{
  "docId": "019dd923-622c-750b-8b9a-0f4bec37392f",
  "docSlug": "f982379e2e48",
  "documentTitle": "Lasertec Corporation (6920)",
  "authorId": "58_Scorpion_Capital",
  "authorName": "Scorpion Capital",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2024-06-05 00:00:00",
  "orientation": "landscape",
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  "pageNumber": 74,
  "pageCount": 334,
  "prevPage": 73,
  "nextPage": 75,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 120,
  "notes": "The slide highlights a discrepancy between reported net income and actual cash generation, questioning the viability of future dividend payouts.",
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  "slideHref": "/slides/019dd923-622c-750b-8b9a-0f4bec37392f/74",
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      "kind": "callout",
      "text": "As the discrepancy between accounting income and cash flow widens, funding the dividend becomes tricky – consensus earnings estimates for 2025/2026 imply a dividend that is unrealistic vs. cash or cash flow.",
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    {
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      "kind": "metric",
      "text": "free cash flow: $192MM",
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      "subkind": "primary",
      "toolName": "Quantification",
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      "componentId": "019dd953-78b6-764f-bc7c-57f5db40b24a",
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      "kind": "paragraph",
      "text": "It’s extraordinary that Lasertec has a $23B market cap yet only $197MM of cash on its balance sheet – flat over the 5 years since the launch of its ACTIS EUV product, despite 40% margins. Over the same period, peers like ASML, Applied Materials, Lam, and KLA have seen their cash reserves surge – despite lower margins compared to Lasertec – even after repurchasing billions in stock and funding growth and inventory. Shockingly, Lasertec generates so little cash that it can’t seem to fund its dividend without debt – putting it at risk. In the Sep 2023 quarter, it had to borrow $67MM (¥10B) to fund a semiannual dividend of $77MM (¥7.8B) – highly unusual. Its dividend payout has averaged ~25% of net income. Earnings grew to $443MM in the last 12 months, implying a $111MM dividend, while free cash flow was only $192MM. The dividend alone is thus ~60% of free cash flow (and of cash balance). As the discrepancy between accounting income and cash flow widens, funding the dividend becomes tricky – consensus earnings estimates for 2025/2026 imply a dividend that is unrealistic vs. cash or cash flow.",
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      "kind": "source-note",
      "text": "Source: Scorpion Capital analysis and estimates; Capital IQ data",
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      "kind": "table",
      "text": "Financial tables for JPY and USD showing Operating cash flow, CapEx, Free cash flow, Net income, Dividends, and Cash balance from 2019 to 2026E.",
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      "kind": "title",
      "text": "Dividend vs. free cash flow and cash balance – JPY and USD millions",
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      "evidence": "Exposing the discrepancy between accounting income and cash flow to suggest financial instability.",
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      "arcName": "Overcoming the Monster",
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      "evidence": "The deck presents numerous slides exposing alleged contradictions and flaws in Lasertec's products and financials.",
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      "name": "Cost Of Inaction",
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      "bestFor": "Urgent budget requests, compliance, risk mitigation",
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      "evidence": "The deck presents a series of slides highlighting the potential risks and consequences of not acting on Lasertec's alleged fraud.",
      "position": 1,
      "objective": "To highlight the risks of not acting on Lasertec's alleged fraud",
      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
      "confidence": 0.7,
      "description": "Quantify what happens if the audience does nothing"
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