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

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

Japan Aviation Electronics / Equity Bottom-Up

Most of JAE's profits come from sales of connectors to makers of mobile devices and automotive electronics. Both of these markets began to recover in the three months to September (2Q of FY Mar-21) and should continue to improve in the coming year.There  were sharp rebounds in total sales and gross profit in 2Q and the company made an operating profit after only one quarter in the red.Management's guidance for 2H of FY Mar-21 looks conservative. If profits regain the levels recorded over the past three fiscal years, the P/E would drop to 10x - 12x.New smartphone models, 5G and advances in automotive electronics, factory automation and robotics should drive long-term growth. A resurgent virus and trade war appear to be the primary risks.

Most of JAE's profits come from sales of connectors to makers of mobile devices and automotive electronics. Both of these markets began to recover in the three months to September (2Q of FY Mar-21) and should continue to improve in the coming year.There  were sharp rebounds in total sales and gross profit in 2Q and the company made an operating profit after only one quarter in the red.Management's guidance for 2H of FY Mar-21 looks conservative. If profits regain the levels recorded over the past three fiscal years, the P/E would drop to 10x - 12x.New smartphone models, 5G and advances in automotive electronics, factory automation and robotics should drive long-term growth. A resurgent virus and trade war appear to be the primary risks.

Japan Aviation Electronics (6807 JP): Laggard Parts Maker Cheap in a Recovery Scenario