The Must Read PSA Weekly Research Round-up (week to 28 Mar)
Reports / Flash Notes Summaries
1. Advantest (6857 JT): Winning Market share in a Booming Business
The chip testing business is enjoying the benefits of the AI chip boom perhaps even more than the wafer fabrication business is, while being less exposed to risks like China. Even better for Advantest is the fact that amid this boom, it is also winning market share from Teradyne. Analyst Pelham Smithers expects OP to grow 4x between FY23 and FY26, and it shouldn’t stop there.
2. Disco (6146 JT) Enjoying Its Near-Monopoly
Analyst Pelham Smithers discusses Disco’s performance having improved due to better gross margins and sales growth. The company expects continued growth in revenue and gross profit, despite some challenges. Future growth is anticipated in the AI chip and SiC markets.
3. SMID-Cap IT Services: Continued Gap Between Valuations and Growth
Back in August of last year, analyst Lindsay Whipp wrote a couple of reports about the significant gap between the share price performance of a number of small- and mid-cap IT service companies and the strong growth expectations coming from consensus estimates. This report is an update identifying several companies in the high growth, low valuations quadrant worth a revisit.
4. Mercari (4385 JT): Empowering the Ecosystem with New Service Launches
In-depth report by analyst Thao Nguyen, outlining Mercari, Japan’s dominant C2C flea app platform operator, with a highly engaged user base which it is leveraging to expand with new services.
5. Bridgestone (5108 JT): Opportunities and Risks for FY25
Bridgestone faces another challenging year, with rising competition from Asian imports, higher expenses and increasing raw material prices. At the same time, the tire maker is successfully expanding its high-margin product line-up and starting to benefit from restructuring measures taken in the last few years. Analyst Julie Boote evaluates key factors determining the profit outlook, and how markets might react to the latest developments.
Industry Insights
Video games round-up
Rating Japanese video game stocks ahead of Switch 2 reveal
Where interest in tech is focused
Compact camera ASPs hit record high in January
US to impose 25% import tariffs on autos: Auto industry and government consider their options
Feb European auto sales -3.1% YoY on weak petrol car demand
Feb tourism data
Pharma round-up
Digital invoicing survey suggests still some way to go for full adoption
Climate change back in news amid high temperatures, forest fires, early cherry blossom
Company Insights: News / Previews & Results
Bandai Namco (7832 JT) games talk, Switch 2 AI patent, hint upcoming console more powerful than expected
Switch Nintendo (7974 JT) Direct delivers as expected
CyberAgent (4751 JT) new game launch over-shadowed by accounting scandal
Advantest (6857 JT) – winning market share in a booming business
Nidec (6594 JT) ramps up production for AI data centre equipment
Ryobi (5851 JT) inaugurates new Gigacast facility
JX (5016 JT) Advanced Metals’ auspicious debut
Iwatani (8088 JT) et al pull back from Australian hydrogen
Nippon Sanso (4091 JT) cuts FY24 guidance on failed hydrogen project
Mitsubishi Motors (7211 JT) to outsource EV production to Foxconn
Mazda’s (7261 JT) new EV strategy: mot a long-term panacea
Suzuki (7269 JT) hikes prices in India despite weak sales
Honda (7267 JT) to buy hybrid batteries from Toyota in the US
MHI (7011 JT) and Mitsubishi Electric (6503 JT) hit listing highs
Mitsubishi Corp (8058 JT) data centre news helps Fujikura / Fujikura overly hit on Microsoft worries?
Denso (6902 JT) ADAS business update
Visional (4194 JT): time for a reappraisal?
Kakaku.com (2371 JT) announces its mid-term Plan
Timee (215A JT) surges as Recruit spot work service development ends
Mercari’s (4385 JT) labour shortage survey results – good news for Mercari Hallo
Chugai (4519 JT) shares rise on Lunsumio update
Gyre (GYRE US) updates on drug pipeline
GNI (2160 JT) Group CFO resigns
Peptidream’s (4587 JT) management update
Anicom’s (8715 JT) solid Feb KPIs
Miscellaneous / Market / Macro
Nationwide CPI +3.7% YoY in February
The Weekly Comment by Pelham Smithers
The April CPI data series was supposed to be the one that the Bank of Japan would worry about, as firms look to raise prices at the start of the fiscal year. However, the publication of the March Tokyo CPI series has proved worrying enough, as Pelham Smithers explains.
