The Must Read PSA Weekly Research Round-up (week to 07 August)
Reports / Flash Notes Summaries
1. Murata (6981 JT) FY26 Q1 Ahead of Consensus, Raising FY26~28 Forecasts
Murata produced FY26 Q1 results that beat consensus and the firm revised up for the full year. FY26 Q1 orders were sensational, and if sustained – let alone improved on – point the way to strong results in FY27 and FY28. However, the problem is that even after the recent selloff, the shares aren’t given away; a lot will depend on whether they are now priced as a US-type stock or a standard Japanese one. Pelham Smithers discusses.
2. Anritsu (6754 JT) FY26 Q1 Ahead of Consensus, Raising FY26~28 Forecasts
While the headline figures for Anritsu’s FY26 Q1 are impressive, what is particularly striking are its orders, and not just for Test & Measurement. The question is whether these orders are a one-off. Based on where we are in mobile, wireless and AI server technology, analyst Pelham Smithers sees the case for Anritsu’s business booming to be strong. Importantly, valuations aren’t stretched, in part because Anritsu is still seen as a mobile technology R&D play and not what it is increasingly, an AI capex play.
3. Capcom (9697 JT) FY26 Q1 Ahead of Consensus, Raising FY26~28 Forecasts
On the back of an excellent Q1 performance, analyst Pelham Smithers revises up his earnings model for Capcom. While valuations are not a giveaway, Capcom is one of several Japanese strong moat-, high-margin stocks that should (and in Capcom’s case does) trade on US market valuations [i.e. EV/OP of 24x] rather than traditional Japanese valuations [i.e. Ev/OP 16x]. Moreover, he flags a call option value.
Industry Insights
NAND, DRAM contract prices rise in July
Macro / Market / Misc.
Wages +3.4% YoY in June
Company News / Insights
Splatoon Raiders sells 474,684 copies at launch in Japan
Sony shares’ response [or lack of it] to Spider-man success is telling
Company Previews / Results
Bandai Namco FY26 Q1 OP +33% YoY on new IP axis strategy
Nintendo FY26 Q1 OP +151% YoY, on tariff rebates, game sales
Sega Sammy FY26 returns to Q1 Profit with OP ¥2.38bil
DeNA: FY26 Q1 OP -46.3% YoY
CyberAgent’s upwardly revised OP below consensus estimate
Company Previews & Results
Rohm FY26 Q1 OP beats consensus
Taiyo Yuden FY26 Q2 +28% YoY, raises guidance by 50%
Ricoh FY26 Q1 OP +277% YoY
Tokyo Seimitsu FY26 Q1 OP +29% YoY, raises full-year guidance
Tosoh: FY26 Q1 OP +94% YoY
Ibiden FY26 Q1 OP +52.4% YoY, full-year guidance raised
Sumitomo Bakelite FY26 Q1 OP 55% above consensus
TOTO FY26 Q1 OP -16% YoY, below consensus
Fujimi FY26 Q1 OP +42% YoY
Nitto Boseki FY26 Q1 OP +84.8% YoY; full-year guidance revised up
Fuso Chem: FY26 Q1 OP +32% YoY
MHI strong FY26 Q1 led by GTCC
Daikin A/C margins fall
Nabtesco robot gear uptrend
IHI releases mixed FY26 Q1
Furukawa Elec’s FY26 Q1 overshoots to little response; Fujikura’s FY26 Q1 stuns and the shares soar
Daifuku sees more strong chip demand
Isuzu FY26 Q1 vehicle sales drop but OP rise on forex gains
Toyota raises FY26 guidance on FX, lower Middle East impact
MMC misses FY26 Q1 estimates
Nissan FY26 Q1 beats consensus leaves guidance unchanged
Mazda beats FY26 Q1 estimates, guidance unchanged
Subaru FY26 Q1 OP -44.3% YoY, below consensus
Suzuki lowers FY26 OP guidance on inclusion of Middle East impact
Honda beats FY26 Q1 estimates; raises FY26 guidance on currency
Bridgestone’s FY26 Q2 beat estimates
LY Corp: FY26 off to a good start
Mercari: FY26 beats; FY27 earnings guidance misses
SBI Hdgs FY26 Q1 PTP +91.3% YoY
IIJ: FY26 Q1 preview
JMDC off to a good start
Eisai FY26 Q1 OP +19% YoY
The Weekly Comment by Pelham Smithers
Using “disappointing guidance” as an excuse, memory chip stocks have been sold off, but what were low valuations already, are now even lower.
While low valuations are usual for memory chip stocks at the top of the cycle, Pelham Smithers muses what the cycle might looks like if it is elongated?
