Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

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

Pharma Foods International / Equity Bottom-Up

Pharma Foods International Co.,Ltd. produces and sells bioengineered foods for commercial use.  The Company researches and develops physiologically functional foods.

<ul>
<li>After dropping to a 52-week low on operating and net 1Q losses, the share price has recovered to 20x EPS guidance for FY July 2026. </li>
<li>The gross margin remains near 80%, but a large increase in advertising expenses put the company into the red. It also boosted sales as planned. </li>
<li>Management plans to cut back on advertising, aiming for break-even in 2Q and profits in 2H. The dividend yield is now 3.6%. The long-term investment story remains intact. </li>
</ul>


After dropping to a 52-week low on operating and net 1Q losses, the share price has recovered to 20x EPS guidance for FY July 2026. 
The gross margin remains near 80%, but a large increase in advertising expenses put the company into the red. It also boosted sales as planned. 
Management plans to cut back on advertising, aiming for break-even in 2Q and profits in 2H. The dividend yield is now 3.6%. The long-term investment story remains intact. 


Pharma Foods International (2929 JP): 1Q Loss from Up-Front Advertising Expenses

Hamamatsu Photonics Kk / Equity Bottom-Up

HAMAMATSU PHOTONICS K.K. manufactures electron tubes, semiconductors, and image processors.  The Company's products include photosensitive electronic tubes, optical/image sensors, X-ray related products, laser related products, photodiodes, light-emitting diodes (LED) and video camera used for measuring equipment.

<ul>
<li>Demand from the semiconductor, medical, quantum computing and defense industries is turning the Laser segment into Hamamatsu Photonics's new growth driver.</li>
<li>The acquisition of NKT Photonics brings defense and other technologies, Rheinmetall as a customer in Europe, and potential for greater defense-related sales in Japan. </li>
<li>Selling at 20x net profit guidance for FY Sep-28, near the bottom of its 10-year P/E range.</li>
</ul>


Demand from the semiconductor, medical, quantum computing and defense industries is turning the Laser segment into Hamamatsu Photonics's new growth driver.
The acquisition of NKT Photonics brings defense and other technologies, Rheinmetall as a customer in Europe, and potential for greater defense-related sales in Japan. 
Selling at 20x net profit guidance for FY Sep-28, near the bottom of its 10-year P/E range.


Hamamatsu Photonics (6965 JP): The Opportunity in Lasers

ROHM COMPANY LIMITED manufactures custom linear integrated circuits and semiconductor devices for use primarily in consumer electronics.  The Company has plants and sales offices worldwide.  Rohm's subsidiaries include Wako Electric and Apollo Electronics.

<ul>
<li>Sales are growing again and the company has turned profitable with capacity utilization up and costs down. Guidance for 2H of FY Mar-26 looks conservative. </li>
<li>Sales of power devices is rising after a long period of weakness, supported by auto, industrial and data center related demand.</li>
<li>Projected valuations are once again reasonable. The share price should continue to trend upwards.</li>
</ul>


Sales are growing again and the company has turned profitable with capacity utilization up and costs down. Guidance for 2H of FY Mar-26 looks conservative. 
Sales of power devices is rising after a long period of weakness, supported by auto, industrial and data center related demand.
Projected valuations are once again reasonable. The share price should continue to trend upwards.


Rohm (6963 JP): Renewed Growth, Conservative Guidance & Reasonable Valuation

IHI Corporation manufactures heavy machinery. The Company produces aircraft jet engines, rocket propulsion systems, and ships for military and commercial use. Ishikawajima-Harima also constructs petroleum refineries and nuclear power plants.

