The Must Read PSA Weekly Research Round-up (week to 05 June)

REPORTS: Japan Stock Market Strategy “Beyond Post-Covid” / INDUSTRY INSIGHTS: Memory price falls hint at end demand problem for tech / US auto sales contraction eased in May / Survey shows company IT spending plans remain robust despite Covid-19 / Japanese megabanks study digital currency expansion / LiB supply chain stocks are recovering / MACRO / MARKET: Money supply surging
Household spending / Nikkei trending “Post-Lockdown” / Plus additional COMPANY INSIGHTS

The Weekly Comment by Pelham Smithers

Buying the likes of Nippon Steel now could make for great dinner party conversation, similar to being able to say you bought gold just when Gordon Brown sold. But it is hugely risky, and it is debatable whether it is worth it. The steel sector is worth just 0.59% of Topix. Recruit (6098 JT) – the largest stock in the services sector – is worth almost double that at 1.15%, on its own. The key call is whether you stick with tech, and just like buying bonds in the early 2000s, that is a bet on whether we enter never-seen-before territory. But given how strange are these times we live in, that’s not necessarily a bad bet.

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

1. Japan Strategy – Beyond Post-Covid

Company / Sector / Thematic Comments at a Glance

Technology: Consumer Electronics, Gaming

1. Readthrough for Sony (6758 JT) from the Warner Music (WMG US) IPO
2. Sony (6758 JT) June 3 Event Postponed
3. Video Games Plays: Movers This Week

Technology: Industrial Electronics and Electronic Components

4. Alps Alpine (6770 JT) Eyes a Strong 2H FY20
5. Market Doesn’t Punish Hitachi (6501 JT) for the 44% Fall Forecast for FY20 OP
6. NEC (6701 JT) in Discussions with the UK Government for 5G Work
7. Nidec (6594 JT) to Open a R&D Centre in China

Technology: Semiconductor Production Equipment & Precision

8. Memory Price Falls Hint at End Demand Problem for Tech

Technology: Bitcoin / Cryptocurrency and Blockchain

9. Japanese Megabanks Study Digital Currency Expansion
10. IIJ (3774 JT) Affiliate to Host a Study Group on Digital Currency Settlement

Chemicals / Materials

11. LiB Supply Chain Stocks are Recovering
12. Mitsui Chemicals (41863 JT) Boosted by Broker Upgrade

Autos

13. Yamaha Motor (7272 JT) FY20 Q1 OP Drops on Weak Demand in All Divisions
14. US Auto Sales Contraction Eases in May

Auto Parts / Machinery

15. SMC (6273 JT) / Daifuku (6383 JT) Renew Listing Highs; Daikin Heating Up
16. Nabtesco (6268 JT) Shares Near Year High

Internet / eCommerce

17. Mercari (4385 JT): FY20 Q4 Losses Likely to Decline Substantially
18. GA Technologies (3491 JT) to Partner Taisei Housy

Enterprise Software

19. Survey Shows Company IT Spending Plans Remain Robust Despite Covid-19
20. Poletowin Pitcrew (3657 JT) Surges Ahead of FY20 Q1 Earnings Announcement
21. Unshowy DTS Gaining Traction

Pharma

22. Daiichi Sankyo’s (4568 JT) Problem is not Dosage, but Finely Tuned Valuation
23. Mixed Moves in Pharma

Miscellaneous

24. V-Cube (3681 JT) Very Much Back in the Video-Conferencing Picture
25. Askul’s (2678 JT) Lohaco e-Shopping Site Enjoys 25% YoY Rise in May Sales
26. Dentsu Receives Bomb Threat

Market / Strategy

27. Nikkei Goes all “Post-Lockdown”

Macro

28. Grim Retail Sales in May
29. Monetary Base Rises
30. April Household Spending in Japan Sees Less of a Decline than the UK and the US

PSA Company Visits, Tours and Interviews

• Visited: Shin-Etsu Chemical (4063 JT)
• Interviewed / Conference Call with: HCM (6305 JT),
• Participated in small meeting with: Sumitomo Chemical (4005 JT)
• Participated in strategy call with: Toray (3402 JT), Mitsui Chemicals (4183 JT), NGK Spark Plug (5334 JT)

PSA In the Press

• After the Renault-Nissan alliance strategy was released, PSA’s autos analyst Julie Boote was interviewed about the alliance and on Nissan itself.
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/renault-nissan-find-right-path-forward-but-trade-offs-inevitable-58867773
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/nissan-seeks-to-arrest-decline-with-new-midterm-strategy-58741714
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