The Must Read PSA Weekly Research Round-up (week to 28 Sep)

Highlights this week: BIG PICTURE: Spotlight back on EV and LiBs / NAND / DRAM prices continue to fall / Trade talks / Suga going after Pachinko / A slew of positive macro data / COMPANY INSIGHTS: Pelham Smithers discusses the impact of Sony conceding on cross play for Fortnite / Mura’s new MLCC factory is seen as a positive step in supplying high-capacitance MLCCs for xEV industry / Softbank (9984 JP) – Japan’s new internet darling / Thao Nguyen notes Recruit (6098 JP) continues to benefit from Japan’s tight labour market

The Weekly Comment by Pelham Smithers

10 Stocks for the Fourth Quarter (and Beyond)
Is it time to sell Sony? This question has arisen as a result of Sony’s capitulation over cross-play for Fortnite. At a basic level, the answer is “No”. The company is on course to hit ¥1tril in OP in the next 3~5 years, which means that a ¥10,000 share price target is not out of the question. However, it is fair to say that the arguments in favour of the stock are well known and the shares have done very well. Sell-side investors and analysts alike have looked through the dour mid-term target report and seen a company doing well on a number of fronts. The stock has momentum and is probably front stage for day-traders. It is not so easy a call for longer-term players, however, for whom the risk / reward ratio has been shifting considerably over the past eighteen months.
At this point, it would not be surprising for Sony to produce strong 2Q numbers on October 31 and for the shares to subsequently come under profit-taking. What would happen if Sony were to disappoint?

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

1. Daikin (6367 JP): FY19 Cooling Off

Company / Sector / Thematic Comments at a Glance

Technology: Consumer Electronics, Electronic Components, Gaming

1. Sony’s (6758 JP) Yoshida Goes to Hollywood; Sony Concedes on Fortnite
2. Murata (6981 JP) in MLCC Fab Construction Move
3. Japan Takes Top 3 in Inaugural Capcom (9697 JP) Pro Tour Event in Japan
4. Suga Going After Pachinko?
5. Panasonic (6752 JP) & Musk

Technology: Industrial Electronics / SPE

6. NAND, DRAM Prices Continue to Slide
7. Hitachi (6501 JP) Exits TV Manufacturing

Chemicals / Materials

8. Spotlight Back on EVs and LiBs
9. Fujifilm (4901 JP) Progressing in iPS Cell Therapies / Healthcare Business Mostly Positive
10. Teijin (3401 JP) and Kyorin (4569 JP) Finally Part Ways

Auto Parts / Machinery

11. Daikin (6367 JP) Maintains ¥15,000
12. China August Machine Tool Orders Slump 37%
13. Ichikoh (7244 JP) Bouncing Back
14. Are Slowing Sales at Misumi (9962 JP) Indicative of Weakening Japanese FA or Increased Competition?
15. CyberAgent (4751 JP) Keeps Rolling
16. Recruit (6098 JP) Continues to Benefit from Japan’s Tight Labour Market


17. SoftBank (9984 JP): Japan’s New Internet Darling

Macro / Miscellaneous

18. Economic Data Releases Point to Recovering Economy, Inflation Picking Up
19. Trade-Talks

PSA Company Visits, Tours and Interviews

Attended information meeting at Konica Minolta (4902 JP)
Phone interviews with Japan Display (6740 JP), Fujifilm Holdings (4901 JP), Teijin (3401 JP)
Company meetings with Toyota (7203 JP), Mazda (7261 JP), Honda (7267 JP), Yamaha (7272 JP), Suzuki (7269 JP), Foster Electric (6794 JP), Mitsubishi Motors (7211 JP), Subaru (7270 JP), Isuzu (7202 JP), Renesas (6723 JP), Hino Motors (7205 JP), Akebono Brake (7238 JP), Clarion (6796 JP)

PSA in the Press

PSA’s technology analyst Pelham Smithers discusses the latest iPhone roll-out: 

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