The Must Read PSA Weekly Research Round-up (week to 4 July)
Reports / Flash Notes Summaries
1. Japan Stock Market Strategy: 2025 Q3
As discussed in our 2025 Q Strategy report, the four key conditions in place to propel the Japanese stock market higher in 2005 H2 were: (1) cheap valuations, (2) strong earnings growth, (3) BoJ being behind the curve and (4) fund flows going back into Japanese equities (foreign net buying). In our 2 Jan 2025 Japan Perspective, we argued that we were moving towards (but had not yet reached) a situation whereby the first four conditions were being met with sufficient vigour to trigger another leg up for the stock market. Three months ago, we suggested that the first three were being met, at least as vigorously, and perhaps more so, with a question mark over the fourth. The issue now is whether the argument is weaker, stronger, or similar. So, it makes sense to revisit the situation, to see what, if anything, has changed.
2. JMDC (4483 JT) – Could Valuations Take a Back Seat in the Current Market?
JMDC shares have rallied +56% since 7 April, pushing EV/OP above 20x. However, shares are still more than 50% below their 2021 peak. With the company in good shape to improve margins over the next three years thanks to an improving sales mix and balance of clients, and with the IT Service sector being back in vogue in the Japanese market, we think it is possible that valuations might take a back seat.
Industry Insights
Video games round-up
Japan’s construction market continues to swell
As US Q2 auto sales increase, a downward trend becomes apparent
Electric engineering plays rally
Miscellaneous / Market / Macro
May industrial production +0.5% MoM
Household spending surges in May
Improved polling for LDP, Koizumi
Company Insights: News / Previews & Results
Capcom showcase underscores how firm has stepped up again
Switch 2 availability improves
Renesas situation as Wolfspeed declares bankruptcy
The case for Honda over Toyota
Fujikura hits listing high
Mitsubishi Electric listing high on nuclear fusion
Subaru bracing for import tariff impact
Oracle Japan FY24 results beat company guidance, but are wide of consensus estimates
Insource June KPIs remain strong
Kakaku.com: a revisit
Oracle Japan FY24 results beat company guidance, but are wide of consensus estimates
Shift: FY25 Q3 preview
Askul gives weak guidance as growth dries up
Insource June KPIs remain strong
Intermestic June KPIs
The Weekly Comment by Pelham Smithers
Weekly comment text goes here.
Usually, Japan’s House of Councillors election has little more to offer than curiosity interest. Not this time, as the coalition government risks being in a minority in both houses.
Pelham smithers explains.
Company / Sector / Thematic Comments at a Glance
Technology: Consumer Electronics, Gaming
1. Video Games Round-Up
2. Capcom Showcase Underscores How Firm Has Stepped Up Again
3. Switch 2 Availability Improves
4. Other News & Moves That Caught Our Eye
Technology: Industrial Electronics / Components / Semis & SPE / Precision
5. Renesas Situation as Wolfspeed Declares Bankruptcy
6. Other News & Moves That Caught Our Eye
Autos / New Mobility
7. As CY25 Q2 US Auto Sales Rise, a Downward Trend Becomes Apparent
8. The Case for Honda Over Toyota
9. Subaru Bracing for Import Tariff Impact
10. Other News & Moves That Caught Our Eye
Auto Parts / Machinery / Capital Goods
11. Fujikura Hits Listing High
12. Mitsubishi Electric Listing High on Nuclear Fusion
13. Yaskawa Cuts FY25 OP by -28%
14. Other News & Moves That Caught Our Eye
Internet / eCommerce
15. Kakaku.com: A Revisit
16. Other News & Moves That Caught Our Eye
Enterprise Software / IT Services
17. Oracle Corp Japan FY24 Results Beat Guidance but is Wide of Consensus
18. Shift: FY25 Q3 Preview
Small- / Mid-Cap Insights
19. Insource June KPIs Remain Strong
20. Intermestic June KPIs
Miscellaneous / Market / Strategy / Macro
21. May Industrial Production +0.5% MoM
22. Household Spending Surges in May
23. Improved Polling for LDP, Koizumi
24. Japan’s Construction Market Continues to Swell
25. Electrical Engineering Construction-Plays Continues Yesterday’s Rally
26. Askul Gives Weak Guidance as Growth Dries Up
27. Other News & Moves That Caught Our Eye
PSA Company Visits, Tours and Interviews
Visited: Seika Sangyo (8061 JT)
1-1 Call with: Insource (6200 JT), Open Up Group (2154 JT), Hitomile (7686 JT), Intermestic (262A JT)
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