The analyst expresses a bullish view on TOWA/TOWCF as a sleeper beneficiary of the HBM4 memory cycle driven by increased capex from memory makers including SK Hynix, Samsung, and Micron (MU).
TOWA has a monopoly in compression modeling processes and should benefit from increased spending on HBM4 memory production lines, leading to a material re-rating despite being hyper cyclical. The analyst notes this cycle may differ due to recent memory company capital raises.
Yeah... the more I look into things, $TOWA / $TOWCF (6315) at ~$1.34b looks like a sleeper beneficiary for HBM4 spend from SK Hynix, Samsung, $MU. It’s hyper cyclical with spending cycles. But we’re seeing hikes in capex spend across the board from memory makers. Not exactly a 4x type play... But my guess is that it should get materially re-rated from a spike in unavoidable inflows for the start of the new HBM4 memory cycle anyway. And they appear to be a largely forgotten beneficiary for this new cycle despite their monopoly in compression modeling processes. Hybrid bonding just removes one step in the process but requires Towa anyway (monopolies tend to get higher premiums) I also don't think this cycle is like the last due to how much memory companies have been printing recently? Just my thoughts, but if my guess is right... it should show up in earnings on the Monday 11th (Tokyo Time) as everyone’s building out HBM4 lines?
| Horizon | Raw move | vs SPY |
|---|---|---|
| 1 day | +4.8% | +4.6% |
| 1 week | +25.0% | +23.2% |
| 1 month | +100.2% | +94.7% |
| 3 months | +42.9% | +41.4% |
| 6 months | — | — |