The Must Read PSA Weekly Research Round-up (week to 21 Dec)

REPORTS THIS WEEK: PKSHA Tech (3993 JT) – Going All-In on AI / Mazda (7261 JT): Will the Mazda3 Save the Day? / BIG PICTURE INSIGHTS: An update on gaming licenses in China / We look at the battered chemical shares / COMPANY INSIGHTS: Super Smash Bros Ultimate [SSBU] has glitches / Encouraging figures for CyberAgent’s (4751 JT) Abema Premium subscriptions / We look at the listing of Softbank’s mobile business / Sumitomo Chem’s (4005 JT) shares unrewarded for better pharma outlook

The Weekly Comment by Pelham Smithers

Are Small Cap Video Game Stocks a Value Trap?
Even prior to this latest downward move in the market, smaller cap video game stocks had seen massive value compression, and the situation has only got worse with the latest market sell-off. Not expensive to begin with, the sector has been sold-off first over worries of market cannibalization by Battle Royale games, then they got caught up in the Activision (ATVI US) / EA (EA US) sell-off, which was linked to the FAANG sell-off. Then they got thrown into the China license impasse caldron to stew some more. The result is that several names have a market cap that’s less than double the cash on the balance sheet. Add in investments, which the industry is always keen to do, and adjusted EV in some instances is nugatory.

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

1. PKSHA Technology (3993 JT): Going All-In on AI
2. Mazda (7261 JT): Will the Mazda3 Save the Day?

Company / Sector / Thematic Comments at a Glance

Technology: Consumer Electronics / Gaming / Precision / Components

1. China to Resume Game Licensing? Good News for Capcom (9697 JT), Nexon (3659 JT)
2. Qualcomm (QCOMM US) Wins 2nd Court Order vs Apple (AAPL US) – Implications for Suppliers
3. Smash Bros Bugs – A History
4. Sony (6758 JT) Set to be No. 4 in US Box Office in 2018
5. Game Licensing Logjam in China Continues

Chemicals / Materials

6. Sumitomo Chemical (4005 JT) and the Bipolar Reaction to Latuda News
7. FDK’s (6955 JT) Small Solid-State LiB
8. Battered Chemical Shares – Consider Ube (4208 JT)

Autos

9. No Panic Among Nissan (7201 JT) Investors
10. Nissan Laying off Workers in Mexico
11. Mazda’s (7261 JT) Production Lines to Become More Flexible

Auto Parts / Machinery

12. Hoshizaki (6465 JT) Rising Ahead of Dec 27 Deadline

Telecom

13. SoftBank (Mobile) (9434 JT) Now It Has Listed

Internet / eCommerce

14. Mercari (4385 JT) to Dissolve Mercari Europe and Merpay 13
15. CyberAgent’s (4751 JT) Abema Premium Subscribers Rise 4.5x YoY

Enterprise Software

16. GMO Internet (9449 JT) To Sell Down Stake in GMO Payment (3769 JT)
17. Outsourcing Companies Hit 52-Week Lows
18. Oracle Japan (4716 JT) Reports a Robust H1

Pharma

19. Takeda (4502 JT) Gets Moody’s Downgrade
20. Eisai (4523 JT)’s Humira Less Effective than Lilly’s (LLY US) Taltz

Macro

21. Japan Enters Bear Market
22. Japan Trade Numbers Worsen

List of PSA Published Reports Since ??????? to Date

PSA Company Visits, Tours and Interviews

Interviewed / Conferenced Call with: Minebea Mitsumi (6469 JT), IHI (7013 JT)
Visited: Ube Industries (4208 JT)
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