Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" data-smartkarma-citation="entities:7797:1" rel="noopener">Hitachi Ltd (6501 JP)</a> has, for over a decade, been restructuring itself - selling subsidiaries here and buying them in there. There are two remaining after the recent sale of <a href="https://www.smartkarma.com/entities/hitachi-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:14457:1" rel="noopener">Hitachi Chemical (4217 JP)</a>, de-consolidation of <a href="https://www.smartkarma.com/entities/hitachi-capital-corp" target="_blank" data-smartkarma-citation="entities:14410:1" rel="noopener">Hitachi Capital (8586 JP)</a>, and buy-in of <a href="https://www.smartkarma.com/entities/hitachi-high-tech-corporation" target="_blank" data-smartkarma-citation="entities:7046:1" rel="noopener">Hitachi High-Tech (8036 JP)</a>. The earnings call in May occasioned another presentation - that of the update on <a href="http://www.hitachi.com/New/cnews/month/2020/05/200529a.html" target="_blank" rel="noopener">Progress of the Mid-Term Management Plan</a> (with a webcast and a <a href="http://www.hitachi.com/New/cnews/month/2020/05/200529a/f_200529apre.pdf" target="_blank" rel="noopener">presentation deck</a>), where the CEO responded to a question thusly:<div><blockquote>
QUESTION:  Next question is regarding the, against the backdrop of COVID-19, is this going to have an impact on the reorganisation of the listed subsidiaries?
ANSWER BY CEO HIGASHIHARA:  Regarding the listed subsidiary answer. Hitachi Construction Machinery and Hitachi Metals remain. And what we are telling the top management is that, in the time frame of fiscal year 2021 to 2024, we have to make sure these companies are able to compete globally. They are now evaluating this. It is not just a matter of COVID-19. Mid- to long-term growth strategy will be emphasised so the reorganisation strategy for the listed subsidiaries will not be impacted by COVID-19.
</blockquote></div><div>
FY 2021 to FY 2024 is a three year window starting next April, with FY2021 ending in March 2022 and FY2024 ending in March 2025.
<div>
That was May 29, less than five months ago and the situation was discussed in <a href="https://www.smartkarma.com/insights/hitachi-s-capital-case-liquidating-land-policy-holdings-what-about-the-subs" target="_blank" data-smartkarma-citation="insights:39920" rel="noopener">Hitachi's Capital Case - Liquidating Land &amp; Policy Holdings? What About the Subs?</a>.
Friday saw an article out of the Nikkei suggesting Hitachi might sell half its stake in <a href="https://www.smartkarma.com/entities/hitachi-construction-machinery" target="_blank" data-smartkarma-citation="entities:19433:1" rel="noopener">Hitachi Construction Machinery (6305 JP)</a> ("HCM") to a third party, at a discount, and that it might start a sale process on <a href="https://www.smartkarma.com/entities/hitachi-metals-ltd" target="_blank" data-smartkarma-citation="entities:8561:1" rel="noopener">Hitachi Metals (5486 JP)</a> "this month."
</div>
<div>
It strikes me as unlikely Hitachi would themselves be throwing in the towel 5 months later before the start of the time frame in which top management of the two subsidiaries are supposed to be able to compete globally. All of this is likely getting done with the will and direction of the subsidiaries themselves. This strikes me as some kind of agreement with management of HCM that they would not be averse to receiving expert help from outside while remaining listed. 
This changes things.
Hitachi becomes a different animal. It becomes a non-stub trade (parent vs significant value of listed short-able subs) for the first time in a very long time. And the optics change quite a bit.
</div>
</div>

