Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>Japanese stocks shrugged off weakness in overseas markets to close up for the second week running</li>
<li>All eyes were on the BOJ, which did absolutely nothing.  The Yield Curve will be defended at all costs</li>
<li>Stocks on our watchlist returned about +1.5% this week. They have been consolidating for the past 6 months</li>
</ul>


Japanese stocks shrugged off weakness in overseas markets to close up for the second week running
All eyes were on the BOJ, which did absolutely nothing.  The Yield Curve will be defended at all costs
Stocks on our watchlist returned about +1.5% this week. They have been consolidating for the past 6 months


<ul>
<li>OVERSEAS: SPX +0.7%  SOX +1.35; Beta rally continues on lower CPI print expectations;  Cyclicals lead 10/11 SPX Sectors positive; MSFT considers $10bn OPEN AI investment; Record Boeing orders in 2022. </li>
<li>JAPAN: NKY Futs +0.3% premium to Cash; USDJPY steady ¥132.1; Hot Tokyo CPI print; Big wage hikes at Fast Retail;  Travel - China strikes back; +ve JP Boeing supply chain. </li>
<li>DAILY NUGGETS: Hydrogen - a clean alternative. Japan is set to lead as companies ramp up R&amp;D protection with a view to commercialisation.</li>
</ul>


OVERSEAS: SPX +0.7%  SOX +1.35; Beta rally continues on lower CPI print expectations;  Cyclicals lead 10/11 SPX Sectors positive; MSFT considers $10bn OPEN AI investment; Record Boeing orders in 2022. 
JAPAN: NKY Futs +0.3% premium to Cash; USDJPY steady ¥132.1; Hot Tokyo CPI print; Big wage hikes at Fast Retail;  Travel - China strikes back; +ve JP Boeing supply chain. 
DAILY NUGGETS: Hydrogen - a clean alternative. Japan is set to lead as companies ramp up R&amp;D protection with a view to commercialisation.


Good Morning Japan |Beta Rally Continues on Expectations of Tame CPI Print

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

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

<ul>
<li>Shift offers outsourced software testing services and is the market leader in Japan. Software testing market is estimated at JPY5.5trn in Japan but only 1% of the market is outsourced.</li>
<li>The company has been rebranding itself from software testing provider to digital transformation (DX) and business services provider and this expansion has further potential to drive growth in the long-term.</li>
<li>Though Shift’s valuation multiples look expensive, we think there is further upside given the strong growth in top line alongside further improvement in margins.</li>
</ul>


Shift offers outsourced software testing services and is the market leader in Japan. Software testing market is estimated at JPY5.5trn in Japan but only 1% of the market is outsourced.
The company has been rebranding itself from software testing provider to digital transformation (DX) and business services provider and this expansion has further potential to drive growth in the long-term.
Though Shift’s valuation multiples look expensive, we think there is further upside given the strong growth in top line alongside further improvement in margins.


2023 High Conviction: Shift’s Growth Strategy Starting to Deliver Results

BayCurrent Consulting  / Equity Bottom-Up

<ul>
<li>BayCurrent remains the key beneficiary of the trend towards digital transformation (DX) and Japan's efforts to catch-up with global competitors</li>
<li>Q2 sales growth of 33% highlights continued structural opportunity that should remain in place for at least a decade</li>
<li>We believe that the share price can double over the next few years as the stock prices in the secular growth story</li>
</ul>


BayCurrent remains the key beneficiary of the trend towards digital transformation (DX) and Japan's efforts to catch-up with global competitors
Q2 sales growth of 33% highlights continued structural opportunity that should remain in place for at least a decade
We believe that the share price can double over the next few years as the stock prices in the secular growth story


BayCurrent (6532) | Riding the Wave of Digitization

<ul>
<li>The Nikkei was flat over the past five days, while the yen strengthened from ¥136 to ¥132.5/$ </li>
<li>Sony cuts profit outlook due to weak games sales. Segment OP cut ¥50b (-16%) </li>
<li>Japan and US to enter chip alliance to develop next-generation 2-nm semiconductors </li>
</ul>


The Nikkei was flat over the past five days, while the yen strengthened from ¥136 to ¥132.5/$ 
Sony cuts profit outlook due to weak games sales. Segment OP cut ¥50b (-16%) 
Japan and US to enter chip alliance to develop next-generation 2-nm semiconductors 


Japan Stocks on the Move | M3, BayCurrent, Makita, NEC

Japan

Baycurrent Consulting , Inc. offers comprehensive consulting services in a wide variety of industries. The company's main focus areas are business strategy consulting, IT consulting, and IT integration.

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BayCurrent Consulting (6532 JP)

Japan Weekly | BayCurrent, Mercari

The Japan Weekly looks at the events that have been impacting the Japanese market over the past week and the stocks that have moved the markets.

Mark Chadwick

Good Morning Japan |Beta Rally Continues on Expectations of Tame CPI Print

JAPAN: NKY Futs +0.3% premium to Cash; USDJPY steady ¥132.1; Hot Tokyo CPI print; Big wage hikes at Fast Retail; Travel - China strikes back; +ve...

Mark Chadwick

2023 High Conviction: Shift’s Growth Strategy Starting to Deliver Results

Being the market leader and having created a barrier in the enterprise software testing segment, Shift is well positioned to benefit from strong...

Shifara Samsudeen, ACMA, CGMA

BayCurrent (6532) | Riding the Wave of Digitization

BayCurrent remains the key beneficiary of the trend towards digital transformation (DX) and Japan's efforts to catch-up with global competitors....

Mark Chadwick

Japan Stocks on the Move | M3, BayCurrent, Makita, NEC

As Japan grapples with record Covid cases and marauding monkeys, we highlight the stocks that were winners and losers over the past week

Mark Chadwick

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