<ul>
<li>Sales and operating profit declined YoY in 1H, but new orders were up 17.5% and the book-to-bill ratio rose from 1.00 to 1.25. anagement has raised full-year guidance.</li>
<li>Aerospace &amp; Defense continue to lead growth, with nuclear energy and Asian EPC making significant contributions to new orders and the restructuring of Industrial Systems &amp; Machinery boosting operating profit.</li>
<li>Share price down 15% in two weeks to 23x FY Mar-26 EPS guidance. Once again a reasonably valued investment in Japan's rising defense budget and corporate restructuring.</li>
</ul>


Sales and operating profit declined YoY in 1H, but new orders were up 17.5% and the book-to-bill ratio rose from 1.00 to 1.25. anagement has raised full-year guidance.
Aerospace &amp; Defense continue to lead growth, with nuclear energy and Asian EPC making significant contributions to new orders and the restructuring of Industrial Systems &amp; Machinery boosting operating profit.
Share price down 15% in two weeks to 23x FY Mar-26 EPS guidance. Once again a reasonably valued investment in Japan's rising defense budget and corporate restructuring.


IHI (7013 JP): Orders and Profits Headed Up, Share Price Down

<ul>
<li>Announced last Friday, FY Sep-25 sales and net profit were in line with guidance, but operating profit fell short. On Monday, the shares dropped 4.5%, wiping out a month's gains.</li>
<li>Looking ahead, management expects three years of sales and profit growth as capex declines, depreciation and R&amp;D level off, and the NKT Photonics acquisition approaches breakeven.</li>
<li>In this scenario, semiconductor, bio-medical, defense and quantum computing applications should drive 3-year sales growth of 24% and a 71% increase in net profit, bringing the P/E down to 20X.</li>
</ul>


Announced last Friday, FY Sep-25 sales and net profit were in line with guidance, but operating profit fell short. On Monday, the shares dropped 4.5%, wiping out a month's gains.
Looking ahead, management expects three years of sales and profit growth as capex declines, depreciation and R&amp;D level off, and the NKT Photonics acquisition approaches breakeven.
In this scenario, semiconductor, bio-medical, defense and quantum computing applications should drive 3-year sales growth of 24% and a 71% increase in net profit, bringing the P/E down to 20X.


Hamamatsu Photonics (6965 JP): Capex Peaking, Profits to Rebound

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.

Scott Foster
Senior Technology Analyst, Japanese Equities
• LightStream Research

Pharma Foods International (2929 JP): 1Q Loss from Up-Front Advertising Expenses

Share price down on 1Q losses from temporary surge in advertising. Gross margin steady at 80%. Return to profitability expected in 2H. Long-term...

Scott Foster

Hamamatsu Photonics (6965 JP): The Opportunity in Lasers

Semiconductor, medical, quantum and defense-related demand are turning the Laser segment into a new growth driver. By the end of the decade, it...

Scott Foster

Rohm (6963 JP): Renewed Growth, Conservative Guidance & Reasonable Valuation

Rohm has pulled itself out of the red and appears to be low-balling 2H guidance. Power device sales for auto, industrial and data center use are...

Scott Foster

Hamamatsu Photonics (6965 JP): Capex Peaking, Profits to Rebound

High growth in capital spending is ending and depreciation should follow. Growth in R&D and SGA expenses is also scheduled to drop sharply, while...

Scott Foster

Pharma Foods International (2929 JP): 1Q Loss from Up-Front Advertising Expenses

Share price down on 1Q losses from temporary surge in advertising. Gross margin steady at 80%. Return to profitability expected in 2H. Long-term...

Scott Foster

Hamamatsu Photonics (6965 JP): The Opportunity in Lasers

Semiconductor, medical, quantum and defense-related demand are turning the Laser segment into a new growth driver. By the end of the decade, it...

Scott Foster

Rohm (6963 JP): Renewed Growth, Conservative Guidance & Reasonable Valuation

Rohm has pulled itself out of the red and appears to be low-balling 2H guidance. Power device sales for auto, industrial and data center use are...

Scott Foster

IHI (7013 JP): Orders and Profits Headed Up, Share Price Down

Down 15% in the recent market sell-off, IHI is again an attractive play on Japan's rising defense spending and the company's own restructuring....

Scott Foster

Hamamatsu Photonics (6965 JP): Capex Peaking, Profits to Rebound

High growth in capital spending is ending and depreciation should follow. Growth in R&D and SGA expenses is also scheduled to drop sharply, while...

Scott Foster