Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Securities analyst covering electronics, precision equipment & robotics, engineering, construction, transport and other sectors for more than 25 years in Japan and 3 years in Korea. Permanent resident of Japan.

Senior Technology Analyst, Japanese Equities

Advantest (6857 JP): 20% Potential Downside

Advantest (6857 JP): High Gearing on the Downside

Advantest – That Time in the Cycle When Orders Apparently Stop Being Important

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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 recent surge in IC test equipment orders is unsustainable. Only service orders maintain a positive trend.</li>
<li>After peaking this fiscal year, sales and profits are likely to show double-digit declines. When earnings might hit bottom is not clear, but cyclical gearing is high. </li>
<li>Earnings could rebound in 2 or 3 years, but visibility is poor. Don't forget that Advantest has dropped into the red three times in the past 20 years. </li>
</ul>


The recent surge in IC test equipment orders is unsustainable. Only service orders maintain a positive trend.
After peaking this fiscal year, sales and profits are likely to show double-digit declines. When earnings might hit bottom is not clear, but cyclical gearing is high. 
Earnings could rebound in 2 or 3 years, but visibility is poor. Don't forget that Advantest has dropped into the red three times in the past 20 years. 


Advantest (6857 JP): Orders Unsustainable, Cyclical Risk High

Advantest Corp

Advantest (6857 JP): Orders Unsustainable, Cyclical Risk High