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

Reports Out This Week: Nintendo (7974 JT) / Mercari (4385 JT) / INDUSTRY INSIGHTS: Japan tech plays hit by Micron’s earnings warning / MISCELLANEOUS, MARKET & MACRO: Topix 100 OP -1% YoY through Friday / COMPANY INSIGHTS, NEWS, PREVIEWS & RESULTS: Nexon 2Q OP +47% YoY / Tokyo Electron 1Q OP -17% YoY / SoftBank’s 1Q ¥3.2tril pre-tax loss / Nissha hikes FY22 target again / Toray guides for higher carbon fiber OP, cuts plastics / Market reacts positively to Isuzu’s Q1 results / Mazda reports an operating loss / Honda raises its FY22 guidance / Hino & Toyota face US lawsuit / Daifuku’s Q1 falls despite boost from weak yen but shares firm / Nabtesco to pass on costs in FY23 / Fujikura soars 16% on record OP

The Weekly Comment by Pelham Smithers

Pelham Smithers looks at just how well Hitachi’s Lumada – the AI process that Hitachi applies to manufacturing and is widely regarded as the best industrial AI offering globally – is doing and concludes that management has been underselling the story so far. If Lumada continues to grow around the 20% rate, then by FY26, it could be generating ¥450bil more in EBITDA than it is generating now. Given that Hitachi’s total EBITDA is targeted at ¥1.44tril in FY22, Lumada, alone, could add a third to EBITDA in four years, all else being equal.

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

1. Nintendo (7974 JT) Outlook
2. A Review of Mercari (4385 JT)

Company / Sector / Thematic Comments at a Glance

Technology: Consumer Electronics, Gaming

1. Nexon (3659 JT): 2Q FY22 OP +47% YoY
2. Has Sony (6758 JT) Got Under Microsoft’s Skin Over Call of Duty?
3. Other Consumer Elec / Gaming News & Moves That Caught Our Eye

Technology: Industrial Electronics / Components / Semis & SPE / Precision

4. Tokyo Electron (8035 JT) 1Q FY22 OP Falls 17% YoY
5. Micron’s (MU US) Earnings Warning Hits Japan Tech Names
6. Other Tech-Related News & Moves That Caught Our Eye

Chemicals / Materials

7. Nissha (7915 JT) Hikes FY22 Guidance a Second Time
8. Toray (3402 JT) Guides for Higher Carbon Fiber OP, Cuts Plastics
9. Other Chemical / Material-Related News & Moves That Caught Our Eye

Autos

10. Market Reacts Positively to Isuzu’s (7202 JT) FY22 Q1 Results
11. Mazda (7261 JT) Reports an Operating Loss for FY22 Q1
12. Honda (7267 JT) Raises FY22 Targets
13. Hino (7205 JT) and Toyota (7203 JT) Face US Lawsuit
14. Other Auto-Related News & Moves That Caught Our Eye

Auto Parts / Machinery

15. Daifuku (6383 JT): FY22 Q1 OP Falls Despite Boost From Currency
16. Nabtesco (6268 JT) to Pass on Costs in FY23
17. Fujikura (5803 JT) Shares Soars 16% on Record OP
18. SMC (6273 JT): Strong Q1 Despite Lockdown

Internet / eCommerce

19. Mercari’s FY22 Results Come in Ahead of Consensus
20. Trend Micro’s (4704 JT) FY22 Q2 OP Misses
21. Strong Response to GMO Financial Gate’s (4051 JT) Q3 Results
22. Rakuten (4755 JT) Reports a Wider than Expected FY22 Q2 OP Loss

Enterprise Software / IT Services

23. NTT Data (9613 JT) Beats Consensus for FY22 Q1, Maintains FY Forecasts
24. ExaWizards (4259 JT) Aiming for Profitability in FY22 Q3

Telecom

25. SoftBank (9984 JT) 1Q FY22 Pre-tax Loss ¥3.2tril
26. What’s Wrong at SoftBank Corp (9434 JT)?
27. Other Telecom News & Moves That Caught Our Eye

Pharma

28. Pharma News & Moves That Caught Our Eye

Miscellaneous

29. Other News & Moves That Caught Our Eye

Market / Strategy / Macro

30. Topix 100 OP -1% YoY Through Friday

PSA Company Visits, Tours and Interviews

Small Meeting with: Sumitomo Chemical (4005 JT), email Q&A with ExaWizards (4259 JT)
Presentations at: Mercari (4385 JT), Rakuten (4755 JT), Fujifilm Holdings (4901 JT), Nissan Chemical (4021 JT), Nissha (7915 JT), Toray (3402 JT), Kaneka (4118 JT), Kuraray (3405 JT), Sumitomo Bakelite (4203 JT), Tosoh (4042 JT), Teijin (3401 JT), Daifuku (6383 JT), KHI (7012 JT), IHI (7013 JT), Fujikura (5803 JT), Kohoku Kogyo (6524 JT)

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