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

MonotaRO (3064 JP): Sell into Current Rally

Gravity Works As WeWork Doesn't; Now Plan B

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

In February, we wrote Sell into the Current Rally. Now, with shares down 25% from their peak, we see a buying opportunity.1Q growth rates were above the company's targets for FY Dec-21, with sales up 24.6%, operating profit up 33.4% and net profit up 33.9% year-on-year. Full year guidance is for a 25.9% increase in operating profit.MonotaR0's fourth distribution center, the Ibaraki Chuo Satellite Center, started operations in March. This should support 20%+ sales and profit growth at least through Dec-23, in our estimation, with efficiency gains outweighing increases in depreciation and personnel expenses.

In February, we wrote Sell into the Current Rally. Now, with shares down 25% from their peak, we see a buying opportunity.1Q growth rates were above the company's targets for FY Dec-21, with sales up 24.6%, operating profit up 33.4% and net profit up 33.9% year-on-year. Full year guidance is for a 25.9% increase in operating profit.MonotaR0's fourth distribution center, the Ibaraki Chuo Satellite Center, started operations in March. This should support 20%+ sales and profit growth at least through Dec-23, in our estimation, with efficiency gains outweighing increases in depreciation and personnel expenses.

MonotaRO (3064 JP): Buy into Current Weakness

MonotaRO Co Ltd

MonotaRO (3064 JP): Buy into Current Weakness