Global Automotive Stocks/EV Focus/Event Driven, SC Capital

SC Capital

SC Capital has over 20 years' experience covering the global automotive industry both on the Sell Side (UBS & Morgan Stanley) and Buy Side (Och-Ziff), along with a wealth of industry contacts. 

Current focus is on electric vehicle stocks & their supply chains. Aim is to identify the winners and losers from a long/short perspective. This includes close coverage of legacy automakers as well.  

From time to time. we cover opportunistic events with stocks in the manufacturing sector, food & beverage, healthcare and tech, where we also have coverage experience.

Global Automotive Stocks/EV Focus/Event Driven

Over 22 years covering Japanese equities on both the sell side and the buy side. 

Bottom-up Japan Equities Research

Equity Bottom-Up

<ul><li>Tamron (7740) is a small-cap camera lens manufacturer (valued at around $495m) that supplies lenses for such prestigious digital camera makers as Nikon and Sony, as well as having its own high-end brand of interchangeable lenses.</li><li>Tamron's market value has fallen by 30% from its FY15 peak and profits by nearly 75% from their FY07 peak due to falling digital camera sales as consumers increasingly switched to using their smart phones to take pictures.</li><li>As a result, all of the top investment banks (Goldman Sachs, JP Morgan, UBS, Barcap, etc.) have dropped coverage of Tamron, which led us to take a look at the company twice over the last two quarters.</li><li>As it turns out, Tamron has been receiving large orders for its lens technology from two industries that should show immense growth henceforth: high-precision lenses for (1) drones and (2) ADAS systems for automobiles.</li><li>The stock also has high sales in Europe and profit sensitivity to the euro (USD impact is neutral), which will boost earnings both this year and next if the euro remains strong versus the yen.</li><li>We get the stock trading at an FY17 PER and EV/EBITDA of 16.8x and 5.0. For FY18, we get 13.9x and 4.5, respectively. The 5-year PER range has been 12x to 39x, while the range for EV/EBITDA is 3.6x to 8.2x (see table-1).</li></ul>

Tamron (7740) is a small-cap camera lens manufacturer (valued at around $495m) that supplies lenses for such prestigious digital camera makers as Nikon and Sony, as well as having its own high-end brand of interchangeable lenses.Tamron's market value has fallen by 30% from its FY15 peak and profits by nearly 75% from their FY07 peak due to falling digital camera sales as consumers increasingly switched to using their smart phones to take pictures.As a result, all of the top investment banks (Goldman Sachs, JP Morgan, UBS, Barcap, etc.) have dropped coverage of Tamron, which led us to take a look at the company twice over the last two quarters.As it turns out, Tamron has been receiving large orders for its lens technology from two industries that should show immense growth henceforth: high-precision lenses for (1) drones and (2) ADAS systems for automobiles.The stock also has high sales in Europe and profit sensitivity to the euro (USD impact is neutral), which will boost earnings both this year and next if the euro remains strong versus the yen.We get the stock trading at an FY17 PER and EV/EBITDA of 16.8x and 5.0. For FY18, we get 13.9x and 4.5, respectively. The 5-year PER range has been 12x to 39x, while the range for EV/EBITDA is 3.6x to 8.2x (see table-1).

Tamron--A New Play on Drone and ADAS Growth

Tamron Co Ltd

Tamron--A New Play on Drone and ADAS Growth