Monolith Capital

$255A.T GLTechno had arguably the best quarter among my holdings, yet the stock fell 4% after the results came out last Friday and finished down 11%. The semiconductor business is firing on all cylinders: sales are accelerating, margins are expanding, and orders are booming. The order backlog is up 130% YoY and 51% QoQ, with a book-to-bill ratio at 1.7. Applied Materials $AMAT is placing massive orders for GLTechno’s quartz glass components to service installed equipment and build new tools. In turn, GLTechno plans to double its flame-processing capacity in Japan starting in January 2027. As a bonus, the analytical instruments business is also performing well, fueled by robust sales of water-testing consumables. At 12 P/E, I think GLTechno has the highest risk-adjusted upside across my AI-related positions and buy candidates. It deserves a higher portfolio weight.

Togami Electric ($6643.T) is off to a good start this year: sales increased 12% while operating profit jumped 40% in Q1. Rising demand for electrical distribution equipment and higher prices for key products are driving earnings growth, as Japan upgrades its power grid. The revised guidance is conservative – I think operating income will turn out 15-20% higher than expected. Management should raise dividends from today's sub-30% payout and accelerate buybacks, as cash continues to pile up and now equals ~28% of market cap. I believe Togami is significantly undervalued and see it doubling in the next 24 months. I will maintain my current position.

$6135.T Makino was pitched today at the Sohn Tokyo Investment Conference. With Japanese machine tool exports at record levels, the company has strong momentum while its valuation remains reasonable. New orders and backlog are the key variables to watch in the upcoming results.

$4368.T FUSO Chemical trades at a discount to CMP slurry formulators (Fujifilm, Entegris, Qnity Electronics, Anji Microelectronics), even though its competitive advantage is arguably stronger and more durable. FUSO has effectively monopolized the ultra-high-purity colloidal silica market and has become a critical supplier to leading-edge chip production lines globally. Strong performance figures sustained over multiple quarters, recent silica price hikes, and investor outreach should improve the company’s perception over time.

The bottom is likely in for Okamoto Machine Tool Works ($6125.T). Capital spending on 300mm wafer manufacturing has already turned a corner: Okamoto posted a 370% YoY jump in wafer polisher orders last quarter, as SUMCO, Shin-Etsu, and GlobalWafers reported tight 300mm wafer capacity and planned production line upgrades. The company’s grinders for packaging applications have also stirred up interest, thanks to Mitsui’s commercial push in Taiwan. I expect these two product families (wafer polishers and grinders) to power a strong earnings recovery starting this year. With demand stabilizing, the machine tool business should no longer depress margins after hitting its lowest profitability in 15 years. I believe Okamoto’s current valuation offers at least 50% upside. I bought a few thousand shares today.

$6492.T I sold Okano Valve today for a 60% gain in six months. Thanks to @scg_oz astute comments, I revisited my valuation assumptions and realized they were too aggressive. I went through Okano’s numbers before the Fukushima disaster, made a few adjustments, and updated my earnings estimates. As a result, I now think Okano is worth around ¥17,000 per share instead of ¥22,000, when I implicitly assumed 9-10 reactors would be online by 2031. I believe 6-7 reactors is a more reasonable forecast today. I also don’t expect international expansion and next-generation reactors to move the needle soon, given regulatory hurdles. More inspection and restart work could create additional upside, but I wouldn't bet on it. Altogether, I think Okano is close to fair value today. Thanks everyone for the critical feedback, keep it coming!

$6135.T In a March interview, Makino's sales executive said: “We’ve heard about Starlink-related components, so that might be a positive development for our company as well.” I checked, and he is right - SpaceX likely uses Makino's machines to make Starlink satellites. SpaceX manufactures Starlink satellites at the dedicated facility in Redmond, Washington. GPT 5.5 helped me unearth local county permit records, which show new foundations for relocated machinery and related fire-alarm alterations in early 2025 under the project name "SPACEX SE03 - MAKINO EXPANSION AND HITL". In addition, SpaceX is looking for experienced machinists for the Redmond facility to operate multi-axis CNC machines, including 5-axis mills and 6-axis lathes. This convinced me that Elon is also a fan of Makino's gigantic "mother machines".

One of the main reasons I invested in Santec $6777.T was its highly lucrative medical business – MOVU. I generally understood where the optics are going, but couldn’t imagine the speed and scale of transition. On the other hand, Santec’s success in the eye diagnostics market in partnership with Alcon $ALC was evident, but not everyone paid close attention. Two years ago, I thought investors failed to price in the upcoming launch of ARGONAUT – the new multi-modal eye imaging system that would supplement the ARGOS biometer. The irony is that the ARGONAUT is still awaiting FDA approval, while Santec’s share price took off without it. We might finally see the ARGONAUT later this year, though. On the recent earnings call, Alcon’s management indicated that Unity DX whole-eye analyzer (Alcon’s branded version of the ARGONAUT) is about to launch. Considering Santec's rich valuation, I don’t think this will move the share price much when it happens, but it could still be a nice surprise.

Sold Sphere ($347700.KQ) at a small profit to double down on HVM ($295310.KQ). HVM is rapidly expanding output of advanced metal alloys to support Starship production. Orders from SpaceX are rising faster than sales, boosting near-term visibility. Now all we need is daily Starship launches by August 2027, as Musk promised. Easy-peasy 👍

$4368.T FUSO Chemical reported strong Q1 numbers across the board: revenue up 22%, operating profit up 32%, and net income up 115% (incl. government subsidies). This time, both the semiconductor materials and life sciences businesses contributed to earnings growth. Higher sales volumes of ultra-high-purity colloidal silica, price revisions announced earlier this year, and weak JPY were the key drivers. The life science business (food acids) finally began to recover with operating profit up 47%. The unchanged guidance implies a surprisingly weak Q2, which I think is too conservative. To meet overwhelming compute demand, chip foundries worldwide are ramping up wafer output and consuming increasing volumes of CMP slurries as they bring more production lines online. If anything, I expect an acceleration in FUSO’s silica sales over the next few quarters. Add to that 5-10% price hikes + moderating depreciation charges from the recently launched silica reactors, and you get 25%+ annual OP growth in the next three years. I think the company's valuation today leaves about 30-40% upside.

I think Okano Valve Manufacturing (6492.JP) is an exceptional investment opportunity. It is the cleanest and cheapest way to invest in the nuclear renaissance I have found. I’m grateful to @JimJimmeny11 for the idea. Okano is a highly specialized manufacturer of high-temperature, high-pressure valves for nuclear and thermal power plants, with almost 50% of revenue from maintenance services. It holds a near-monopoly position in the Japanese market, protected by decades of operating experience and impassable qualification barriers. Okano is entering a multi-year earnings upcycle as Japanese utilities recommission reactors and replace aging valve infrastructure, driving revenue growth off a depressed base with significant operating leverage. I expect the recent disruptions to energy supply will break remaining political resistance to nuclear restarts and compress the launch timeline. Despite strong demand tailwinds, the firm’s valuation doesn’t price much growth. On my FY2026 numbers, P/E is 13, and EV/EBITDA is 8. Investors evidently do not consider international expansion or next-generation reactors as valuable options. Like Togami Electric Manufacturing (6643.JP), Okano’s risk/reward ratio is heavily skewed today, so I made a large investment last week under ¥10,000 without overthinking it.