Hitachi Ltd (6501 JP) has, for over a decade, been restructuring itself - selling subsidiaries here and buying them in there. There are two remaining after the recent sale of Hitachi Chemical (4217 JP), de-consolidation of Hitachi Capital (8586 JP), and buy-in of Hitachi High-Tech (8036 JP). The earnings call in May occasioned another presentation - that of the update on Progress of the Mid-Term Management Plan (with a webcast and a presentation deck), where the CEO responded to a question thusly:
QUESTION:  Next question is regarding the, against the backdrop of COVID-19, is this going to have an impact on the reorganisation of the listed subsidiaries?
ANSWER BY CEO HIGASHIHARA:  Regarding the listed subsidiary answer. Hitachi Construction Machinery and Hitachi Metals remain. And what we are telling the top management is that, in the time frame of fiscal year 2021 to 2024, we have to make sure these companies are able to compete globally. They are now evaluating this. It is not just a matter of COVID-19. Mid- to long-term growth strategy will be emphasised so the reorganisation strategy for the listed subsidiaries will not be impacted by COVID-19.

FY 2021 to FY 2024 is a three year window starting next April, with FY2021 ending in March 2022 and FY2024 ending in March 2025.

That was May 29, less than five months ago and the situation was discussed in Hitachi's Capital Case - Liquidating Land &amp; Policy Holdings? What About the Subs?.
Friday saw an article out of the Nikkei suggesting Hitachi might sell half its stake in Hitachi Construction Machinery (6305 JP) ("HCM") to a third party, at a discount, and that it might start a sale process on Hitachi Metals (5486 JP) "this month."


It strikes me as unlikely Hitachi would themselves be throwing in the towel 5 months later before the start of the time frame in which top management of the two subsidiaries are supposed to be able to compete globally. All of this is likely getting done with the will and direction of the subsidiaries themselves. This strikes me as some kind of agreement with management of HCM that they would not be averse to receiving expert help from outside while remaining listed. 
This changes things.
Hitachi becomes a different animal. It becomes a non-stub trade (parent vs significant value of listed short-able subs) for the first time in a very long time. And the optics change quite a bit.



