and improve its own power device business.


Rohm (6963 JP): Probably Won't Buy Toshiba's Electronic Devices Business

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Event-Driven

<ul>
<li>We have made no secret of the fact that we consider Toshiba’s restructuring plans to be unspectacular. </li>
<li>Initially we saw no reason to separate the infrastructure business and saleable assets but with  that issue addressed it is the position of the devices business which concerns us. </li>
<li>This is because we feel it is rather undersized to stand on its own two feet… but we increasingly feel that Renesas could be the ideal home for the unit.</li>
</ul>


We have made no secret of the fact that we consider Toshiba’s restructuring plans to be unspectacular. 
Initially we saw no reason to separate the infrastructure business and saleable assets but with  that issue addressed it is the position of the devices business which concerns us. 
This is because we feel it is rather undersized to stand on its own two feet… but we increasingly feel that Renesas could be the ideal home for the unit.


Toshiba – Why Renesas Might Be a Better Option for the Devices Business than an IPO

Japan

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.

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ROHM Co Ltd (6963 JP)

Rohm (6963 JP): Short-Term Caution, Long-Term Buy

Guiding for further growth in 1H of FY Mar-23, but visibility falls off after that. EV and SiC gearing are long-term positives. Strong cash flow...

Scott Foster

Will Japan's Earthquake Worsen Semiconductor Shortage?

Will last night's Japan earthquake worsen the current tightness in the chip market? A few companies are near the epicenter, but the quake's...

Jim Handy

Mipox (5381 JP): Participation in Power Semiconductor Consortium a Growth Driver

Participation in NEDO power semiconductor consortium could support 2X sales and 50% EPS growth. Potentially volatile small cap, but selling at 9x...

Scott Foster

Rohm (6963 JP): Probably Won't Buy Toshiba's Electronic Devices Business

Rohm will probably not acquire Toshiba's power device business. Instead, it will keep working with NEDO to expand its own capabilities. Down 24%...

Scott Foster

Toshiba – Why Renesas Might Be a Better Option for the Devices Business than an IPO

We believe a listing of Toshiba's device business would not create an especially attractive security for investors and that a sale to a domestic...

Mio Kato

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