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

As long as market dynamics remain largely positive and the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we believe a constructive outlook is warranted. To reiterate, support levels to watch include $90 on ACWI-US, $53 on ACWX-US, and $52 on EEM-US. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

As long as market dynamics remain largely positive and the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we believe a constructive outlook is warranted. To reiterate, support levels to watch include $90 on ACWI-US, $53 on ACWX-US, and $52 on EEM-US. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

Global Equity Strategy: Constructive Pullback; Overweight Value

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

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

Nissan’s 3QFY21 results displayed a similar recovery trend to other automakers though like Honda, the margin trend looks more positive than top line trends. Reported revenue was 0.6% lower than consensus estimates, while operating profit was ¥67bn higher, mainly due to the sharp recovery of its Automobile business which grew 33.1% QoQ.<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 - 3QFY21</td>
<td style="width: 23.66%;">2,225</td>
<td style="width: 21.7%;">27</td>
<td style="width: 19.52%;">1.2%</td>
</tr>
<tr>
<td style="width: 35.12%;">Consensus - 3QFY21</td>
<td style="width: 23.66%;">2,238</td>
<td style="width: 21.7%;">-39</td>
<td style="width: 19.52%;">-1.8%</td>
</tr>
<tr>
<td style="width: 35.12%;">Surprise</td>
<td style="width: 23.66%;">-0.6%</td>
<td style="width: 21.7%;">NM</td>
<td style="width: 19.52%;">3.0% points</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 - FY21</td>
<td style="width: 23.66%;">7,700</td>
<td style="width: 21.7%;">-205</td>
<td style="width: 19.52%;">-2.7%</td>
</tr>
<tr>
<td style="width: 35.12%;">Consensus - FY21</td>
<td style="width: 23.66%;">7,750</td>
<td style="width: 21.7%;">-265</td>
<td style="width: 19.52%;">-3.4%</td>
</tr>
<tr>
<td style="width: 35.12%;">Change</td>
<td style="width: 23.66%;">-0.7%</td>
<td style="width: 21.7%;">NM</td>
<td style="width: 19.52%;">0.8% points</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%;">Implied Guidance- 4QFY21</td>
<td style="width: 23.66%;">2,383</td>
<td style="width: 21.7%;">-73</td>
<td style="width: 19.52%;">-3.1%</td>
</tr>
<tr>
<td style="width: 35.12%;">Consensus - 4QFY21</td>
<td style="width: 23.66%;">2,465</td>
<td style="width: 21.7%;">-46</td>
<td style="width: 19.52%;">-1.8%</td>
</tr>
<tr>
<td style="width: 35.12%;">Change</td>
<td style="width: 23.66%;">-3.4%</td>
<td style="width: 21.7%;">NM</td>
<td style="width: 19.52%;">-1.2% points</td>
</tr>
</tbody></table><div style="text-align: left;" class="content-caption">Source: Company disclosures, CapIQ</div>As a result of Nissan’s better performance, the company has revised its OP guidance for FY21 and now expects an operating loss of ¥205bn (an improvement of ¥135bn), while its full year revenue guidance was revised down -3.0% to ¥7,700bn.

Nissan’s 3QFY21 results displayed a similar recovery trend to other automakers though like Honda, the margin trend looks more positive than top line trends. Reported revenue was 0.6% lower than consensus estimates, while operating profit was ¥67bn higher, mainly due to the sharp recovery of its Automobile business which grew 33.1% QoQ.

In ¥bn
Revenue 
OP
OPM


Actual Results - 3QFY21
2,225
27
1.2%


Consensus - 3QFY21
2,238
-39
-1.8%


Surprise
-0.6%
NM
3.0% points


 
 
 
 


Guidance - FY21
7,700
-205
-2.7%


Consensus - FY21
7,750
-265
-3.4%


Change
-0.7%
NM
0.8% points


 
 
 
 


Implied Guidance- 4QFY21
2,383
-73
-3.1%


Consensus - 4QFY21
2,465
-46
-1.8%


Change
-3.4%
NM
-1.2% points

Source: Company disclosures, CapIQAs a result of Nissan’s better performance, the company has revised its OP guidance for FY21 and now expects an operating loss of ¥205bn (an improvement of ¥135bn), while its full year revenue guidance was revised down -3.0% to ¥7,700bn.

