The Must Read PSA Weekly Research Round-up (week to DD MMM)

REPORTS: MURATA (6981 JT): Is the premium justified? / INDUSTRY INSIGHTS: We discuss whether Japan pharma losing its appeal / The US gives automakers headaches / MACRO: Is Japan heading back into recession? COMPANY INSIGHTS: Sony buyback and ties up with MSFT for cloud gaming / Sprint/T-Mobile consider concessions / Hitachi considering spinning of more of its listed subsidiaries /
PREVIEWS/RESULTS: Square Enix has a decent Q4; Weak outlook from Isuzu for FY19; Trend Micro has an uninspiring FY19 Q1; Mixi’s Monster Strike is losing its magic; TIS outlook is conservative, as per usual; Strong Q1 from Cybozu and Persol Holdings, while IIJ struggling with MNVO charges

The Weekly Comment by Pelham Smithers

What Now for Japan’s Banking Industry?
Given the lack of revenues in Japan’s banking industry, Pelham Smithers concludes that the industry needs to strip out and rebuild its IT system from the bottom up if it is to survive, with a read across to enterprise software firm TIS (3626 JT).

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

1. Murata (6981 JT): Is a Premium Justified?

Company / Sector / Thematic Comments at a Glance

Technology: Consumer Electronics / Gaming

1. Sony (6758 JT) Announces a Buyback
2. Sony (6758 JT) and Microsoft (MSFT US) in Cloud Gaming Move
3. Square Enix (9684 JT): Decent 4Q Effort But…

Technology: Electronic Components and Precision

4. Hitachi (6501 JT) May Spin Off Listed Companies
5. Implications of Huawei’s Equipment Ban in the US

Chemicals / Materials

6. Brief Results Comments and Market Reactions

Autos

7. Nissan (7201 JT) in a State of Emergency, Cuts Dividend
8. Isuzu (7202 JT) Predicts Weak Growth, Rising Expenses
9. Bridgestone (5108 JT): FY19 Q1 Profits down on Rising Costs, Weak Sales
10. US Give Automakers Headaches

Auto Parts / Machinery

11. Daifuku (6383 JT): Story Shifts to FY20 / Puff Piece in Nikkei
12. Fujikura (5803 JT): FY19 Guidance Challenging
13. No Visibility say SMC (6273 JT
14. Heavies Defy Gravity on May 14

Telecom

15. Uber’s (UBER US) Price on SoftBank’s (9984 JT) Performance
16. Sprint (S US) / T-Mobile (TMUS US) Consider Concessions

Internet / eCommerce

17. istyle (3660 JT) Outlook More Certain
18. Recruit (6098 JT): FY18 Results Beat Guidance
19. Trend Micro (4704 JT): An Uninspiring FY19 Q1
20. Digital Garage (4819 JT) Launches Cloud Pay
21. Kakaku.com’s (2371 JT): Steady Progress but Unattractive Valuations
22. Mixi (2121 JT) Collapses as Monster Strike Loses Its Magic
23. GungHo Online Entertainment (3765 JT): YTD Shares +70% Yet FY21 Outlook Calls for Consecutive YoY Falls

Enterprise Software

24. Cybozu (4776 JT): Shares Rally on Q1 Results
25. IIJ (3774 JT) FY18 Hit by Higher-than-Expected MVNO Interconnectivity Charges
26. TIS Inc (3626 JT): Slow Growth Outlook
27. Persol Holdings (2181 JT): Robust Q4, Dividend Hike but Uninspiring FY19 CE

Pharma

28. Is Japan Pharma Losing its Appeal?

Macro

29. Is Japan Heading Back into Recession?

PSA Company Visits, Tours and Interviews

• Visited: Dexerials (4980 JT), GMO Payment Gateway (3769 JT)
• Attended earnings meetings / participated in earnings calls at: Toray (3402 JT), Sumitomo Bakelite (4203 JT), Mitsubishi Chemical Holdings (4188 JT), Ube Industries (4208 JT), Mitsui Chemicals (4183 JT), Kaneka (4118 JT), Japan Display (6740 JT), Sumitomo Chemical (4005 JT), Nissan Chemical (4021 JT), Tosoh (4042 JT), Fujimi (5384 JT), Noritake (5331 JT), Obara Group (6877 JT), Mitsui Mining and Smelting (5706 JT), Tocalo (3433 JT), Harmonic Drive (6324 JT), Daifuku (6383 JT), NOK (7240 JT), Fujikura (5803 JT), SMC (6273 JT), Nissan (7201 JT), GMO Payment Gateway (3769 JT) Fujimi (5384 JT), TIS (3626 JT), Cybozu (4776 JT), NTT Data (9613 JT), NRI (4307 JT)
• Telephone call to Toyota Industries (6201 JT), Yokohama Rubber (5101 JT)
• Attended strategy / mid-term plan announcement meetings at: JSR (4185 JT), Kaneka (4118 JT)

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