'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Thematic (Sector/Industry)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/693/original/2020-09-14_09-50-37.png?1600044664" class="editor-image img-responsive" data-smartkarma-image-id="158693"></figure><div class="content-caption">Source for all charts &amp; tables except as stated: Japan Analytics</div>EQUITY-DRIVEN - Japan's aggregate Shareholders' Equity has appreciated by 45% since 2014 - an annual rate of 5.5% and has been one of the key achievements of the 'Abe era'. For the five years before 2012, Shareholders Equity was unchanged, buffeted by the 2008/9 financial crisis and the 3/11.  Although the equity market has responded well to the change in reserves, Japan's PBR has remained within a range of 1.05 to 1.38 over the last decade and is unchanged compared to 2010. In prior post-bubble 'lost' decades, the average PBR was 1.8 times. In other markets, the rise of intangible assets has called the use of Book/Price as a metric and the S&amp;P 500 PBR is now almost three times that of the Japan aggregate having bottomed at 1.78 in March 2009.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/694/original/File%202020-09-14%2010%2007%2037.jpeg?1600045681" class="editor-image img-responsive" data-smartkarma-image-id="158694"></figure><div class="content-caption">Source: multpl.com</div>BOOK VALUE PER SHARE - In this Insight, we shall look at Japan's larger-cap companies (current market value &gt;¥100 billion) through the 'lens' of book value per share. Our focus will be less on the 'winners' and 'losers' than on those companies that have seen the least change in 'BVPS' over the last seven years. Our share count excludes treasury shares which is to the benefit of companies such as <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (9432 JP)</a> which has seen a 20% reduction in Net Shares Outstanding, but only a 9% increase in Shareholders' Equity. A BVPS growth metric does, however, flatter serial issuers of equity with declining share prices, such as <a href="https://www.smartkarma.com/entities/sosei-group-corp" target="_blank" data-smartkarma-citation="entities:770:1" rel="noopener">Sosei (4565 JP)</a>.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/696/original/2020-09-14_10-26-48.png?1600046818" class="editor-image img-responsive" data-smartkarma-image-id="158696"></figure>WINNERS - As many may ask and for the record, our 'winning' thirty companies contains many of Japan's best-performing businesses and 'priciest 'stocks, such as <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" data-smartkarma-citation="entities:15441:1" rel="noopener">Monotaro (3064 JP)</a>, <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 (2413 JP)</a>, <a href="https://www.smartkarma.com/entities/gmo-payment-gateway-inc" target="_blank" data-smartkarma-citation="entities:1492:1" rel="noopener">GMO Payment Gateway (3769 JP)</a>, and <a href="https://www.smartkarma.com/entities/kobe-bussan-co-ltd" target="_blank" data-smartkarma-citation="entities:4701:1" rel="noopener">Kobe Bussan (3038 JP)</a>. Some of the more surprising entries are <a href="https://www.smartkarma.com/entities/mixi-inc" target="_blank" data-smartkarma-citation="entities:602:1" rel="noopener">mixi (2121 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyo-electric-power-co-inc" target="_blank" data-smartkarma-citation="entities:15457:1" rel="noopener">Tokyo Electric Power (9501 JP)</a>.  As an equally-weighted portfolio, this group has outperformed by 30% over one year and by 11% over the last three months.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/697/original/2020-09-14_10-33-13.png?1600047204" class="editor-image img-responsive" data-smartkarma-image-id="158697"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/698/original/2020-09-14_10-33-41.png?1600047231" class="editor-image img-responsive" data-smartkarma-image-id="158698"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/701/original/2020-09-14_10-47-56.png?1600048087" class="editor-image img-responsive" data-smartkarma-image-id="158701"></figure>LOSERS - Our list of losers, who have collectively underperformed by 9% over one year, have many of Japan's weaker business models (shipping, oil &amp; gas, paper, copiers, gaming machines. The list also features some of the less-astute management 'teams' (<a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan (7201 JP)</a>, <a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin (2503 JP)</a>, <a href="https://www.smartkarma.com/entities/lixil-group-corp" target="_blank" data-smartkarma-citation="entities:454:1" rel="noopener">Lixil (5938 JP)</a>, and <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon (8267 JP)</a>).  Also among the latter are two medical-related business - the now remained <a href="https://www.smartkarma.com/entities/h-u-group-holdings-inc" target="_blank" data-smartkarma-citation="entities:16580:1" rel="noopener">H.U. Group (4544 JP)</a> (formerly Miraca) and recent Bain PE target <a href="https://www.smartkarma.com/entities/nichii-gakkan-co" target="_blank" data-smartkarma-citation="entities:6790:1" rel="noopener">Nichii Gakkan (9792 JP)</a>.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/706/original/2020-09-14_10-57-45.png?1600048692" class="editor-image img-responsive" data-smartkarma-image-id="158706"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/158/707/original/2020-09-14_10-59-22.png?1600048774" class="editor-image img-responsive" data-smartkarma-image-id="158707"></figure>In the DETAIL section below, we all review the large companies that have seen the least change in BVPS over the last seven years and those with the lowest BVPS volatility over the same period. Our lists contain quite a few surprises.

