Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a> sees its AGM next week with new directors and a possible privatisation process ongoing. But the AGM is a done deal and privatisation is not.</li>
<li>The event-i-ness of Toshiba keeps it "supported" while its better-valued and higher-growth peers fall harder in the face of recent overall market weakness. </li>
<li>Toshiba promised transparency on its privatisation process, and so far, it has delivered everything it promised. The next "transparency" likely comes in November. </li>
</ul>



Toshiba Corp (6502 JP) sees its AGM next week with new directors and a possible privatisation process ongoing. But the AGM is a done deal and privatisation is not.
The event-i-ness of Toshiba keeps it "supported" while its better-valued and higher-growth peers fall harder in the face of recent overall market weakness. 
Toshiba promised transparency on its privatisation process, and so far, it has delivered everything it promised. The next "transparency" likely comes in November. 


Toshiba (6502) Strong Vs Peers on No News Means Susceptible to Risk On Underperformance

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

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>The shares have rebounded by nearly 30% since the 1st of February. Consolidation seems likely while waiting for evidence that management's sales and profit targets can be met.</li>
<li>As Japan's No. 1 IT services company, Fujitsu should benefit from the ongoing digitalization of Japan's public and private sectors, the roll-out of 5G and the development of 6G.</li>
<li>Risks for investors include the weakening yen and economic slowdown. A history of IT system failures also raises a red flag.</li>
</ul>


The shares have rebounded by nearly 30% since the 1st of February. Consolidation seems likely while waiting for evidence that management's sales and profit targets can be met.
As Japan's No. 1 IT services company, Fujitsu should benefit from the ongoing digitalization of Japan's public and private sectors, the roll-out of 5G and the development of 6G.
Risks for investors include the weakening yen and economic slowdown. A history of IT system failures also raises a red flag.


Fujitsu (6702 JP): At Risk of Short-Term Profit Taking

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)

<ul>
<li>2022 is likely to be a very good year for semiconductors, with 6% revenue growth following outstanding 2021 growth of ~22%.</li>
<li>Demand is solid, and shortages are driving prices higher.  Since revenues are demand times price, all signs are positive.</li>
<li>The factors that caused the last collapse, in 2019, are not in place this time, indicating that a downturn is very unlikely.</li>
</ul>


2022 is likely to be a very good year for semiconductors, with 6% revenue growth following outstanding 2021 growth of ~22%.
Demand is solid, and shortages are driving prices higher.  Since revenues are demand times price, all signs are positive.
The factors that caused the last collapse, in 2019, are not in place this time, indicating that a downturn is very unlikely.


2022 High Conviction - Modest Semiconductor Growth

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/software-service-inc" target="_blank" data-smartkarma-citation="entities:16487:1" rel="noopener">Software Service (3733 JP)</a> business remained resilient to the pandemic. The company reported double-digit growth in top and bottom line in FY21, ahead of its guidance.</li>
<li>Management guided for mid-single-digit growth in revenue for FY22. With the scalability of the business, profit is growing at a faster pace than revenue.</li>
<li>Electronic medical record has a penetration of 45% in Japan’s hospital and Software Service holds second largest market share of 20%.</li>
</ul>



Software Service (3733 JP) business remained resilient to the pandemic. The company reported double-digit growth in top and bottom line in FY21, ahead of its guidance.
Management guided for mid-single-digit growth in revenue for FY22. With the scalability of the business, profit is growing at a faster pace than revenue.
Electronic medical record has a penetration of 45% in Japan’s hospital and Software Service holds second largest market share of 20%.


Software Service (3733 JP): Resilient Business Model; Starting FY22 with a Strong Order Book

Equity Long-Short Analyst

Pyari Menon

<ul>
<li>The companies that are best positioned to take advantage of the 5G growth are a mix of equipment vendors, chipset companies, device makers, and enterprise solution providers. </li>
<li>The top ten companies to benefit from 5G rollout based on innovation and citation count are <strong>Samsung Electronics, Qualcomm, LG Electronics, AT&amp;T, Huawei, Intel, Google, Ericsson, Apple,</strong> and <strong>Nokia </strong>
</li>
<li>A stand-out in 5G technology rankings is <a href="https://www.smartkarma.com/entities/lg-electronics-inc" target="_blank" data-smartkarma-citation="entities:8814:1" rel="noopener">LG Electronics (066570 KS)</a> which is punching well above its current market share in the industry. </li>
</ul>


The companies that are best positioned to take advantage of the 5G growth are a mix of equipment vendors, chipset companies, device makers, and enterprise solution providers. 
The top ten companies to benefit from 5G rollout based on innovation and citation count are Samsung Electronics, Qualcomm, LG Electronics, AT&amp;T, Huawei, Intel, Google, Ericsson, Apple, and Nokia 

A stand-out in 5G technology rankings is LG Electronics (066570 KS) which is punching well above its current market share in the industry. 


Stock Ideas from Data Mining Technical Publications: A Look at 5G

Japan

Fujitsu Ltd manufactures semiconductor, computer, and communication equipment. The Company provides comprehensive information technology, network and telecommunication solutions, and Internet services.

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Fujitsu Ltd (6702 JP)

Toshiba (6502) Strong Vs Peers on No News Means Susceptible to Risk On Underperformance

Weak earnings/forecasts and 3yr highs vs Peers make Toshiba's relative valuation un-compelling. Lack of near-term news means on a risk-on rebound,...

Travis Lundy

Fujitsu (6702 JP): At Risk of Short-Term Profit Taking

Fujitsu is geared to digitalization at Japanese government and corporate offices. But the shares are up nearly 30% since February 1. Take profits...

Scott Foster

2022 High Conviction - Modest Semiconductor Growth

Can today's semiconductor revenue growth continue, or will the market undergo another collapse? Objective Analysis calls for 6% growth, and shows...

Jim Handy

Software Service (3733 JP): Resilient Business Model; Starting FY22 with a Strong Order Book

Software Service started FY22 with 72% and 99%, y/y increase in monthly revenue and order for November, respectively. 45% EMR penetration in Japan...

Tina Banerjee

Stock Ideas from Data Mining Technical Publications: A Look at 5G

5G connectivity is expected to spawn new business and services across sectors. We review the technological positioning of companies competing in...

Pyari Menon

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