The Must Read PSA Weekly Research Round-up (week to 10 October)
Reports / Flash Notes Summaries
1. Takaichi’s Suprise Win – Is This Really “Pin Your Ears Back” Time for the Nikkei 225?
The Japanese stock market’s take on the surprise victory of Sanae Takaichi in the LDP Presidential race suggested that it wasn’t so much a repeat of the “Koizumi Boom” from 20 years ago, but rather a brand new “Takaichi Boom”, and we saw the Nikkei 225 jump +4.8% to just under 48,000. Pelham Smithers compares and contrasts the impact and flags “Takaichi Stocks”. Importantly, market valuations suggest further upside.
2. Square Enix (9684 JT): Can Remakes Get it Through to KH4, FFXVII?
Pelham Smithers discusses the video game line-up for Square Enix and reviews the potential and/or risks that remakes can make to earnings – and the firm’s reputation, if not done well.
3. Timee (215A JT) – A Revisit
The share price of Timee has fallen by over -34% since its FY25 (Oct yr-end) Q3 earnings release aftermarket on 11 Sep. In this report, Thao Nguyen reviews recent developments and provides revised forecasts while keeping her positive stance on the company’s prospects unchanged.
Macro / Market / Misc.
Is this really “pin your ears back” time for the Nikkei 225?
Odds on Takaichi being PM deteriorate sharply
Komeito splits from LDP
Wage data a reminder of Japan’s cost of living issue
Company News / Insights
Devs discussing Alien: Isolation – just random, or evidence sequel getting close?
Can remakes get SQE through to Kingdom Hearts 4, FFXVII?
Nvidia tie-up boosts Yaskawa
Fujikura hits new high as TPs rise
Air Water shares sink on accounting anomalies
Hino to become Archion as merger synergies revealed
A strong day for Cover Corp
Timee: an update
Sansan FY25 Q1 preview / results
Money Forward: FY25 Q3 preview
BayCurrent FY25 Q2 preview
Treasure Factory reports solid Sep KPIs / FY25 Q2 results
Koshidaka FY25 results
Industry Insights
Video games round-up
Japan’s AI / DC list as AI Robotics moves closer to reality
US domestic auto production credit system review
Truck makers face US import tariff uncertainty
The Weekly Comment by William Nestuk
PSA’s automation and robotics analyst William Nestuk reviews the performance of automation stocks this year and explains why this month, AI has lit a touchpaper to strong performance by names in the sector
Company / Sector / Thematic Comments at a Glance
Technology: Consumer Electronics, Gaming
1. Video Games Round-Up
2. Can Remakes Get Square Enix Through to Kingdom Hearts 4, Final Fantasy XVII?
3. Devs Discussing Alien: Isolation – Just Random or Evidence Sequel Getting Close?
Technology: Industrial Electronics / Components / Semis & SPE / Precision
4. Japan’s AI / DC List as AI Robotics Moves Closer to Reality
5. Nvidia Tie-Up Boosts Yaskawa
6. Other News & Moves That Caught Our Eye
Chemicals / Materials
7. Air Water Shares Sink on Accounting Anomalies
8. Other News & Moves That Caught Our Eye
Autos / New Mobility
9. US Domestic Auto Production Credit System Could Be Extended
10. Truck Makers Face US Import Tariff Uncertainty
11. Hino to Become Archion – Merger Synergies Revealed
12. Other News & Moves That Caught Our Eye
Capital Goods / Machinery / Auto Parts
13. Toyota Industries Tender Offer Delay
14. Fujikura New High as Targets Rise
15. Other News & Moves That Caught Our Eye
Internet / eCommerce
16. A Strong Day for Cover Corp
17. Timee: An Update
Enterprise Software / IT Services
18. Sansan FY25 Q1 Preview / Results
19. BayCurrent FY25 Q2 Preview
20. Money Forward: FY25 Q3 Preview
Small- / Mid-Cap Insights
21. Treasure Factory: September KPIs / FY25 Q2 Results
22. Koshidaka FY25 Results
Macro / Market / Strategy / Misc.
23. Is This Really “Pin Your Ears Back” Time for the Nikkei 225?
24. Odds Deteriorate Sharply on Takaichi Being PM
25. Komeito Splits from LDP 4
26. Wage Data a Reminder of Japan’s Cost of Living Issue
27. Other News & Moves That Caught Our Eye
PSA in the Press
Strategist Pelham Smithers features in the following article:
1. Takaichi Win Jolts Yen and Japanese Bonds, Triggers Stock Surge – Bloomberg [6 Oct]
Excerpt: “The bond market will want to see that Takaichi’s pro-growth strategies don’t widen the public sector deficit,” which would also likely encourage yen selling, said Pelham Smithers, managing director at UK-based Japan equity research firm Pelham Smithers Associates. “However, yen bulls may point to the BOJ’s increased likelihood of offsetting any increased fiscal stimulus with more aggressive monetary tightening.”
2. Japan’s Defense, Tech Stocks Climb as ‘Takaichi Trade’ Reignites – Bloomberg [7Oct]
Excerpt: “Economic security is something of a mantra for Takaichi,” which is good news for defense and tech shares, said Pelham Smithers, managing director at UK-based Japan equity research firm Pelham Smithers Associates Ltd. She will likely focus on loosening rules around defense equipment production and sales, boosting weapons makers’ stocks, he added.
Capital Goods analyst William Nestuk features in the following article:
3. Yaskawa Electric Shares Jump After Strong 2Q Orders: Street Wrap – Bloomberg [6 Oct]
Excerpt: The second quarter operating profits were “encouraging” because they’ve improved from the weak first quarter operating profits. The A/C servos improved from an increase in electronics and semiconductor demand in Japan. Most of the order strength has come from Japan, where second quarter orders were “far stronger than any other region”
PSA Company Visits, Tours and Interviews
1-1 Call with: Intermestic (262A JT), Koshidaka Holdings (2157 JT)
Presentations at: Treasure Factory (3093 JT), Mitsui Kinzoku (5706 JT), Sansan (4443 JT)
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