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Granite Bay Capital

An innovation focussed investment company

Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

Thematic (Sector/Industry)

<h2>Headline Developments</h2>The verdict is out in the Apple (AAPL) vs Epic (private) case, with the court ruling that Apple cannot stop app developers from directing users to third-party payment options, whilst ordering Epic to pay damages for violating Apple’s in-app purchasing system.

Headline DevelopmentsThe verdict is out in the Apple (AAPL) vs Epic (private) case, with the court ruling that Apple cannot stop app developers from directing users to third-party payment options, whilst ordering Epic to pay damages for violating Apple’s in-app purchasing system.

Research from Drawbridge Research, Drawbridge Research

Drawbridge Research

Research from Drawbridge Research

The team at Drawbridge Research believes that to take advantage of market mispricing a first principles understanding must be obtained on what a company fundamentally does, the purpose that gives that company a reason to exist, and how that company executes on serving its purpose and function.

Once a first principles understanding is obtained, we believe it becomes possible to discern real world fact from market fiction. A fundamental understanding, coupled with this separation, allows for an evaluation of a company’s inherent value that is not biased by market sentiment.

This approach requires significant qualitative research coupled with a detailed understanding of company financial accounts to understand what attributes drive and protect profitability. These two parts of Drawbridge’s research approach are not viewed separately by the research team but instead as two interdependent parts of a broad, exhaustive, and complete investment research process.

Price is equally paramount. This means that a company must be priced at a level where it offers significant growth in value, as our goal is to achieve outsized returns, not to simply collect quality companies. In addition to the upside potential, a company must be attractively priced enough to ensure the preservation of capital in the case our thesis turns out to be wrong.

Equity Bottom-Up

This is the second of three research notes covering Sony Group. Part 1 looked at Sony’s semiconductor and electronics businesses and how they have both collaborated to redefine the interchangeable-lens camera market whilst both having their own idiosyncratic growth drivers. This note covers the company’s music business, the incredible behavioural biases currently affecting its perception and the first principles of digital and analog audio that lead to this perception. Secondly, the company’s pictures business is examined with an emphasis on the fact that Sony is the only major Hollywood studio to not have invested in its own streaming service. We show how this strategy to not pursue streaming has resulted in Sony being the sole major Hollywood studio able to supply exclusive content to streaming services, with all other majors unable to due to the fact they are competing with each other in the streaming market themselves. Finally, we look at how walls continue to be broken down between Sony’s business units whilst analysing PlayStation Productions, a collaboration between Sony’s music and gaming business. PlayStation Productions aims to leverage Sony’s extensive catalogue of renowned and maturing gaming IP into Film and TV adaptions, all at a time when exclusive content is commanding a premium price.

This is the second of three research notes covering Sony Group. Part 1 looked at Sony’s semiconductor and electronics businesses and how they have both collaborated to redefine the interchangeable-lens camera market whilst both having their own idiosyncratic growth drivers. This note covers the company’s music business, the incredible behavioural biases currently affecting its perception and the first principles of digital and analog audio that lead to this perception. Secondly, the company’s pictures business is examined with an emphasis on the fact that Sony is the only major Hollywood studio to not have invested in its own streaming service. We show how this strategy to not pursue streaming has resulted in Sony being the sole major Hollywood studio able to supply exclusive content to streaming services, with all other majors unable to due to the fact they are competing with each other in the streaming market themselves. Finally, we look at how walls continue to be broken down between Sony’s business units whilst analysing PlayStation Productions, a collaboration between Sony’s music and gaming business. PlayStation Productions aims to leverage Sony’s extensive catalogue of renowned and maturing gaming IP into Film and TV adaptions, all at a time when exclusive content is commanding a premium price.

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.

While the battle for payment systems between Epic and Apple will continue with Epic filing an appeal, the rather mild ruling against Apple has some interesting implications, as do the responses of both companies to the ruling. In the context of regulatory upheaval in the key gaming space in China and a slew of regulatory moves in other Asian countries such as Japan and South Korea, there is plenty worth mulling as new winners and losers could emerge.

