The Must Read PSA Weekly Research Round-up (week to 7 Mar)
Reports / Flash Notes Summaries
1. Fujikura (5803 JT) – AI Theme FY25; Telecom Carriers FY26
AI will continue to drive Fujikura’s OP in FY25, although we also expect a pick-up in telecom carrier demand from FY25 Q4 and BEAD / BABA subsidies in the US in FY26. Accordingly, William Nestuk has adjusted his earnings model upward and suggests that, based on his FY26 numbers, the shares are 20~25% undervalued in light of the AI / Telecom themes.
2. TIS Inc (3626 JT) – Looking for a Growth Recovery in FY25
TIS results came in ahead of consensus for FY24. Analyst Lindsay Whipp anticipates earnings growth to recover in FY25, supported by a strong order backlog,
3. M&A Research Institute (9552 JT) – Risk of Downward Revision to FY25 Earnings
After reviewing MARI’s FY25 Q1 performance and discussing the outlook with management, small-cap specialist Hiroyuki Terada revises down his estimates for FY25~27.
4. Kakuyasu Group (7686 JT) – Hike of Income Tax Threshold Could be Positive
PSA small-cap analyst Hiroyuki Terada revises down his FY24~26 forecasts for food and beverage wholesaler Kakuyasu but finds that after FY24’s challenges, prospects for the company are set to improve. In addition, any changes to the income tax threshold, which are expected, would also take pressure off hiring costs.
5. Kyoritsu Maintenance (9616 JT) – Solid ADRs to Continue
After a discussion with management, PSA’s small-cap analyst Hiroyuki Terada revises up his FY25 and FY26 numbers for dormitory / hotel operator Kyoritsu Maintenance on the back of rising average daily rates.
6. Intermestic (262A JT) – The Price Hike Drives SSS by +3%
Hiroyuki Terada revises up his earnings for eyeglass retailer Intermestic and notes that valuations are at a substantial discount to peer JINS and the Topix Retail Index.
Industry Insights
Video games round-up
US import tariffs to hurt Japanese automakers
Japan auto sales bounce back in February
Defence stocks remain in vogue
Company Insights: News / Previews & Results
Monster Hunter Wilds sells 8mil copies in four days
Might GTA6 sell for US$100+?
Tariffs are a problem for Nintendo (7974 JT), but are not its only problem
Toyota (7203 JT) announces shareholder benefit program
Rumour mill running on Nissan’s new CEO
UBE Corp – businesses in flux
Mercari (4385 JT) launches MVNO service – Mercari Mobile – read across for Rakuten Mobile
LY Corp (4689 JT) shares hit a one-year high
Insource reports February KPIs
Intermestic (285A JT) February KPIs
Ceres (3696 JT) joins the NERO chain
Treasure Factory (3093 JT) February KPIs
Market / Macro
Japan’s stock market goes domestic
Japan Composite PMI up to 52.0
Trump trade / Merz trade related stocks to the fore; readacross to global bond markets
The Weekly Comment by Pelham Smithers
Universal Music Group has reported a 2024 pre-tax profit of €2.87bil [US$3.11bil] on revenues of €11.8bil [US$12.8bil], beating Sony on revenues for the seventh successive year. Worryingly, this was Sony’s best chance of being No. 1 in the global music industry.
Pelham Smithers considers Sony’s Music business, past, present and future.
Company / Sector / Thematic Comments at a Glance
Technology: Consumer Electronics, Gaming
1. Video Games Round-Up
2. Monster Hunter Wilds Sells 8mil Copies in Four Days
3. Might GTA6 Sell for US$100+?
4. Tariffs Are a Problem for Nintendo, but Are Not its Only Problem
5. Other News & Moves That Caught Our Eye
Technology: Industrial Electronics / Components / Semis & SPE / Precision
6. Other News & Moves That Caught Our Eye
Chemicals / Materials
7. UBE Corp – Businesses in Flux
Autos / New Mobility
8. US Import Tariffs Set to Hurt Japanese Automakers
9. Japan February Auto Sales Bounce Back
10. Toyota Announces Shareholder Benefit Program
11. Rumour Mill Running on Nissan’s New CEO
12. Other News & Moves That Caught Our Eye
Auto Parts / Machinery / Capital Goods
13. Defence Stocks Continue as Trading Volume Leaders, Hitting New Highs
14. Daikin and IHI See Broker Upgrades
Internet / eCommerce
15. Mercari Launches MVNO Service – Read Across to Rakuten Mobile
16. LY Corp Shares Hit a One-year High
17. Other News & Moves That Caught Our Eye
Pharma / Healthcare
18. Pharma / Healthcare News & Moves That Caught Our Eye
Small- / Mid-Cap Insights
19. Insource Reports February KPIs
20. Intermestic February KPIs
21. Treasure Factory February KPIs
Miscellaneous / Market / Strategy / Macro
22. Japan Composite PMI Up to 52.0
23. Japan’s Stock Market Goes Domestic
24. Trump Trade / Merz Trade-Related Stocks to the Fore – Implications on Global Bond Markets
25. Ceres Joins the NERO Chain
26. Other News & Moves That Caught Our Eye
PSA in the Press
PSA Autos / New Mobility analyst Julie Boote is cited in this Japan Times article “Toyota to hand out shareholder perks to entice retail investors” [4 March] discussing Toyota’s efforts to woo retail investors with perks.
PSA small-cap analyst Hiroyuki Terada features in the Bloomberg Taking Stock article entitled “Restaurants, Retail Set to Win on Japan Pay Hikes” [6 March].
PSA Company Visits, Tours and Interviews
Visited: Intermestic (262A JT), Asahi Kasei (3407 JT), Fujifilm Holdings (4901 JT), UBE Corp (4208 JT)
1-1 Call with: Insource (6200 JT), Hotland (3196 JT), Zensho Holdings (7550 JT), QB Net Holdings (6571 JT)
Presentations at: Open Up Group (2154 JT), Sumitomo Chemical (4005 JT)
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