Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS.  Powell Testifies. 50bp hike more likely  as inflation higher than expected. Sparks repricing in markets: US Equities hit, UST dumped, USD rises - Choas all round. </li>
<li>JAPAN.  NKY Futs -0.4% vs Cash; USDJPY weakens to 137.1 as Powell tesimony digested;  H3 failure-blow to JP space hopes; "My Number" Use expanded;  Dentsu UK M&amp;A; Many Rating D/Gs </li>
<li>NUGGET. Carbon Capture is a key part of the decarbonization mix; Expect significant spend locally and globally. We look at the opportunity and the firms likely to benefit.  </li>
</ul>


OVERSEAS.  Powell Testifies. 50bp hike more likely  as inflation higher than expected. Sparks repricing in markets: US Equities hit, UST dumped, USD rises - Choas all round. 
JAPAN.  NKY Futs -0.4% vs Cash; USDJPY weakens to 137.1 as Powell tesimony digested;  H3 failure-blow to JP space hopes; "My Number" Use expanded;  Dentsu UK M&amp;A; Many Rating D/Gs 
NUGGET. Carbon Capture is a key part of the decarbonization mix; Expect significant spend locally and globally. We look at the opportunity and the firms likely to benefit.  


Good Morning Japan |Powell Dishes Bitter Pill - Sparks Cross Market Chaos; NUGGET: CCUS Opportunity

Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

<p>Dentsu reported record full-year headline results in FY22, which were bolstered by a final quarter in which the company delivered organic net revenue growth of 3.5%. Good progress continues to be made in Customer Transformation and Technology (CT&T), which grew 17.5% y-o-y and constituted 32% of revenues in the year. Management forecasts 4% organic revenue growth for FY23, reflecting the tougher macroeconomic environment. Guidance on the underlying operating margin in FY23 is for a retrenchment to 17.5% as investment is made to drive CT&T and support the One dentsu initiative. This is set to rebound to 18.0% in FY24 as the benefits start to flow through. Year-end net cash of ¥71.3bn and an appetite for leverage of 1.0–1.5x provides ample resource for both capex and M&A. Our FY23 estimates are under review.</p>

Dentsu reported record full-year headline results in FY22, which were bolstered by a final quarter in which the company delivered organic net revenue growth of 3.5%. Good progress continues to be made in Customer Transformation and Technology (CT&T), which grew 17.5% y-o-y and constituted 32% of revenues in the year. Management forecasts 4% organic revenue growth for FY23, reflecting the tougher macroeconomic environment. Guidance on the underlying operating margin in FY23 is for a retrenchment to 17.5% as investment is made to drive CT&T and support the One dentsu initiative. This is set to rebound to 18.0% in FY24 as the benefits start to flow through. Year-end net cash of ¥71.3bn and an appetite for leverage of 1.0–1.5x provides ample resource for both capex and M&A. Our FY23 estimates are under review.

<ul>
<li>OVERSEAS. SPX -1.1% as Fed Hawks rhetoric ratches up; All 11 Sectors -ve as Beta Sold; ALPHABET-7.7% AI fails to impress; Disney +8% after-hours with earnings beat/job cuts. </li>
<li>JAPAN.  NKY Futs -0.8% vs Cash; USDJPY 131.41; Japan looking to ease restrictions for China Inbound;  EARNINGS: Pan Pac/SMM Strong vs weak Subaru which -ve production cut; Toyota out today. </li>
<li>DAILY NUGGETS. EPIC fail from Alphabet's "BARD". Aren't these events supposed to  be choreographed ????</li>
</ul>


OVERSEAS. SPX -1.1% as Fed Hawks rhetoric ratches up; All 11 Sectors -ve as Beta Sold; ALPHABET-7.7% AI fails to impress; Disney +8% after-hours with earnings beat/job cuts. 
JAPAN.  NKY Futs -0.8% vs Cash; USDJPY 131.41; Japan looking to ease restrictions for China Inbound;  EARNINGS: Pan Pac/SMM Strong vs weak Subaru which -ve production cut; Toyota out today. 
DAILY NUGGETS. EPIC fail from Alphabet's "BARD". Aren't these events supposed to  be choreographed ????


