The Must Read PSA Weekly Research Round-up (week to 15 August)
Reports / Flash Notes Summaries
1. Autos: Large US Import Tariff Hit Dismissed by Markets
As the US is introducing new import tariffs, the auto sector is among the worst hit in corporate Japan. Japanese automakers are set to book major losses related to tariffs, leading to substantial FY25 earnings’ declines. Yet, after an initial negative stock market reaction, share prices have recovered close to or above pre-tariff levels. Analyst Julie Boote investigates.
2. Nintendo (7974 JT) – Even More Switched On
Where next for Nintendo? Pelham Smithers explains the many opportunities which are opening up for the company in the wake of the Switch 2 launch.
3. Moriya Transportation Engineering & Maintenance (6226 JT) – Market Missing GPM Improvement
Analyst Hiroyuki Terada has revised up his forecasts for FY25~FY27 and despite the shares having doubled, finds the stock is still on undemanding valuations.
Industry Insights
Video games round-up
NAND joins DRAM in seeing price gains
Bifurcation of Automation stock performance continues
Readthrough for Japanese equities from “crypto rubicon”
Domestic plays support by strong Q2 private consumption
Company Insights / News
Toyota NA position remains solid
Fujikura & SEI new listing highs
Company Previews / Results
AMAT follows TEL in giving weak guidance
Nexon FY25 Q2 OP -17% YoY
Cover Corp’s FY25 Q1 mixed, FY25 guidance unchanged
Istyle FY25 results / FY26 CE beat
Net Protections revises up
SRE Holdings FY25 Q1 sales and OP drops
ExaWizards reports first ever Q1 OP, but sales growth limited
Appier FY25 Q2 OP beats consensus estimates
PKSHA FY25 Q3 OP beats consensus estimates
Company Insights: News / Previews & Results
Hitomile FY25 Q1 OP +3% YoY, ahead of plan
TKP’s revises up, new guidance still conservative
Amvis FY25 1H slightly ahead of plan
Park24 July KPIs
Macro / Market / Misc.
Are Ishiba’s days as PM numbered?
Producer price inflation slows to +2.6% YoY in July
Japan shrugs off tariff concerns to deliver positive Q2 GDP performance
The Weekly Comment by Pelham Smithers
Nikkei Newspaper Article: Nikkei 225 average to hit ¥48,000 by year-end, says Smithers of Pelham Smithers in the UK
Company / Sector / Thematic Comments at a Glance
Technology: Consumer Electronics, Gaming
1. Video Games Round-Up
2. Nexon FY25 Q2 OP -17% YoY
3. Other News & Moves That Caught Our Eye
Technology: Industrial Electronics / Components / Semis & SPE / Precision
4. NAND Joins DRAM With Price Gains
5. AMAT Follows TEL in Giving Weak Guidance
6. Other News & Moves That Caught Our Eye
Chemicals / Materials
7. Other Chemical / Materials-related News & Moves That Caught Our Eye
Autos / New Mobility
8. Toyota NA Position Remains Solid
9. Other News & Moves That Caught Our Eye
Auto Parts / Machinery / Capital Goods
10. Continued Bifurcation of Automation Stock Performance
11. Fujikura & SEI New Listing Highs
Internet / eCommerce
12. Cover’s FY25 Q1 Mixed, FY25 Guidance Unchanged
13. Istyle FY25 Results Beat and FY26 Guidance Ahead of Consensus
14. Net Protections Revises Up
15. Strong 2025 Q2 Private Consumption Positive for Domestic Demand Plays
Enterprise Software / IT Services
16. SRE Holdings FY25 Q1 Sales and OP Fall but No Change to Full-Year
17. Appier FY25 Q2 OP Beats Consensus Estimates
18. PKSHA FY25 Q3 OP Beats Consensus Estimates
19. ExaWizards Reports First Ever Q1 OP, But Sales Growth is Limited
Small- / Mid-Cap Insights
20. Amvis to Delay FY25 Q2 Results Release
21. Hitomile FY25 Q1 OP +30% YoY Ahead of Plan
22. TKP New Guidance Still Conservative
23. Amvis FY25 1H Slightly Ahead of Plan
24. Park24 July KPIs
Macro / Market / Strategy / Misc.
25. Are Ishiba’s Days as PM Numbered?
26. Producer Price Inflation Slows to +2.6% YoY in July
27. Japan Shrugs Off Tariff Concerns to Deliver Positive Q2 GDP Performance
28. Readthrough for Japanese Equities from “Crypto Rubicon”
29. Other News & Moves That Caught Our Eye
PSA in the Press
Pelham Smithers features in the following article in which he notes that European stocks already seem overvalued, and Chinese stocks (due to economic uncertainty) are difficult to buy apart from tech stocks. If investors shift simply a small amount of their funds from US stocks to Japanese stocks, it will have a big impact (due to the difference in market size). Nikkei Stock Average hits a new high, optimistic about money inflation and tariff impact – Japan Keizai Shimbun [https://www.nikkei.com/article/DGXZQOUB122Q30S5A810C2000000/ ]
PSA Company Visits, Tours and Interviews
Visited: Open Up Group (2154 JT), Japan Elevator Service (6544 JT), Anicom Holdings (8715 JT)
1-1 Call with: TKP (3479 JT), Hitomile (7686 JT), Amvis Holdings (7071 JT), Intermestic (262A JT) Zoff Store (Ebisu Branch, Shibuya Branch, Jiyugaoka Branch, Akasaka Branch, Shinjuku Branch), Koshidaka Holdings (2157 JT), Park24 (4666 JT), Toyota Motor (7203 JT)
Presentations at: Novarese (9160 JT), Lilycolor (9827 JT) (video)
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