Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

In last week's Compass we highlighted what we view as compelling signals that risk appetites are improving, which is bullish for the broad market. The trend of improving risk appetites has only continued over the past week and we are moving toward an outright bullish outlook.

In last week's Compass we highlighted what we view as compelling signals that risk appetites are improving, which is bullish for the broad market. The trend of improving risk appetites has only continued over the past week and we are moving toward an outright bullish outlook.

U.S. Equity Strategy: Small-Caps Re-Emerging As Leadership

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

Honda reported its 4QFY21 results last Friday with revenue of ¥3,624bn (-2.3% QoQ, +4.8% YoY) and operating profit of ¥213bn (for an OPM of 5.9% compared to the OPM of -0.2% and 7.5% respectively in 4QFY20 and 3QFY21).4Q reported revenue was 4.9% higher than consensus estimates, while operating profit beat by ¥122bn (+135%). Guidance was more muted with Honda guiding 24% below consensus despite revenue guidance being 3.7% stronger.<table class="table table-striped"><tbody>
<tr>
<td style="width: 35.12%;">In ¥bn</td>
<td style="width: 23.66%;">Revenue </td>
<td style="width: 21.7%;">OP</td>
<td style="width: 19.52%;">OPM</td>
</tr>
<tr>
<td style="width: 35.12%;">Actual Results - 4QFY21</td>
<td style="width: 23.66%;">3,624</td>
<td style="width: 21.7%;">213</td>
<td style="width: 19.52%;">5.9%</td>
</tr>
<tr>
<td style="width: 35.12%;">Consensus - 4QFY21</td>
<td style="width: 23.66%;">3,453</td>
<td style="width: 21.7%;">91</td>
<td style="width: 19.52%;">2.6%</td>
</tr>
<tr>
<td style="width: 35.12%;">Surprise</td>
<td style="width: 23.66%;">4.9%</td>
<td style="width: 21.7%;">134.6%</td>
<td style="width: 19.52%;">3.3%</td>
</tr>
<tr>
<td style="width: 35.12%;"> </td>
<td style="width: 23.66%;"> </td>
<td style="width: 21.7%;"> </td>
<td style="width: 19.52%;"> </td>
</tr>
<tr>
<td style="width: 35.12%;">Guidance - FY22</td>
<td style="width: 23.66%;">15,200</td>
<td style="width: 21.7%;">660</td>
<td style="width: 19.52%;">4.3%</td>
</tr>
<tr>
<td style="width: 35.12%;">Consensus - FY22</td>
<td style="width: 23.66%;">14,664</td>
<td style="width: 21.7%;">869</td>
<td style="width: 19.52%;">5.9%</td>
</tr>
<tr>
<td style="width: 35.12%;">Difference</td>
<td style="width: 23.66%;">3.7%</td>
<td style="width: 21.7%;">-24.0%</td>
<td style="width: 19.52%;">-1.6%</td>
</tr>
</tbody></table><div style="text-align: left;" class="content-caption">Source: Company disclosures, CapIQ</div>

Honda reported its 4QFY21 results last Friday with revenue of ¥3,624bn (-2.3% QoQ, +4.8% YoY) and operating profit of ¥213bn (for an OPM of 5.9% compared to the OPM of -0.2% and 7.5% respectively in 4QFY20 and 3QFY21).4Q reported revenue was 4.9% higher than consensus estimates, while operating profit beat by ¥122bn (+135%). Guidance was more muted with Honda guiding 24% below consensus despite revenue guidance being 3.7% stronger.

In ¥bn
Revenue 
OP
OPM


Actual Results - 4QFY21
3,624
213
5.9%


Consensus - 4QFY21
3,453
91
2.6%


Surprise
4.9%
134.6%
3.3%


 
 
 
 


Guidance - FY22
15,200
660
4.3%


Consensus - FY22
14,664
869
5.9%


Difference
3.7%
-24.0%
-1.6%

Source: Company disclosures, CapIQ

Honda – Margin Guidance Is Conservative but Credit Provisions Could Still Drive a YoY Decline

Major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) continue to hold above critical support levels and market dynamics remain largely positive. Until this changes, we believe global equities are headed higher in the coming weeks and months. Additionally, we are reiterating our overweight recommendations on small-caps and value as we believe outperformance from these areas is likely to continue.

Major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) continue to hold above critical support levels and market dynamics remain largely positive. Until this changes, we believe global equities are headed higher in the coming weeks and months. Additionally, we are reiterating our overweight recommendations on small-caps and value as we believe outperformance from these areas is likely to continue.

Global Equity Strategy: Small-Caps and Value Stocks Remain in Focus

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Thematic (Sector/Industry)

After Japan's earthquake automobile makers had a lot to worry about, since they were already faced with critical semiconductor shortages.  Now unusually bad weather has hit much of the US, and has stopped chip production in three important fabs in Austin, Texas.  This Insight explores the winners and losers in this series of events.

After Japan's earthquake automobile makers had a lot to worry about, since they were already faced with critical semiconductor shortages.  Now unusually bad weather has hit much of the US, and has stopped chip production in three important fabs in Austin, Texas.  This Insight explores the winners and losers in this series of events.

Texas Weather Deals Second Blow to Automotive Chip Supply Chain

Saturday's 7.1 earthquake in Japan could have caused important supply disruptions for semiconductors.  We reached out to over a dozen companies to check their status, and those who replied indicated that there was little impact.  Still, the automotive sector has reason to be nervous.

Saturday's 7.1 earthquake in Japan could have caused important supply disruptions for semiconductors.  We reached out to over a dozen companies to check their status, and those who replied indicated that there was little impact.  Still, the automotive sector has reason to be nervous.

Japan Quake and Chip Shortages, Tough on Auto?

Japan

Honda Motor Co., Ltd. develops, manufactures, and distributes motorcycles, automobiles, and power products such as generators and farm machinery. The Company also operates a financial credit business. Honda Motor has manufacturing facilities in the US, Canada, the UK, France, Italy, Spain, Brazil, Mexico, India, and Thailand.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Honda Motor (7267 JP)

U.S. Equity Strategy: Small-Caps Re-Emerging As Leadership

We continue to see compelling signals that suggest risk appetites are improving, which is bullish for the broad market. As a result, we are moving...

Vermilion Research

Honda – Margin Guidance Is Conservative but Credit Provisions Could Still Drive a YoY Decline

Honda's automotive business continues to meander but the motorcycle business remains strong and is supporting profitability.

Mio Kato

Global Equity Strategy: Small-Caps and Value Stocks Remain in Focus

We are reiterating our overweight recommendations on small-caps and value as we believe outperformance from these areas is likely to continue.

Vermilion Research

Texas Weather Deals Second Blow to Automotive Chip Supply Chain

A chip shortage is preventing the automotive industry from returning to full volume. Meanwhile Japan's earthquake and bad weather in Texas are...

Jim Handy

Japan Quake and Chip Shortages, Tough on Auto?

Will Saturday's Japan earthquake further disrupt the semiconductor supply chain? Early reports seem tame enough, but automobile manufacturers are...

Jim Handy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)