Good Morning Japan |Hawks Re-Emerge + Epic "BARD" Fail Sinks Google; Pan Pac Beat/Subaru Miss

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>In early November, <a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life Insurance (8750 JP)</a> announced it would buy <a href="https://www.smartkarma.com/entities/ipet-holdings-inc" target="_blank" data-smartkarma-citation="entities:36551:1" rel="noopener">ipet Holdings (7339 JP)</a>, of which listed VC/PE/incubator <a href="https://www.smartkarma.com/entities/dream-incubator-inc" target="_blank" data-smartkarma-citation="entities:1229:1" rel="noopener">Dream Incubator (4310 JP)</a> owned 55%. DI agreed. </li>
<li>Dream Incubator's exit is worth ¥21.54bn in cash and ¥18.2bn in extraordinary gains on the consolidated financial statements for March 2023. </li>
<li>That is nice. They have promised to deliver ¥10bn of proceeds to shareholders and reinvest the other ¥5bn to grow their consulting business. It's a nice little asset.</li>
</ul>


In early November, Dai Ichi Life Insurance (8750 JP) announced it would buy ipet Holdings (7339 JP), of which listed VC/PE/incubator Dream Incubator (4310 JP) owned 55%. DI agreed. 
Dream Incubator's exit is worth ¥21.54bn in cash and ¥18.2bn in extraordinary gains on the consolidated financial statements for March 2023. 
That is nice. They have promised to deliver ¥10bn of proceeds to shareholders and reinvest the other ¥5bn to grow their consulting business. It's a nice little asset.


Dream Incubator (4310 JP) - An Interesting Exit and Attractive Valuation for Future Growth

<p>Dentsu’s Q322 results show an organic net revenue decline of 3.7% (-4.7% including Russia), reflecting a particularly tough comparative with Q321 in Japan. This masks continuing good progress in building revenues from Customer Transformation & Technology (CT&T), which grew over 20% and now constitutes 32.6% of group revenues. Alongside the figures, Dentsu announced a further restructuring from 1 January 2023 that removes the distinction between Dentsu Japan Network (DJN) and Dentsu International (DI). The reconfigured global management team will reflect the group’s increasing diversity and includes the first non-Japanese CFO.</p>

Dentsu’s Q322 results show an organic net revenue decline of 3.7% (-4.7% including Russia), reflecting a particularly tough comparative with Q321 in Japan. This masks continuing good progress in building revenues from Customer Transformation & Technology (CT&T), which grew over 20% and now constitutes 32.6% of group revenues. Alongside the figures, Dentsu announced a further restructuring from 1 January 2023 that removes the distinction between Dentsu Japan Network (DJN) and Dentsu International (DI). The reconfigured global management team will reflect the group’s increasing diversity and includes the first non-Japanese CFO.

Dentsu Group - Solid Q3 and new One dentsu group structure

Japan

DENTSU INC. mainly provides comprehensive advertising services.  The Company also provides marketing and event planning & promotion services.  Dentsu has associated companies in the US, Europe, and Asia.

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Dentsu Inc (4324 JP)

Good Morning Japan |Powell Dishes Bitter Pill - Sparks Cross Market Chaos; NUGGET: CCUS Opportunity

REALITY CHECK FROM POWELL; USDJPY weakens to 137.1 as Powell tesimony digested; H3 failure-blow to JP space hopes; "My Number" Use expanded; ...

Mark Chadwick

Dentsu Group - Record year in FY22

Dentsu reported record full-year headline results in FY22, which were bolstered by a final quarter in which the company delivered organic net...

Edison Investment Research

Good Morning Japan |Hawks Re-Emerge + Epic "BARD" Fail Sinks Google; Pan Pac Beat/Subaru Miss

Fed Hawks rhetoric ratches up; ALHABET-7.7% AI fails to impress; . Japan looking to ease restrictions for China Inbound; JAPAN EARNINGS: Pan Pac...

Mark Chadwick

Dream Incubator (4310 JP) - An Interesting Exit and Attractive Valuation for Future Growth

Dream Incubator has incubated and exited. Now is their biggest, and then they will distribute capital to shareholders. This will be a smaller,...

Travis Lundy

Dentsu Group - Solid Q3 and new One dentsu group structure

Dentsu’s Q322 results show an organic net revenue decline of 3.7% (-4.7% including Russia), reflecting a particularly tough comparative with Q321...

Edison Investment Research

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