The Must Read PSA Weekly Research Round-up (week to 29 Mar)

REPORTS: Istyle (3660 JT): Opportunities Abound / Why Investors Need to be Looking at Nintendo (7974 JT) Stock Right Now / Hitachi Chemical (4217 JT) Aims to Get Back on Track / MACRO/MARKET: What net for Japanese equities? / Another round of “glass not quite half full” economic data / Are there cost control issues at Japan’s high fliers? / INDUSTRY INSIGHTS: Is solar on the mend? / Camera market looking grim / The rare disease conundrum / Saturated SAP markets / An update on Casino regulations / Wafer markets looking for growth in 2019 / COMPANY INSIGHTS: Fab figures for Cybozu (4776 JT) in Feb / Honda and Hino join Toyota’s mobility service JV / KDDi to launch 5G in the Autumn; interestingly, its focus is on non-traditional mobile services / Nexon (3659 JT) uses AI in live-game operations / Sony reorganises its CE divisions and Hirai to retire / Nabtesco (6268 JT) and Sumitomo Heavy (6302 JT) stand out as winners in hydraulics / AZN buys into DSK’s DS-8201

The Weekly Comment by Julie Boote

Renault-Nissan-Fiat Chrysler: A Match Made in Hell?

The Financial Times reported that Renault (RNO FP) was planning to restart merger talks with Nissan (7201 JT) this year and that another merger, possibly with Fiat Chrysler (FCAU US), was on the cards. All interested parties have so far denied any knowledge of these plans, supposedly devised by former Chairman Carlos Ghosn, but we nevertheless believe the story to be true. There are two reasons why we think that such a double merger is a very bad idea indeed. First, Nissan and Renault need to put their house in order, so a huge distraction in the form of merger talks at this point in time would be counterproductive, in our view: In the aftermath of the Carlos Ghosn affair, clear corporate culture failings need to be addressed; management needs to be reorganised, while the structure and workings of the alliance need revisiting………

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

1. istyle (3660 JT): Opportunities Abound
2. Why Investors Need to be Looking at Nintendo (7974 JT) Stock Right Now
3. Hitachi Chemical (4217 JT) Aims to Get Back on Track

Company / Sector / Thematic Comments at a Glance

Technology: Consumer Electronics / Gaming

1. Sony (6758 JT) Announces CE Divisional Reorganization / Hirai Retires as Chairman
2. Nintendo (7974 JT): VR Labo Launch and Hints of Two New Switch Consoles
3. Casino Regulations Generally as Telegraphed
4. Camera Market Starts Year in Poor Shape

Technology: Solar

5. Is Solar on the Mend?

Chemicals / Materials

6. Wafer Makers Hope for Some Growth in 2019
7. Saturated SAP Markets
8. Central Glass (4044 JT) Shares Fall after Small Upward Revision

Autos

9. Honda (7267 JT) and Hino (7205 JT) Join Toyota’s Mobility Service Joint Venture
10. Mitsubishi Motors (7211 JT) to Develop New Pick-up Platform for Alliance

Auto Parts / Machinery

11. Nabtesco (6268 JT) and SHI (6302 JT) Relative Winners in Hydraulic

Telecom

12. Telco Sector Outlook
13. KDDi (9433 JT) to Launch 5G in Autumn

Internet / eCommerce

14. ZOZO (3092 JT) to Receive a ¥15bil Loan
15. LINE (3938 JT) and Mercari (4385 JT) Form Mobile Payment Alliance
16. Nexon (3659 JT) Uses AI in Live-game Operations

Enterprise Software

17. February Marks Another Strong Month for Cybozu (4776 JT)
18. Oracle Japan (4716 JT): Steady as She Goes

Pharmaceutical

19. The Rare Disease Conundrum
20. Bad News for Eisai (4523 JT), Shionogi (4507 JT): Implications for Sector Values
21. AZN Buys into DSK’s (4568 JT) DS-8201

Macro / Market / Miscellaneous

22. Another Round of “Glass Not Quite Half Full” Economic Data
23. What Next for Japanese Equities?
24. Are There Cost-Control Issues at Japan’s High Fliers?

PSA Company Visits, Tours and Interviews

• Contacted / Interviewed: Sumitomo Chemical (4005 JT), Daifuku (6383 JT), Nabtesco (6268 JT), Outsourcing (2427 JT), TIS (3626 JT)

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