The Must Read PSA Weekly Research Round-up (week to 25 Jan)
REPORTS OUT THIS WEEK: NTT Data (9613 JT) – What to Expect When You’re Expecting 5G / IHI (7013 JT) – Good Prospects for FY19 / EARNINGS: We have earnings previews for Rohm, Sony, Nintendo, Asahi Kasei, Shin-Etsu Chemical, JSR, MMC, Mixi, NOK, Fanuc and CyberAgent / MACRO: Looking ahead to Japan’s Q4 GDP / COMPANY INSIGHTS: We discuss Toyota’s conquest of Europe as it looks to boost its market share / Fujitsu to introduce cloud-based document sharing product for clinical trial sites / More developments Nissan; read-across to the alliance with Renault / Supplier product glitch does not detract from our view that next year will be better for Subaru
The Weekly Comment by Pelham Smithers
With Yaskawa (6506 JT) having shifted its accounting year, there’s now more of a stuttering start to Japan’s earnings season. Tokyo Steel (5423 JT) reports, then there’s a hiatus, then Nidec (6594 JT) reports, then there’s another hiatus. Next week however should see earnings reports ramp up, led by JSR (4185 JT) on Jan 28, Shin-Etsu Chemical (4063 JT) on Jan 29 and Canon (7751 JT) on Jan 30.
Tokyo Steel is something of a law unto itself, so the fact that the shares fell after the company (1) revised up and (2) announced a share buyback, can’t really be viewed as unusual, by that stock’s own lights. Perhaps more interesting was the response to Nidec’s numbers. These, as with the earlier response to Yaskawa’s numbers, saw the shares rally despite the earnings downgrade. Nidec had of course telegraphed the downgrade and so the market was prepared – but it wasn’t as if the shares had moved dramatically even when the news was originally leaked.
The suggestion that the market is primed for a lot of bad news is further strengthened by the market’s response to the downward revision from NOK (7240 JT), which saw the shares gain almost 3% in the wake of the results announcement. NOK is a swing smartphone components supplier. Whereas this has usually meant that news from NOK impacts other smartphone supply chain names, this time we’ve gone so overboard into gloom and doom territory that it is tough to work out who is leading whom.
Reports / Flash Notes Published This Week: Headlines at a Glance
1. NTT Data (9613 JT) – What to Expect When You’re Expecting 5G
2. IHI (7013 JT) – Good Prospects for FY19
Company / Sector / Thematic Comments at a Glance
1. Previewing Nintendo’s (7974 JT) 3Q
2. Nidec (6594 JT)’s Profit Warning – Is the Stock Priced for a Recovery?
3. Previewing Sony’s (6758 JT) 3Q Numbers
4. Rohm (6963 JT) 3Q Preview
5. “Functional Games” Get Approved in China
6. GungHo Entertainment (3765 JT) Stands Out with Strong Performance
Chemicals / Materials
7. Previewing Shin-Etsu’s (4063 JT) Q3
8. Japan Display (6740 JT) Volatile Moves as Partner Talks Come and Go
9. Asahi Kasei (3407 JT): FY18 Q3 Preview
10. JSR (4185 JT) Active in Quantum Computing and 3D Printing
11. Inter Action (7725 JT) Presentation Fails to Excite
12. Bullish Comments from Tokai Carbon (5301 JT) on Graphite Electrodes
13. Positive Sales Development for Mitsubishi Motors (7211 JT) in Q3
14. France Denies Nissan / Renault Capital Structure Rebalancing Plans
15. Nissan (7201 JT) / Renault (RNO FP): All Is Well with The Alliance
16. Subaru (7270 JT) Announces Production Halt on Faulty Part
17. Toyota’s (7203 JT) Conquest of Europe
Auto Parts / Machinery
18. Fanuc (6954 JT) Q3 Preview: Poor Results, Decent Orders Anticipated But…
19. Daikin (6367 JT) Falling on China Woes? To Hold Meeting to Discuss Chemicals
20. NOK (7240 JT) Cuts Again and Shares Rise 2.7% to YTD high
Internet / eCommerce
21. ZOZO (3092 JT) to Review its New Membership Program
22. LINE (3938 JT) Slumps as Sell Recommendations Pile Up
23. Mixi (2121 JT): FY18 Q3 Earnings Preview
24. CyberAgent’s (4751 JT) FY19 Q1 Earnings Preview
25. Nexon Surges as Tencent and PE Firms Reportedly Weigh Potential Bids
26 .GMO Cloud (3788 JT) Ups FY18 OP and Dividend – Shares then Tank
27. Solxyz (4284 JT) Slashes FY18 OP Forecast on Higher-than-Expected Project Costs
28. Fujitsu (6702 JT) to Introduce Cloud-Based Document for Storing/Sharing Product for Clinical Trial Sites
PSA Company Visits, Tours and Interviews
• Visited / Had a Conference Call with: Enigmo (3665 JT) and NOK (7240 JT)
PSA in the Press
Pelham Smithers discusses Nintendo on Bloomberg: Nintendo Rebounds as Optimistic signs Emerge After A Brutal Year; and follows up with this sister article; Peak Video Game? Top Analyst Sees Industry Slumping in 2019
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