Source for all charts &amp; tables except as stated: Japan AnalyticsEQUITY-DRIVEN - Japan's aggregate Shareholders' Equity has appreciated by 45% since 2014 - an annual rate of 5.5% and has been one of the key achievements of the 'Abe era'. For the five years before 2012, Shareholders Equity was unchanged, buffeted by the 2008/9 financial crisis and the 3/11.  Although the equity market has responded well to the change in reserves, Japan's PBR has remained within a range of 1.05 to 1.38 over the last decade and is unchanged compared to 2010. In prior post-bubble 'lost' decades, the average PBR was 1.8 times. In other markets, the rise of intangible assets has called the use of Book/Price as a metric and the S&amp;P 500 PBR is now almost three times that of the Japan aggregate having bottomed at 1.78 in March 2009.Source: multpl.comBOOK VALUE PER SHARE - In this Insight, we shall look at Japan's larger-cap companies (current market value &gt;¥100 billion) through the 'lens' of book value per share. Our focus will be less on the 'winners' and 'losers' than on those companies that have seen the least change in 'BVPS' over the last seven years. Our share count excludes treasury shares which is to the benefit of companies such as NTT (9432 JP) which has seen a 20% reduction in Net Shares Outstanding, but only a 9% increase in Shareholders' Equity. A BVPS growth metric does, however, flatter serial issuers of equity with declining share prices, such as Sosei (4565 JP).WINNERS - As many may ask and for the record, our 'winning' thirty companies contains many of Japan's best-performing businesses and 'priciest 'stocks, such as Monotaro (3064 JP), M3 (2413 JP), GMO Payment Gateway (3769 JP), and Kobe Bussan (3038 JP). Some of the more surprising entries are mixi (2121 JP) and Tokyo Electric Power (9501 JP).  As an equally-weighted portfolio, this group has outperformed by 30% over one year and by 11% over the last three months.LOSERS - Our list of losers, who have collectively underperformed by 9% over one year, have many of Japan's weaker business models (shipping, oil &amp; gas, paper, copiers, gaming machines. The list also features some of the less-astute management 'teams' (Toshiba (6502 JP), Nissan (7201 JP), Kirin (2503 JP), Lixil (5938 JP), and Aeon (8267 JP)).  Also among the latter are two medical-related business - the now remained H.U. Group (4544 JP) (formerly Miraca) and recent Bain PE target Nichii Gakkan (9792 JP).In the DETAIL section below, we all review the large companies that have seen the least change in BVPS over the last seven years and those with the lowest BVPS volatility over the same period. Our lists contain quite a few surprises.

🇯🇵 Japan • Every Shareholder Left Behind - The Book Value Per Share Metric

<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/156/777/original/83v838d83t83b815b838b97p20188dc590v2028626x80029.jpg?1599082833" class="editor-image img-responsive" data-smartkarma-image-id="156777"></figure>Source: <a href="http://www.sugayoshihide.gr.jp/" target="_blank" rel="noopener">http://www.sugayoshihide.gr.jp/</a>
</div>PM SUGA - In this Insight, we offer some thoughts on what appears to be the foregone conclusion that current Chief Cabinet Secretary and Abe's right hand for the last eight years, Suga Yoshihide, will be next leader of the Liberal Democratic Party and Prime Minister of Japan.Abe Shinzo has done well during his tenure to divide and rule of the various LPD factional interest and has sought to (over-)promote allies and acolytes often those who supported his platform of constitutional reform. Mostly due to lack of political acumen, none of these 'friends-of-Shinzo' has emerged as a potential successor. Abe most fervent opponent within the LDP, Ishiba Shigeru, has been effectively sidelined and the rules for the upcoming election will be written to exclude his power base within the local LDP chapters.   Within the Cabinet, the most charismatic figures are Deputy PM Aso Taro (79-years old- not standing) and Defense Minister Kono Taro (57 years old-possibly standing). The latter is in the former's faction, and Aso has yet to content to Kono's candidature.<div class="content-highlight">Assuming the Suga Premiership commences on September 14th, the short-run market implications are benign; however, we believe that Suga's influence and control over policymaking could have more positive longer-term implications for Japan than anything achieved under 'Abenomics'.</div>


Source: http://www.sugayoshihide.gr.jp/
PM SUGA - In this Insight, we offer some thoughts on what appears to be the foregone conclusion that current Chief Cabinet Secretary and Abe's right hand for the last eight years, Suga Yoshihide, will be next leader of the Liberal Democratic Party and Prime Minister of Japan.Abe Shinzo has done well during his tenure to divide and rule of the various LPD factional interest and has sought to (over-)promote allies and acolytes often those who supported his platform of constitutional reform. Mostly due to lack of political acumen, none of these 'friends-of-Shinzo' has emerged as a potential successor. Abe most fervent opponent within the LDP, Ishiba Shigeru, has been effectively sidelined and the rules for the upcoming election will be written to exclude his power base within the local LDP chapters.   Within the Cabinet, the most charismatic figures are Deputy PM Aso Taro (79-years old- not standing) and Defense Minister Kono Taro (57 years old-possibly standing). The latter is in the former's faction, and Aso has yet to content to Kono's candidature.Assuming the Suga Premiership commences on September 14th, the short-run market implications are benign; however, we believe that Suga's influence and control over policymaking could have more positive longer-term implications for Japan than anything achieved under 'Abenomics'.