While the battle for payment systems between Epic and Apple will continue with Epic filing an appeal, the rather mild ruling against Apple has some interesting implications, as do the responses of both companies to the ruling. In the context of regulatory upheaval in the key gaming space in China and a slew of regulatory moves in other Asian countries such as Japan and South Korea, there is plenty worth mulling as new winners and losers could emerge.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

PHC Holdings and its shareholders aim to raise around US$1.8bn via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mistui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).PHC is engaged in the development, manufacturing and sale of healthcare devices and services. The company has three main segments: Diabetes Management (35% of FY21 revenue); Healthcare Services (37.9% of FY21 revenue); and Diagnosis/Life Science (26.1% of FY21 revenue).PHC’s revenue has increased by 64% over FY19-FY21 and it was up another 29% in 1Q22. The growth has mainly been driven by acquisition of a number of firms over the reporting period. Although, its main division, Diabetes Management appears to be suffering from a decline in revenue that has been going on for a while. In addition, it's difficult to pinpoint the growth of its other segments owing to the acquisitions having been completed mid-year.Furthermore, it's not clear to us how the company acts as one firm, as all of its acquired firms appear to be working independently and there hasn’t been much mention of synergies.

PHC Holdings and its shareholders aim to raise around US$1.8bn via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mistui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).PHC is engaged in the development, manufacturing and sale of healthcare devices and services. The company has three main segments: Diabetes Management (35% of FY21 revenue); Healthcare Services (37.9% of FY21 revenue); and Diagnosis/Life Science (26.1% of FY21 revenue).PHC’s revenue has increased by 64% over FY19-FY21 and it was up another 29% in 1Q22. The growth has mainly been driven by acquisition of a number of firms over the reporting period. Although, its main division, Diabetes Management appears to be suffering from a decline in revenue that has been going on for a while. In addition, it's difficult to pinpoint the growth of its other segments owing to the acquisitions having been completed mid-year.Furthermore, it's not clear to us how the company acts as one firm, as all of its acquired firms appear to be working independently and there hasn’t been much mention of synergies.

PHC Holdings Pre-IPO - Many Companies Rolled into One

Overnight Sony held a PlayStation Showcase event which surprised to the upside in terms of the number and quality of titles on display. It further cemented Sony’s commitment to rolling out its own games on PC and the strategic implications for its first party studios also look intriguing.

Overnight Sony held a PlayStation Showcase event which surprised to the upside in terms of the number and quality of titles on display. It further cemented Sony’s commitment to rolling out its own games on PC and the strategic implications for its first party studios also look intriguing.

Conviction Call Sony – PlayStation Showcase Underlines Strength of Pipeline

Japan

Sony Corporation manufactures audio, home video game consoles, communications, key device and information technology products for the consumer and professional markets.  The Company's other businesses include music, pictures, computer entertainment, and online businesses.

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Sony Corp (6758 JP)

Weekly Innovation Review (WIRE) #49

The verdict is out in the Apple (AAPL) vs Epic (private) case, with the court ruling that Apple cannot stop app developers from directing users to...

Granite Bay Capital

Sony Part 2: Arms Dealer in an Arms Race

This note covers the company’s music business, the incredible behavioural biases currently affecting its perception and the first principles of...

Drawbridge Research

Not an Epic Ruling Against Apple

We examine developments in Epic's legal battle with Apple to identify potential long-term implications and winners and losers.

Mio Kato

PHC Holdings Pre-IPO - Many Companies Rolled into One

PHC Holdings and its shareholders aim to raise around US$1.8bn via selling a mix of primary and secondary shares in its Japan IPO.

Sumeet Singh

Conviction Call Sony – PlayStation Showcase Underlines Strength of Pipeline

Sony's PlayStation Showcase surprised to the upside in terms of the number and quality of titles on display and the strategic implications for its...

Mio Kato

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