The Must Read PSA Weekly Research Round-up (week to 12 Apr)

REPORTS: Fuel Cell Vehicles – Why Bother? INDUSTRY INSIGHTS: EU, UK initiate anti-competition gaming investigations / Dismal camera stats / Global box office receipts struggle / Japan to have new banknotes / Chemical safety crackdown in China / COMPANY INSIGHTS: A significant win for Nintendo as it gets Xbox Live for the Switch / Loeb & Sony – why this time might be different / What next for Panasonic and Tesla? / Should SBI Holdings buy Suruga Bank? / Toray’s new investment in China / Mercari has risen too far, too fast / istyle’s @cosme official store on Alibaba’s Tmall.com / MACRO/MARKET: Analysts more confident about Japan earnings / China exports up but imports down in March / REVIEWS/RESULTS: Nidec’s FY18 Q4 preview / Yaskawa’s FY18 OP a bit low on weak A/C servos but FY19 guidance as expected / Bellsystem24 sees FY18 fall short, guidance in line with consensus for FY19 / Pasona’s Q3 predictably weak

The Weekly Comment by Pelham Smithers

Taking the Cycle Out of Nintendo

For years, video gamers had a useful and free insight into the state of the Japanese gaming market thanks to the weekly publication by Media Create of the Japanese video game and console charts. Over the past couple of years, the site has also become popular with the investment community, as it gave a strong indication of how well Nintendo’s (7974 JT) Switch was (or wasn’t) doing. Sadly, but understandably, Media Create has decided to cash in on its report and it is now available only to subscribers, as is the other, similar series from Famitsu. However, the data for March is all we need for Nintendo’s 4Q FY18 numbers, and it should be pointed out that the Switch has consistently been selling 50,000/wk or more in Japan. This suggests that it is on target to sell 2.5mil units in the quarter, worldwide, which in turn means that it should sell 17mil consoles in FY18. That’s short of the 20mil units it had been gunning for, but it fell behind that target last summer, so a miss is neither surprising nor particularly meaningful, given the higher-than-forecast tie ratio.

Reports / Flash Notes Published This Week: Headlines at a Glance

1. Fuel Cell Vehicles – Why Bother?
2. Trend Micro (4704 JT): Challenging Years Ahead

Company / Sector / Thematic Comments at a Glance

Technology: Consumer Electronics / Gaming

1. Nintendo (7974 JT) Gets Xbox Live for the Switch
2. Loeb & Sony (6758 JT): Why This Time May be Different
3. What Next for Panasonic (6752 JT) & Tesla (TSLA US)?
4. Camera Market in Freefall – Again
5. Box Office Receipts Continue to Struggle Globally
6. EU, UK Initiate Anti-Competition Investigations into Gaming

Technology: Industrial Electronics / SPE / Components / Precision

7. Toshiba’s (6502 JT) LNG Deal Falls Through
8. Nidec (6594 JT) 4Q FY18 Preview
9. Japan to Have New Banknotes by 20248

Chemicals / Materials

10. Toray’s (3402 JT) New Investment in China
11. Asahi Kasei’s (3407 JT) Housing Orders Surge +36% YoY
12. Daiwa House (1925 JT) Shares Hit by Nonconformity Disclosures
13. Nissha (7915 JT) Joins JOLED Shareholders
14. Proposed Chemical Safety Crackdown in China

Pharmaceuticals

15. Sumitomo Dainippon Pharma’s (4506 JT) New Mid-Term Plan

Auto Parts / Machinery

16. Takeuchi (6432 JT) Sees Top-Line Growth in FY19
17. Nabtesco (6268 JT) Steadies Despite Boeing Issue
18. Yaskawa (6506 JT) FY18 OP Reflects Weak A/C Servos but FY19 Outlook as Expected

Internet / eCommerce

19. istyle (3660 JT) Opens @cosme Official Store on Tmall.com
20. Mercari (4385 JT) Rising too Far, too Fast

Enterprise Software

21. Investors Shrug Off Bellsystem24’s (6183 JT) Lacklustre Earnings
22. Pasona (2168 JT) Reports Q3, Sustaining Predictably Weak OPM

Miscellaneous

23. Should SBI Holdings (8473 JT) Buy Suruga Bank (8358 JT)? (Probably Not, But…)

Macro / Market

24. Analysts More Confident on Japan Earnings
25. Strong China Exports but Imports Weak

PSA Company Visits, Tours and Interviews

• Contacted / Interviewed: Asahi Kasei (3407 JT), M3 (2413 JT), Nomura Research Institute (4307 JT)
• Attended Information meeting: Sumitomo Dainippon Pharma (4506 JT), Japan Display (6740 JT)
• Telephone conference: Yaskawa (6506 JT)

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