🇯🇵 JAPAN • Some Thoughts on Suga Yoshihide as PM

•BEST &amp; WORST 13th AUGUST •The 'best' of yesterday's large-cap announcements came from <a href="https://www.smartkarma.com/entities/rakus-co-ltd" target="_blank" data-smartkarma-citation="entities:29200:1" rel="noopener">Rakus (3923 JP)</a>, the 'worst' from <a href="https://www.smartkarma.com/entities/asics-corp" target="_blank" data-smartkarma-citation="entities:16287:1" rel="noopener">ASICS Corp (7936 JP)</a>.  More extensive coverage follows in the DETAIL section below.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/152/408/original/2020-08-14_05-05-16.png?1597349134" class="editor-image img-responsive" data-smartkarma-image-id="152408"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/152/409/original/2020-08-14_05-05-59.png?1597349190" class="editor-image img-responsive" data-smartkarma-image-id="152409"></figure><div class="content-caption">Source • Japan Analytics</div><hr><div>DAILY STATS</div><hr><div>PERCENTAGES - 58% of quarterly results, 48% of annual forecasts/revisions and 61% of interim forecasts have negative Scores and 30% of companies reporting lost money for the quarter.</div><hr><div>170 Quarterly Results</div><div><ul>
<li>
Results Score: 29% Positive / 12% Neutral / 58% Negative</li>
<li>
Average Results Score Change: -2.7 points</li>
<li>
Average % Change in Revenue: -10.8% Quarter YoY / +5.0% Rolling TTM YoY </li>
<li>
Average Operating Profit Margin Change: -1.3 ppt</li>
<li>
Percentage Making Quarterly Losses: 30%</li>
</ul></div><hr><div>56 Annual • 23 Interim Forecasts/Revisions</div><div><ul>
<li>Annual Forecast/Revision Score: 38% Positive / 14% Neutral / 48% Negative</li>
<li>Interim Forecast/Revision Score Change: 26% Positive / 13% Neutral / 61% Negative</li>
<li>Average Forecast/Revision Score Change: -2.2 points</li>
</ul></div>

•BEST &amp; WORST 13th AUGUST •The 'best' of yesterday's large-cap announcements came from Rakus (3923 JP), the 'worst' from ASICS Corp (7936 JP).  More extensive coverage follows in the DETAIL section below.Source • Japan AnalyticsDAILY STATSPERCENTAGES - 58% of quarterly results, 48% of annual forecasts/revisions and 61% of interim forecasts have negative Scores and 30% of companies reporting lost money for the quarter.170 Quarterly Results

Results Score: 29% Positive / 12% Neutral / 58% Negative

Average Results Score Change: -2.7 points

Average % Change in Revenue: -10.8% Quarter YoY / +5.0% Rolling TTM YoY 

Average Operating Profit Margin Change: -1.3 ppt

Percentage Making Quarterly Losses: 30%
56 Annual • 23 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 38% Positive / 14% Neutral / 48% Negative
Interim Forecast/Revision Score Change: 26% Positive / 13% Neutral / 61% Negative
Average Forecast/Revision Score Change: -2.2 points


🇯🇵 JAPAN • Results & Revisions 13th August - Asics, FUJIFILM, Dentsu, Mitsubishi Shoji

