Japan/Asia Long-Short, LightStream Research

Mio Kato

Over 15 years analysing Japanese and Asian stocks from a long/short perspective

I focus on cyclically driven sectors such as Gaming, Factory Automation and Autos

An eclectic background as a long-short analyst, upper management at a financial data startup through its listing, and as the founder of a team analysing big/alternative data, all of which supports independent and differentiated views... we hope

An appreciation for Mathematics drives the development of a "Micro-Quantamental" process which can provide a data-driven, historically-informed and semi-automated foundation upon which to layer more qualitative and judgemental analysis, thus improving investment decision-making speed and accuracy

Japan/Asia Long-Short

Denso: Centrepiece of Toyota's ADAS/AD/EV Mantel Is a Conviction Buy

Aisin Seiki: A Touch Cheap but Waiting on New Growth Drivers

We Would Play Japan Breakout Through Toyota on Domestic Restructuring and GM/Ford Production Cuts

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

<a href="https://www.smartkarma.com/entities/20125" target="_blank" data-smartkarma-citation="entities:20125:1">Toyoda Gosei Co Ltd (7282 JP)</a> (TG) which has 64 group companies in 18 countries, specialises in plastic and rubber automotive parts but is also active in the field of LEDs, including the development of blue LEDs. The company was established as a spin-off of Toyota's rubber research division in 1949 and now operates in two main business segments: Automotive Parts (98% of revenue) and Optoelectronics (2%). The Automotive Parts segment includes automobile Interior and Exterior parts (37%), Weatherstrips (18%), Functionality parts (16%), and Safety Systems (29%). The Optoelectronics segment includes LED chips, lamps, and other LED related products.Toyoda experienced a decline in its financial performance in the recent financial year (FY03/17) with sales declining by 3.4% YoY and OP by 5.0% YoY. This was mainly due to the deteriorating performance of the Optoelectronic business and partly due to the appreciation of the yen. Despite this downtrend in revenue in the last financial year, the company has decided to focus on its automotive parts segment- especially on the safety systems and functional components segments in which the company sees high growth potential, while also working on improving the Optoelectronic business segment. This news, together with company’s growth strategies for the next few years has helped the stock prices recover and trade at a relatively stable level in the last few months.Our forecasts indicate that the stock seems fairly valued trading at a FY1 PE of 13.3x, marginally higher than its peers. However, in the longer run as TG’s growth strategies materialise and revenue accelerates the PE is likely to come back line with its peers.

Toyoda Gosei Co Ltd (7282 JP) (TG) which has 64 group companies in 18 countries, specialises in plastic and rubber automotive parts but is also active in the field of LEDs, including the development of blue LEDs. The company was established as a spin-off of Toyota's rubber research division in 1949 and now operates in two main business segments: Automotive Parts (98% of revenue) and Optoelectronics (2%). The Automotive Parts segment includes automobile Interior and Exterior parts (37%), Weatherstrips (18%), Functionality parts (16%), and Safety Systems (29%). The Optoelectronics segment includes LED chips, lamps, and other LED related products.Toyoda experienced a decline in its financial performance in the recent financial year (FY03/17) with sales declining by 3.4% YoY and OP by 5.0% YoY. This was mainly due to the deteriorating performance of the Optoelectronic business and partly due to the appreciation of the yen. Despite this downtrend in revenue in the last financial year, the company has decided to focus on its automotive parts segment- especially on the safety systems and functional components segments in which the company sees high growth potential, while also working on improving the Optoelectronic business segment. This news, together with company’s growth strategies for the next few years has helped the stock prices recover and trade at a relatively stable level in the last few months.Our forecasts indicate that the stock seems fairly valued trading at a FY1 PE of 13.3x, marginally higher than its peers. However, in the longer run as TG’s growth strategies materialise and revenue accelerates the PE is likely to come back line with its peers.

Toyoda Gosei: Daicel Airbag JV, ADAS Compatible Grilles and Plastic Fuel Filler Pipe Are the Future