The Must Read PSA Weekly Research Round-up (week to 30 Nov)

Reports out this week: Apple Production / Fanuc (6954 JT) – FY18 Outlook / Subaru (7270 JT) – Potential upside, with N America key to Recovery / BIG PICTURE: All-round pain for polysilicon contracts / Import tariffs remain the focus point of trade talks / Facial recognition use in the retail industry for cashier-less stores / COMPANY INSIGHTS: Views on Nissan and the alliance post Ghosn / Has Nintendo (7974 JT) Switch fallen out of favour? / Showa Denko (4004 JT) looking for new growth opportunities / Daikin (6367 JT) diversifying into refrigeration / NTT Data enters the Indian electronic payments market / Asian demand for Fanuc (6954 JT)may weaken sharply from Q3

The Weekly Comment by Pelham Smithers

Can Panasonic Prove the Market Wrong?
The past twelve months have been pretty ghastly for Panasonic (6752 JT) stock. Having hit a high ¥1,772 on Nov 1, 2017, its shares slid to ¥1,102 earlier this month before rebounding 5% in the recent market rally and have ended this week at ¥1,164.5. Such a sell-off is not unheard of for Panasonic. Not only was there a similar sell-off in 2015~16, but you can go back to 1982 and find a similar sell-off then. Indeed, we’ve counted 17 times when Panasonic’s shares have closed a month below ¥1,500, having started the month above that

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

1. Apple Production
2. Fanuc (6954 JT) – FY18 Outlook
3. Upside Potential for Subaru (7270 JT): North America Key to Recovery

Company / Sector / Thematic Comments at a Glance

Technology: Consumer Electronics / Gaming / Precision

1. GameSpot (GME US) Hints at Weak Holiday Season
2. Nintendo (7974 JT): Switch Not Such a Dud (Part 2)
3. Sony (6758 JT) to Keep Mobile for Another Three Years?
4. Olympus (7733 JT) Still Under the Microscope

Chemicals / Materials

5. Hitachi Chemical (4217 JT): Waiting Now for a Downward Revision
6. Fujifilm (4901 JT) and Xerox (XRX US) Might Be Talking to One Another
7. Sumitomo Dainippon Pharma (4506 JT) Steps Back from the Cliff
8. Pain to Cancel Polysilicon Contracts, But Limited Share Price Reaction
9. Showa Denko (4004 JT) Looks for New Growth Opportunities
10. Sumco’s (3436 JT) Future May be Rosier Than Its Shares Imply

Autos

11. Nissan (7201 JT) and MMC (7211 JT): Shares Continue to Recover Following Ghosn Shock
12. Thoughts on Nissan (7201 JT)
13. Implications of General Motors’ (GM US) Restructuring Positive for Toyota (7203 JT) and Honda (7267 JT)
14. Automakers Under Pressure on Rumours Over Import Tariffs

Auto Parts / Machinery

15. Daikin (6367 JT) Makes Acquisition to Enter High OPM Refrigerated Showcases

Internet /eCommerce

16. LINE (3938 JT): Accounting Software for SMEs / Partners with WeChat / Banking
17. CyberAgent (4751 JT), ZOZO (3092 JT) and Mercari (4385 JT) Bouncing
18. Fast Retailing (9983 JT) Measures Up Against ZOZO (3092 JT)
19. Recruitment Stocks Surge on Optimism about Japan’s Foreign Worker Bill

Enterprise Software

20. TIS Inc (3626 JT) Moves into Virtual Power Plants
21. NTT Data (9613 JT) Dips its Little Toe into the Indian Electronic Payments Market
22. AI Station Patrol Robots Head for the Olympics
23. Automating Retail: NEC (6701 JT) and Seven & i (3382 JT) Test the Waters

Strategy

24. Return to Goldilocks
25. Market Rebound Continues into Week, Month Close

PSA in the Press

Last week, PSA’s autos analyst Julie Boote was interviewed by the Wall Street Journal, Bloomberg TV and Sky News with Ian King, regarding the arrest of Carlos Ghosn and implications for the alliance. This week she was also interviewed by S&P Global Market Intelligence: https://platform.mi.spglobal.com/web/client?auth=inherit#news/article?id=48463252&cdid=A-48463252-12078

PSA Company Visits, Tours and Interviews

• Interviewed / Conference Call with Daikin (6367 JT), Ichikoh (7244 JT), Daifuku (6383 JT), Akebono Brake (7238 JT), Hoshizaki (6465 JT)
• Visited Sumco (3436 JT), Showa Denko (4004 JT), Mitsui Chemicals (4183 JT)

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