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Equity Bottom-Up

Olympus reported its 1QFY03/2021 results yesterday (05th August 2020) which saw both revenue and operating income declining YoY by 21.7% and 91.9% respectively. During the quarter, all segments reported decline in revenue and operating income due to the Covid-19 outbreak and the operating profit for the quarter was driven by mainstay endoscopic solution segment.However, the reported revenues beat consensus by 6.8% while consensus expected the company to report operating losses, nevertheless, Olympus reported operating profits for the quarter surprising the market.<table class="table table-striped"><tbody>
<tr>
<td style="width: 50.0pt;">JPY (bn)</td>
<td style="text-align: right; width: 68pt;">1QFY03/2020</td>
<td style="text-align: right; width: 96pt;">1QFY03/2021</td>
<td style="text-align: right; width: 50pt;">% YoY</td>
<td style="text-align: right; width: 50pt;">Consensus</td>
<td style="text-align: right; width: 57pt;">Actual vs Consensus</td>
</tr>
<tr>
<td style="width: 50.0pt;">Revenue</td>
<td style="text-align: right; width: 68pt;">               181.9</td>
<td style="text-align: right; width: 96pt;">                           142.4</td>
<td style="text-align: right; width: 50pt;">-21.7%</td>
<td style="text-align: right; width: 50pt;">        133.3</td>
<td style="text-align: right; width: 57pt;">6.8%</td>
</tr>
<tr>
<td style="width: 50.0pt;">OP</td>
<td style="text-align: right; width: 68pt;">                 14.7</td>
<td style="text-align: right; width: 96pt;">                               1.2</td>
<td style="text-align: right; width: 50pt;">-91.9%</td>
<td style="text-align: right; width: 50pt;">-           8.1</td>
<td style="text-align: right; width: 57pt;">nm</td>
</tr>
<tr>
<td style="width: 50.0pt;">OPM</td>
<td style="text-align: right; width: 68pt;">8.1%</td>
<td style="text-align: right; width: 96pt;">0.8%</td>
<td style="text-align: right; width: 50pt;"> </td>
<td style="text-align: right; width: 50pt;"> </td>
<td style="text-align: right; width: 57pt;"> </td>
</tr>
</tbody></table><div class="content-caption">Source: Company Disclosures, Cap IQ</div>According to Olympus, Covid-19 is estimated to have impacted revenue by JPY34bn and operating profit by JPY11bn during the quarter.

Olympus reported its 1QFY03/2021 results yesterday (05th August 2020) which saw both revenue and operating income declining YoY by 21.7% and 91.9% respectively. During the quarter, all segments reported decline in revenue and operating income due to the Covid-19 outbreak and the operating profit for the quarter was driven by mainstay endoscopic solution segment.However, the reported revenues beat consensus by 6.8% while consensus expected the company to report operating losses, nevertheless, Olympus reported operating profits for the quarter surprising the market.

JPY (bn)
1QFY03/2020
1QFY03/2021
% YoY
Consensus
Actual vs Consensus


Revenue
               181.9
                           142.4
-21.7%
        133.3
6.8%


OP
                 14.7
                               1.2
-91.9%
-           8.1
nm


OPM
8.1%
0.8%
 
 
 

Source: Company Disclosures, Cap IQAccording to Olympus, Covid-19 is estimated to have impacted revenue by JPY34bn and operating profit by JPY11bn during the quarter.

Olympus: Recovery of Endoscopic Business and Sale of Imaging Business to Support Earnings Growth

Japan

Canon Inc. is a professional and consumer imaging solutions company and patent-holder of digital imaging technologies. The Company's products include networked multifunction devices, digital and analog copiers, computer peripherals, facsimile machines, image filing systems, camcorders, cameras and lenses, semiconductor, and broadcast and medical equipment.

NEC Corporation manufactures and markets computers, telecommunication equipment, electronic devices, semiconductors, and software.  The Company's products include printers, modems, cellular phones, plasma display panels (PDP), network systems, memory, integrated circuits (IC), thin film transistor-liquid crystal display (TFT-LCD), and printed circuit boards (PCB). NEC operates worldwide.

BROTHER INDUSTRIES, LTD. manufactures and markets communications and office equipment.  The Company's main products include facsimiles, digital copy machines, label printers, and word processors.  Brother Industries also manufactures and sells sewing machines and other tools.  The Company operates its business worldwide.

