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

2020 High Conviction: ROHM- Potential for Margin Expansion; 5G and CASE Are Key Demand Drivers

Rohm (6963): Big Upward Revision, Significant Upside Potential Remains

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

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

Rohm has dropped by 15% in the recent market sell-off, while FY Mar-21 profits were far above guidance and FY Mar-22 guidance calls for a further 27% increase in operating profit.Unless you believe that economic recovery from COVID-19 will not continue or, in Rohm's case, that the auto industry will not recover from the current semiconductor shortage, this looks like a buying opportunity.Up-front investment in power devices for electric vehicles should pay off as demand rises and economies of scale are realized. This should support record sales and additional margin expansion  in FY Mar-23.There is now 35% potential upside to our ¥13,500 share price target.

Rohm has dropped by 15% in the recent market sell-off, while FY Mar-21 profits were far above guidance and FY Mar-22 guidance calls for a further 27% increase in operating profit.Unless you believe that economic recovery from COVID-19 will not continue or, in Rohm's case, that the auto industry will not recover from the current semiconductor shortage, this looks like a buying opportunity.Up-front investment in power devices for electric vehicles should pay off as demand rises and economies of scale are realized. This should support record sales and additional margin expansion  in FY Mar-23.There is now 35% potential upside to our ¥13,500 share price target.

ROHM Co Ltd

Rohm (6963 JP): Buy on Current Weakness