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

<div>• RESULTS &amp; REVISIONS SUMMARY - 9th FEBRUARY •</div><div>Of yesterday's 246 results announcements, 70% scored positively for earnings momentum despite trailing revenues falling by 7.3% on average and a 1.7 point decline in operating margins. 14% of companies were in the red for the quarter.  75% of the 119 annual forecasts/revision announcements scored positively, and the average Forecast/Revision score was +5.0 points.</div><div>• BEST &amp; WORST •</div>Tuesday's 'best' larger-cap announcements came from <a href="https://www.smartkarma.com/entities/shimano-inc" target="_blank" data-smartkarma-citation="entities:3777:1" rel="noopener">Shimano (7309 JP)</a> and <a href="https://www.smartkarma.com/entities/honda-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:154:1" rel="noopener">Honda Motor (7267 JP)</a>; the 'worst' were from <a href="https://www.smartkarma.com/entities/japan-tobacco-inc" target="_blank" data-smartkarma-citation="entities:13498:1" rel="noopener">Japan Tobacco (2914 JP)</a> and <a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a>.  For more, see the DETAIL section below.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/836/original/2021-02-10_06-35-27.png?1612906548" class="editor-image img-responsive" data-smartkarma-image-id="187836"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/837/original/2021-02-10_06-37-11.png?1612906645" class="editor-image img-responsive" data-smartkarma-image-id="187837"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/838/original/2021-02-10_06-37-54.png?1612906686" class="editor-image img-responsive" data-smartkarma-image-id="187838"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/839/original/2021-02-10_06-38-45.png?1612906738" class="editor-image img-responsive" data-smartkarma-image-id="187839"></figure></section><div class="content-caption">   Source for all charts &amp; tables: Japan Analytics</div>

• RESULTS &amp; REVISIONS SUMMARY - 9th FEBRUARY •Of yesterday's 246 results announcements, 70% scored positively for earnings momentum despite trailing revenues falling by 7.3% on average and a 1.7 point decline in operating margins. 14% of companies were in the red for the quarter.  75% of the 119 annual forecasts/revision announcements scored positively, and the average Forecast/Revision score was +5.0 points.• BEST &amp; WORST •Tuesday's 'best' larger-cap announcements came from Shimano (7309 JP) and Honda Motor (7267 JP); the 'worst' were from Japan Tobacco (2914 JP) and Nexon (3659 JP).  For more, see the DETAIL section below.   Source for all charts &amp; tables: Japan Analytics

🇯🇵 JAPAN • Results & Revisions Update 02/09 - Shimano, Honda, Japan Tobacco

There has been a lot of newsprint lately regarding Apple seeking partners to tie-up with to produce EVs. Bloomberg reports discussion with at least six automakers including Hyundai and Japanese manufacturers, though timelines for launch are still far out at about five years. Bloomberg’s latest report suggests that <a href="https://www.bloomberg.com/news/articles/2021-02-05/apple-talks-with-hyundai-kia-on-electric-car-paused-recently" target="_blank" rel="noopener">talks with Hyundai have been paused</a> so the question is whether one of the Japanese automakers might step in instead.

There has been a lot of newsprint lately regarding Apple seeking partners to tie-up with to produce EVs. Bloomberg reports discussion with at least six automakers including Hyundai and Japanese manufacturers, though timelines for launch are still far out at about five years. Bloomberg’s latest report suggests that talks with Hyundai have been paused so the question is whether one of the Japanese automakers might step in instead.

Does an Apple Tie-Up Make Sense for J-Autos?

Japan

NISSAN MOTOR CO., LTD. manufactures and distributes automobiles and related parts. It also provides financing services. Nissan delivers a comprehensive range of products under various brands. The Company manufactures in Japan, the United States, Mexico, the United Kingdom and many other countries.

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Nissan Motor (7201 JP)

Global Equity Strategy: Constructive Pullback; Overweight Value

As long as the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we...

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

Nissan – Margin Recovery

Nissan's long awaited turnaround appears to finally be coming through as the company leaves behind an incentive-driven business model. The next...

Mio Kato

🇯🇵 JAPAN • Results & Revisions Update 02/09 - Shimano, Honda, Japan Tobacco

Of yesterday's 246 results announcements, 70% scored positively for earnings momentum despite trailing revenues falling by 7.3% on average and a...

Campbell Gunn

Does an Apple Tie-Up Make Sense for J-Autos?

In the search for potential suitors for Apple's entry into the EV space we examine the likelihood of the major Japanese auto manufacturers...

Mio Kato

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