Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

NTT (Nippon Telegraph & Telephone) / Equity Bottom-Up

<ul>
<li>We have tweaked our numbers after Q2 results and catching up with the company.  In particular, we come away with more confidence in wireless / fintech growth</li>
<li>NTT looks cheap at 11x FY22e EPS v 12x for KDDI even as relative growth is expected to be better with ~9% EPS growth</li>
<li>Shares have outperformed TOPIX (+18% YTD v -3%) and this should continue in 2023 as solid financial performance and an attractive shareholder returns story provide support</li>
</ul>


We have tweaked our numbers after Q2 results and catching up with the company.  In particular, we come away with more confidence in wireless / fintech growth
NTT looks cheap at 11x FY22e EPS v 12x for KDDI even as relative growth is expected to be better with ~9% EPS growth
Shares have outperformed TOPIX (+18% YTD v -3%) and this should continue in 2023 as solid financial performance and an attractive shareholder returns story provide support


2023 High Conviction: NTT (Buy) - Surging DoCoMo Underappreciated as Markets Step Back from Value

<ul>
<li>Rakuten's successful junk bond sale means the Rakuten Bank IPO will happen next year and not in December as some had feared</li>
<li>More detail on mobile shows that network costs including D&amp;A are 4x that of service revenue and slightly higher QoQ. Roaming alone is higher than service revenue </li>
<li>And that means Rakuten can't aggressively go after new subscribers unless it wants operating losses to accelerate. Bad for Rakuten but good news for incumbents KDDI, NTT and Softbank. </li>
</ul>


Rakuten's successful junk bond sale means the Rakuten Bank IPO will happen next year and not in December as some had feared
More detail on mobile shows that network costs including D&amp;A are 4x that of service revenue and slightly higher QoQ. Roaming alone is higher than service revenue 
And that means Rakuten can't aggressively go after new subscribers unless it wants operating losses to accelerate. Bad for Rakuten but good news for incumbents KDDI, NTT and Softbank. 


Rakuten (Neutral) - Follow up After Results: Mobile Issues Far from Over

<ul>
<li>We are publishing updated forecasts and commentary for Sky Perfect after meeting the company post-results </li>
<li>Media results were predictably weak but the company hopes to make up ground in H2 as it ramps up marketing spend to support sport packages that launch in Spring</li>
<li>Amazon's reveal that it has tested LEO-based satellite software highlights cloud platform interest in space ICT infrastructure like that being pursued by Sky Perfect JSAT and NTT</li>
</ul>


We are publishing updated forecasts and commentary for Sky Perfect after meeting the company post-results 
Media results were predictably weak but the company hopes to make up ground in H2 as it ramps up marketing spend to support sport packages that launch in Spring
Amazon's reveal that it has tested LEO-based satellite software highlights cloud platform interest in space ICT infrastructure like that being pursued by Sky Perfect JSAT and NTT


Sky Perfect JSAT (Buy) - Q2 Follow up Plus Amazon Proof of Concept for Space Compass

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a> announced Q2 results today during market hours. The stock had been trading up 1.1% on the day, but fell 1% in 5 minutes.</li>
<li>It then spent the rest of the day grinding higher to end just higher than just before results. </li>
<li>NTT announced another buyback - this one on-market. It is only a little bit of a surprise.</li>
</ul>



NTT (Nippon Telegraph &amp; Telephone) (9432 JP) announced Q2 results today during market hours. The stock had been trading up 1.1% on the day, but fell 1% in 5 minutes.
It then spent the rest of the day grinding higher to end just higher than just before results. 
NTT announced another buyback - this one on-market. It is only a little bit of a surprise.


<ul>
<li>Results were mostly positive with strong forex-boosted revenue growth and mobile outperformance </li>
<li>An expansion of the buyback program helps sentiment as an additional Y150bn program takes FY22 buybacks to the highest single-year total since 2005</li>
<li>Comments at the analyst meeting focused on underlying costs but management seems positive that it can manage with cost efficiencies</li>
</ul>


Results were mostly positive with strong forex-boosted revenue growth and mobile outperformance 
An expansion of the buyback program helps sentiment as an additional Y150bn program takes FY22 buybacks to the highest single-year total since 2005
Comments at the analyst meeting focused on underlying costs but management seems positive that it can manage with cost efficiencies


NTT (Buy) - Q2 22 Results Reaction: Expanded Buyback Is Second Largest Ever

Japan

Nippon Telegraph and Telephone Corporation provides a variety of telecommunication services, including telephone, telegraph, leased circuits, data communication, terminal equipment sales, and related services. The Company provides both local and long distance telephone services within Japan.

NTT (Nippon Telegraph & Telephone) (9432 JP)

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NTT (Nippon Telegraph & Telephone) (9432 JP)

2023 High Conviction: NTT (Buy) - Surging DoCoMo Underappreciated as Markets Step Back from Value

NTT shares have fallen 10% from recent highs but improving results for mobile and fintech and a second FY22 buyback program should reassure...

Kirk Boodry

Rakuten (Neutral) - Follow up After Results: Mobile Issues Far from Over

Elevated network costs hamper Rakuten's ability to go out and get new subscribers as it could drive operating losses higher. Meanwhile, the...

Kirk Boodry

Sky Perfect JSAT (Buy) - Q2 Follow up Plus Amazon Proof of Concept for Space Compass

Media results have been predictably weak but key tailwinds for Space segment growth remain. Meanwhile, Amazon appears interested in space...

Kirk Boodry

NTT Q2 Results and a New Buyback

NTT reports Q2 results, mostly OK, a little softer than some expected. But they also announce a decent add-on buyback for the last 4+ months of the...

Travis Lundy

NTT (Buy) - Q2 22 Results Reaction: Expanded Buyback Is Second Largest Ever

Financial results were modestly positive with a miss at NTT Data but solid mobile performance. An increase in the buyback takes returns to near...

Kirk Boodry

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