RICOH COMPANY, LTD. manufactures and markets office automation equipment, electronic devices, and photographic instruments.  The Company's diverse product line includes facsimiles, image scanners, printers, digital cameras, and personal computers, as well as a full range of analog, digital, and color copiers. Ricoh operates with a network of sales offices and tie-ups worldwide.

Seiko Epson Corporation manufactures communications equipment, electronic devices, and precision products.  The Company's products include printers, scanners, Liquid Crystal Projectors, semiconductors, quartz devices, and watches.

Konica Minolta Inc is mainly engaged in manufacturing office equipment and performance materials. It also operates health care businesses. The Company also makes copiers, personal computer peripherals, optical lenses, and measuring instruments.

Noritsu Koki Co., Ltd. manufactures various photo processors.  The Company specializes in high-speed mini-photo processing lab systems.  Noritsu Koki also produces OEM (original equipment manufacturer) supply for Kodak and Konica.

MCJ Co., Ltd. manufactures and markets personal computers and its related products.  The Company provides desktop and laptop computers, computer memories, printers, and hard drives.

TOSHIBA TEC CORPORATION manufactures electronic equipment for distribution system, document processing, and household use.  The Company's products include Point of Sale (POS) systems, bar code scanners, copy machines, printers, and vacuum cleaners.

ELECOM CO., LTD. designs, manufactures, and markets computer peripherals, supplies, and accessories.  The Company offers a diverse range of products including adapters, cables, switches, local area network (LAN) devices, paper, keyboard covers, and chairs.

Western Digital Corporation is a global provider of solutions for the collection, storage, management, protection and use of digital content, including audio and video. The Company's products include hard drives, solid-state drives, and home entertainment and networking products.

Quanta Computer Inc. manufactures and markets notebook computers and related peripheral equipment.

HP Inc. provides imaging and printing systems, computing systems, mobile devices, solutions, and services for business and home. The Company offers products which includes laser and inkjet printers, scanners, copiers and faxes, personal computers, workstations, storage solutions, and other computing and printing systems. HP sells its products worldwide.

Super Micro Computer, Inc. designs, develops, manufactures and sells server solutions based on modular and open-standard x86 architecture. The Company's products include servers, motherboards, chassis, and accessories.

Seagate Technology Holdings Public Limited Company offers computer hardware products. The Company designs, manufactures, and markets hard disk drives for enterprise applications, client compute applications, client non-compute applications, personal data backup systems, portable external storage systems and digital media systems.

Asustek Computer Inc. manufactures and markets computer motherboards, interface cards, notebook computers, and other related products.

Lenovo Group Limited, through its subsidiaries, sells, and manufactures personal computers and handheld devices. The Company also provides Internet services and IT services, and contracting manufacturing business.

Focus Media Information Technology Co., Ltd. engages in media network for advertisements including within cinemas, posters and advertising displays in commercial offices or buildings.

Focus Media Information Technology Co, Ltd. (002027 CH)

Focus Media Information Technology Co, Ltd.

NetApp, Inc. provides storage and data management solutions. The Company's storage solutions include specialized hardware, software, and services that provide storage management for open network environments. NetApp  serves enterprises, government agencies, and universities worldwide.

BOE Technology Group Co., Ltd. manufactures display products. The Company produces display panels, sensor devices, and other products. BOE Technology Group supplies its products in mobile phones, tablets, notebooks, monitors, and other fields.

FUJIFILM Holdings Corporation develops, sells and services Imaging, Information, and Document Solutions.  Its products include color films, digital cameras, photofinishing products and equipment.  The Group also manufactures medical and graphic art use equipment and materials, FPD materials, and optical devices, and provides services on office copy machines, printers, and related equipment.

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FUJIFILM Holdings (4901 JP)

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Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

The Right Trade May Be Hitachi

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EQUITY-DRIVEN - Japans

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With only one results and two revisions yesterday this update will be brief.

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Campbell Gunn

Olympus: Recovery of Endoscopic Business and Sale of Imaging Business to Support Earnings Growth

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Shifara Samsudeen, ACMA, CGMA