The Must Read PSA Weekly Research Round-up (week to 31 Jul)

REPORTS: Asahi Kasei (3407 JT) / Nidec (6954 JT) / Nissan (7201 JT) Fanuc (6954 JT) / Yaskawa (6506 JT) / INDUSTRY INSIGHTS: Q1 2020 software spend even stronger than originally thought / MACRO: Japan’s trade data / Plus additional COMPANY PREVIEWS / RESULTS and INSIGHTS

The Weekly Comment by Pelham Smithers

This week, Pelham Smithers’ Weekly Comment isn’t so much a comment as a quiz question illustrating an investment point.

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

1. Asahi Kasei (3407 JT): Contemplating a Recovery – LiB Separators to be Back in Focus
2. Nidec (6594 JT) FY20 Q1: OP Growth on Cost Cuts, Favourable Base of Comparison
3. Nissan (7201 JT) FY20 Q1 Results and Grim Outlook
4. Fanuc (6954 JT) FY20 Q1 – China Strong at 30% of Total Sales
5. Yaskawa Electric (6506 JT) FY20 Q1 Results – Momentum Lapse

Company / Sector / Thematic Comments at a Glance

Technology: Consumer Electronics, Gaming

1. Can Panasonic (6752 JT) Make Money in the 1Q? / Results Comment
2. Nexon (3659 JT) Has Another Mobile Hit
3. Square Enix’s (9684 JT) Dragon Quest Tact Tops Download Charts / CyberAgent’s (4751 JT) New VR Mode
4. Entertainment / Gaming Moves That Caught Our Eye

Technology: Industrial Electronics and Electronic Components

5. JAE (6807 JT) Loses Money in Q1 – Read Across to NEC (6701 JT)
6. NEC (6701 JT): Reports an Operating Loss for FY20 1Q
7. Hitachi (6501 JT): FY20 1Q OP -53% YoY, Leaves Full Year Forecast Unchanged
8. Fujitsu (6702 JT):1Q OP +558% YoY as it Forecasts FY20 OP ¥212bil (+0.2% YoY)
9. Anritsu (6754 JT): FY20 1Q OP +90% YoY
10. Murata (6981 JT) FY20 1Q OP -18% YoY
11. Alps Alpine (6770 JT) Reports an Operating Loss for FY20 1Q
12. NEC (6701 JT) Extends AI Drug Platform Ties

Technology: Semiconductor Production Equipment & Precision

13. Intel (INTC US) News Means TSMC (2330 TT) Doesn’t Need Huawei to Fill EUV Capacity
14. Tokyo Electron (8035 JT) FY20 Q1 OP +68% YoY
15. Screen Disappoints on Guidance
16. Advantest (6857 JT): 1Q OP -11% YoY, Forecasting FY20 OP ¥45bil (-23% YoY)
17. Canon Marketing’s (8060 JT) 2Q Shows Canon Inc (7751 JT) What to Do
18. Canon (7751 JT) Reports First Quarterly Loss

Chemicals / Materials

19. TDK (6762 JT): Results are Well Received
20. Dexerials Delivers Successive Strong Quarters
21. Shares of Nissha (7915 JT) and Japan Display (6740 JT) Rise
22. Electronic Materials Results / Previews: Shin-Etsu Polymer / Shin-Etsu Chemical / Bakelite / TOK / Dexerials
23. Celanese (CE US) Sells Polyplastics JV Stake to Daicel (4202 JT)

Autos

24. Nissan (7201 JT) Shares Fall on Bleak Earnings Outlook
25. Mitsubishi Motors (7211 JT) Predicts Massive FY20 Operating Loss
26. Mazda (7261 JT) Reports Sharp Drop in FY20 Q1 Sales but Expects H2 Recovery 27. Maruti Suzuki (MSIL IN) Reports a Net Loss for FY20 Q1

Auto Parts / Machinery

28. Daikin (6367 JT) New Listing High with ¥20,000 in Sight
29. HCM (6305 JT) Fades in China; Positive for Nabtesco (6268 JT)
30. Nachi-Fujikoshi (6474 JT) Affirms China Strength; “New Norm”
31. Komatsu (6301 JT) FY20 Q1 China +19% YoY; Positive for Nabtesco
32. Good FY20 Q1 from Fanuc (6954 JT) Spoiled by Weak Guidance

Internet / eCommerce

33. CyberAgent’s (4751 JT) FY20 Q3 OP Beats
34. CyberAgent Sold Off Following FY20 Q3 OP Beats
35. Demae-can (2484 JT) Continues to Fall Amid Intensifying Competition
36. ZOZO’s (3092 JT) FY20 Q1: A Positive Surprise
37. Mercari Reaches a New High
38. Mercari (4385 JT) Sells its 6% Stake in BASE Inc (4477 JT)
39. Results-Related Moves That Caught Our Eye: Ceres (3696 JT) / Atled (3969 JT)
40. LINE’s (3938 JT) Disappointing FY20 Q2

Enterprise Software

41. Cybozu (4776 JT) Wins Deal with Osaka Prefecture / Raises FY20 Guidance
42. TIS Inc (3626 JT) FY20 Q1 is Chance to Get Update on Cashless Payments
43. Obic’s (4684 JT) FY20 Q1 Results Lack Sparkle
44. Obic Business Consultants (4733 JT) Increases Advertising
45. NRI FY20 Q1 Preview: Looking for Signs of Outperformance / Results Comment
46. NTT Data: To Forecast, or Not to Forecast?
47. M3 Inc Reports FY20 1Q OP +26%
48. Q1 2020 Software Spend Even Stronger Than Originally Thought
49. Net One Systems (7518 JT) FY20 1Q OP +53% YoY

Pharma

50. Report in Nature Identifies ONO-5334 as a Potential Covid-19 Treatment
51. Chugai Strong 2Q FY20 (Dec) Showing
52. Pharma Best-Performing Sector on July 28

Miscellaneous

53. Battle of the “Masas”
54. Kao (4452 JT)

Macro

55. Japan’s Trade Data

PSA Company Visits, Tours and Interviews

• Interviewed / Conference Call with: Nissan (7201 JT), Money Forward (3994 JT) RPA Holdings (6572 JT) (Email Q&A NTT Data (6913 JT)
• Watched earnings webcast of Z Holdings (4689 JT), ZOZO (3092 JT)
• Participated in earnings call with: TDK (6762 JT) Shin-Etsu Chemical (4063 JT), JSR (4185 JT), Hoya Corp (7741 JT), Nitto Denko (6988 JT), Ube Industries (4208 JT), Zeon Corp (4205 JT), Sekisui Chemical (4204 JT), Dexerials (4980 JT), Tokuyama (4043 JT), Maxell (6810 JT), ZOZO (3092 JT)

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