Company / Sector / Thematic Comments at a Glance
Technology: Consumer Electronics, Gaming
1. Nintendo’s Splatoon Raiders: 474,684 Copies Sold at Launch in Japan
2. Sony’s Stock Price Response [Or Lack of it] to Spider-Man Success is Telling
3. Bandai Namco FY26 Q1 OP +33% YoY on New IP Axis Strategy
4. Nintendo FY26 Q1 OP +151% YoY, Boosted by Tariff Rebates, Strong Game Sales
5. DeNA: FY26 Q1 OP -46.3% YoY
6. Sega Sammy FY26 Returns to Q1 Profit with OP ¥2.38bil
7. CyberAgent’s Upwardly Revised OP Below Consensus Estimate
Technology: Industrial Electronics / Components / Semis & SPE / Precision
8. NAND, DRAM Contract Prices Rise in July
9. Ricoh FY26 Q1 OP +277% YoY
10. Tokyo Seimitsu FY26 Q1 OP +29% YoY, Raises Full-Year Guidance
11. Rohm FY26 Q1 OP ¥9.6bil Beating Consensus
12. Taiyo Yuden FY26 Q1 OP +53% YoY, Raises Guidance 50%
13. Fixstars FY26 Q3 OP Flat as AIBooster Customer Cancels
Chemicals / Materials
14. Sumitomo Bakelite FY26 Q1 OP 55% Above Consensus
15. TOTO Q1 FY26 OP -16% YoY, Below Consensus
16. Tosoh: FY26 Q1 OP +94% YoY
17. Ibiden FY26 Q1 OP +52.4% YoY, Full-Year Guidance Raised
18. Fujimi: FY26 Q1 OP +42% YoY
19. Nitto Boseki FY26 Q1 OP +84.8% YoY; Full-Year Guidance Revised Up
20. Fuso Chemical: FY26 Q1 OP +32% YoY
Autos / New Mobility
21. Isuzu FY26 Q1 Vehicle Sales Drop but OP Rise on Forex Gains
22. Toyota Raises FY26 Guidance on Forex, Lower Middle East Impact
23. Nissan Beats FY26 Q1 Estimates, Leaves Guidance Unchanged
24. MMC’s FY26 Q1 Short of Consensus
25. Mazda Beats FY26 Q1 Estimates, Guidance Unchanged
26. Subaru: FY26 Q1 OP -44.3% YoY, Below Consensus
27. Suzuki Lowers FY26 OP Guidance on Inclusion of Middle East Impact
28. Honda Beats FY26 Q1 Estimates; Raises FY26 Guidance on Currency
29. Musashi Seimitsu FY26 Q1 OP +28% YoY
30. Bridgestone’s FY26 Q2 Beat Estimates
Capital Goods / Machinery
31. MHI Strong FY26 Q1 Led by GTCC
32. Daikin A/C Margins Fall
33. Nabtesco Robot Gear Uptrend
34. IHI Releases Mixed FY26 Q1 Results
35. Furukawa’s FY26 Q1 Overshoots but Little Response
36. Fujikura’s FY26 Q1 Stuns and the Shares Soar
37. Daifuku Sees More Strong Chip Demand
Internet / eCommerce
38. LY Corp: FY26 Off to a Good Start
39. Mercari: FY26 Beats While FY27 Earnings Guidance Misses
40. Recruit Revises Upward on Strong Q1
Enterprise Software / IT Services
41. SBI Holdings FY26 Q1 PTP +91.3% YoY
42. IIJ: FY26 Q1 Preview
43. JMDC Beats Consensus Estimates In Solid Start to Fiscal Year
Pharma / Healthcare
44. Eisai FY26 Q1 OP +19% YoY
Miscellaneous / Market / Strategy / Macro
45. Wages +3.4% YoY in June as Positive Economic Signals Continue
PSA in the Press
Yen Bears Face Risks on Joint US-Japan Action, Strategists Say – Bloomberg [3 Aug]
Tokyo has inflation jitters again and while no one seems to mind too much that the government is having to support the yen, the risk is this becomes a 1992 UK-style one-way bet for macro funds. Should a government forex intervention be seen to fail, then we could see a real run on the yen, which would only make the inflation outlook even worse.
Kioxia Shares Gain as Buyback, Demand Seen Positive: Street Wrap – Bloomberg [3 Aug]
Pelham Smithers Associates (Pelham Smithers)
“Management’s guidance is punchy, even if it is short of consensus”
There’s a difference between a ‘miss’ and a downturn
Indications are that NAND price rises won’t be quickly erased and that makes it “much harder to justify” Kioxia’s low earnings multiple
Had hoped that production ramp-up at Kitakami K2 plant would deliver greater inventory improvement
Renesas Shares Climb 10% After 2Q Profit Beat: Street Wrap – Bloomberg [3 Aug]
Pelham Smithers Associates (Pelham Smithers)
The delayed earnings release “worried the market”
2Q results were solid and the industrial business and automotive operations did well
Autos performance was “unexpectedly good” given current state of the sector
Expects high-margin industrial business to keep growing through next year, fueled by physical AI, which justifies the valuation
Toyota Extends Decline as 1Q Profit Underwhelms: Street Wrap – Bloomberg [5 Aug]
Pelham Smithers Associates (Julie Boote)
Forecast upgrade was mainly on a much weaker yen and a less severe impact from the Middle East crisis
Performance and outlook seem “underwhelming” considering the better-than-feared Middle East impact and large currency gains
“There is currently little evidence of major efficiency improvements, and the sales performance was lacklustre”
Kyushu earthquake is a “risk factor” as it led to production suspension; potential output and sales impact not yet factored into guidance
Nintendo Up After 1Q Beat on Tariff Refunds, Games: Street Wrap
Pelham Smithers Associates (Pelham Smithers)
US tariff rebates helped lower costs while strong Tomodachi Life and Pokopia sales helped the top line
Super Mario Galaxy Movie also boosted licensing income
Switch 2 console and Switch 2 game sales are “two big worries”
“If this is all Nintendo is able to sell before prices go up, what will happen after it does?”
Software sales were only slightly higher than this time last year
Fire Emblem: Fortune’s Weave, Nintendo Switch Sports Resort and The Legend of Zelda: Ocarina of Time remake are now Nintendo’s three chances to boost Switch 2 sales this year
Bandai Namco Shares Extend Gains After 1Q Beat on Toy Strength – Bloomberg [7 Aug]
Excerpt: Earnings were a “standout performance” fueled by “staggeringly profitable” toy/hobby business, wrote UK-based analyst Pelham Smithers in a report
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