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>The share price has risen by more than 20% in the past month as 1H results beat guidance, FY guidance was raised and the yen weakened.</li>
<li>The 2-for-1 stock split may also have attracted retail investors. But the new FY guidance implies lower 2H guidance. </li>
<li>The outlook is for higher but volatile sales and profits. Valuations are reasonable but not compelling. Wait for a pullback.</li>
</ul>


The share price has risen by more than 20% in the past month as 1H results beat guidance, FY guidance was raised and the yen weakened.
The 2-for-1 stock split may also have attracted retail investors. But the new FY guidance implies lower 2H guidance. 
The outlook is for higher but volatile sales and profits. Valuations are reasonable but not compelling. Wait for a pullback.


Screen Holdings (7735 JP): FY Guidance Up, 2H Guidance Down

Ortus Advisors

Andrew Jackson

Independent Insight Provider

Thematic (Sector/Industry)

<ul>
<li>US profit-taking in tech/growth will set a muted tone to start as the market holds its breath for comments from BoJ Gov. Ueda who addresses parliament this morning.</li>
<li>China chip imports at record highs may add to pressure for the US to broaden its export restrictions for specific technologies as well as  for legacy node equipment.</li>
<li>Koizumi leading the polls will be positive for renewable energy names which remain highly oversold after the multi-year weakness in Japanese small caps.</li>
</ul>


US profit-taking in tech/growth will set a muted tone to start as the market holds its breath for comments from BoJ Gov. Ueda who addresses parliament this morning.
China chip imports at record highs may add to pressure for the US to broaden its export restrictions for specific technologies as well as  for legacy node equipment.
Koizumi leading the polls will be positive for renewable energy names which remain highly oversold after the multi-year weakness in Japanese small caps.


Japan Morning Connection: BoJ Anticipation and Koizumi Taking an Early Lead in the Polls

<ul>
<li>Upbeat results briefing from <a href="https://www.smartkarma.com/entities/asahi-intecc-co-ltd" target="_blank" rel="noopener">Asahi Intecc</a> on Friday continues to make this look oversold with GPM bottoming, its MTP 1-year ahead of plan and strong growth outlooks for key markets China and US.</li>
<li>With numbers out for <a href="https://www.smartkarma.com/compose/insight/155896/Pan%20Pacific%20International%20Holdings%20(7532%20JP)" target="_blank" rel="noopener">PPIH</a> on Friday and the outlook reassuringly steady, this may start to get more attention as NKY225 inclusion candidate given it comes from the under-represented consumer goods segment.</li>
<li>AMAT numbers showing a decline in China revenues a red flag for Japanese SPE names overly reliant on China sales?</li>
</ul>


Upbeat results briefing from Asahi Intecc on Friday continues to make this look oversold with GPM bottoming, its MTP 1-year ahead of plan and strong growth outlooks for key markets China and US.
With numbers out for PPIH on Friday and the outlook reassuringly steady, this may start to get more attention as NKY225 inclusion candidate given it comes from the under-represented consumer goods segment.
AMAT numbers showing a decline in China revenues a red flag for Japanese SPE names overly reliant on China sales?


Japan Morning Connection: Asahi Intecc, PPIH

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Japan's markets have again failed to break to new highs creating a potential for a double-top pattern.</li>
<li>Trump's policies which target lower interest rates and a weaker dollar will put pressure on Japan's markets as can be seen from the high correlation between the JPY and TPX.</li>
<li>Sectors such as trading companies, autos and semiconductors could see the most pressure under a Trump presidency.</li>
</ul>


Japan's markets have again failed to break to new highs creating a potential for a double-top pattern.
Trump's policies which target lower interest rates and a weaker dollar will put pressure on Japan's markets as can be seen from the high correlation between the JPY and TPX.
Sectors such as trading companies, autos and semiconductors could see the most pressure under a Trump presidency.


Trump Trades and the JAPAN Market Are Like Oil and Vinegar

<ul>
<li>Irate U.S. politicians have gunned down their own tech sector, triggering declines of 7% to 20% among leading semiconductor equipment stocks outside China. </li>
<li>We expect a bounce after such large declines - and further gains for Naura and AMEC in China. </li>
<li>Investors now face difficult questions about the future of Chinese demand, the sustainability of the AI boom, and valuations. We are not optimistic.</li>
</ul>


Irate U.S. politicians have gunned down their own tech sector, triggering declines of 7% to 20% among leading semiconductor equipment stocks outside China. 
We expect a bounce after such large declines - and further gains for Naura and AMEC in China. 
Investors now face difficult questions about the future of Chinese demand, the sustainability of the AI boom, and valuations. We are not optimistic.


Semiconductor Equipment Stocks: A Bounce Before the Reckoning

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.

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SCREEN Holdings (7735 JP)