Company / Sector / Thematic Comments at a Glance
Technology: Consumer Electronics, Gaming
1. Video Games Round-Up Part 1:
2. Video Games Round-Up Part 2:
3. Bandai Namco Games Talk, Switch 2 AI Patent, Suggest Upcoming Console More Powerful Than Expected
4. Rating Japanese Video Game Stocks Ahead of the Switch 2 Reveal
5. Nintendo to Hold Switch-Oriented “Direct” Show [27 Mar]
6. Capcom’s Monster Hunter: Wilds Tops US Games Chart in February
7. CyberAgent’s Accounting Scandal Outweighs New Game Launch
8. Other News & Moves That Caught Our Eye
Technology: Industrial Electronics / Components / Semis & SPE / Precision
9. Where Interest in Tech is Focused
10. Compact Camera ASPs Hit Record High in January
11. Nidec Ramps up Production for AI Data Centre Equipment
12. Other News & Moves That Caught Our Eye
Chemicals / Materials
13. Ryobi Inaugurates New Gigacasting Facility
14. JXAM Makes an Auspicious Debut
15. Iwatani et al Pull Back from Australian Hydrogen
16. Nippon Sanso Cuts FY24 Guidance on Failed Hydrogen Project
17. Other News & Moves That Caught Our Eye
Autos / New Mobility
18. US to Impose 25% Import Tariffs on Autos
19. Auto Industry / Government Consider Their Options Regarding US Tariffs
20. Feb European Auto Sales Down -3.1% YoY on Weak Demand for Petrol Cars
21. Suzuki Hikes Prices in India Despite Weak Sales
22. Honda to Buy Hybrid Batteries from Toyota in the US
23. Mazda’s New EV Strategy: Not a Long-term Panacea
24. Mitsubishi Motors to Outsource EV Production to Foxconn
25. Other News & Moves That Caught Our Eye
Auto Parts / Machinery / Capital Goods
26. MHI and Mitsubishi Electric Hit Listing Highs
27. Mitsubishi Data Centre News Helps Fujikura
28. Fujikura Overly Hit on Microsoft Worries?
29. Denso ADAS Business Update
30. Other News & Moves That Caught Our Eye
Internet / eCommerce
31. Mercari’s Labour Shortage Survey Results – Good News for Mercari Hallo
32. Timee Shares Surge as Recruit to Discontinue its Spot Work Service
33. Kakaku.com Announces Its Mid-term Plan
34. Other News & Moves That Caught Our Eye
Enterprise Software / IT Services
35. Visional: Time for a Reappraisal?
36. Digital Invoicing Survey Suggests Still Some Way to Go Until Full Adoption
37. Other News & Moves That Caught Our Eye
Pharma / Healthcare
38. Pharma Round-Up
39. Gyre Updates on Drug Pipeline
40. Chugai Gains on Lunsumio Update
41. GNI Group CFO Resigns
42. PeptiDream’s Management Update
43. Other News & Moves That Caught Our Eye
Small- / Mid-Cap Insights
44. February Tourism Figures Released
45. Anicom – Solid Feb KPIs
46. Other News & Moves That Caught Our Eye
Miscellaneous / Market / Strategy / Macro
47. Feb Nationwide CPI Rises +3.7% YoY
48. Climate Change Back in the News Amid High Temperatures, Forest Fires, Early Cherry Blossom
49. Other News & Moves That Caught Our Eye
PSA Company Visits, Tours and Interviews
Visited: Zensho Holdings (7550 JT), Shin-Etsu Chemical (4063 JT), Tokyo Ohka Holdings (4186 JT), Resonac (4004 JT)
Presentations at: Mitsubishi Gas Chemical (4182 JT), Denso (6902 JT)
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