Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>We highlight five stocks that we have talked about in the past year</li>
<li>We continue to like small cap GROWTH and we think that decarbonization will remain a key thematic</li>
<li>NEC is a standout value name where we see a potential catalyst over the coming year in Open RAN</li>
</ul>


We highlight five stocks that we have talked about in the past year
We continue to like small cap GROWTH and we think that decarbonization will remain a key thematic
NEC is a standout value name where we see a potential catalyst over the coming year in Open RAN


<ul>
<li>OVERSEAS:  SPX down 4 in a row, -20%YTD;  Higher UST Yields and Negative Homebuilder print pressure equities; Chief Twit's followers want him out;  China hints strong economic support in 2023</li>
<li>JAPAN:  BOJ to stay pat; JP FY23 Budget largest ever; Kawasaki Kisen to lift ShrHldr Returns; Subaru gives up on PHVs;  Toyota CEO thinks mkt not ready for EVs</li>
<li>DAILY NUGGET: We take a look at the upcoming boom in Hydrogen in the push to decarbonise; Our preferred play is MHI (7011)</li>
</ul>


OVERSEAS:  SPX down 4 in a row, -20%YTD;  Higher UST Yields and Negative Homebuilder print pressure equities; Chief Twit's followers want him out;  China hints strong economic support in 2023
JAPAN:  BOJ to stay pat; JP FY23 Budget largest ever; Kawasaki Kisen to lift ShrHldr Returns; Subaru gives up on PHVs;  Toyota CEO thinks mkt not ready for EVs
DAILY NUGGET: We take a look at the upcoming boom in Hydrogen in the push to decarbonise; Our preferred play is MHI (7011)


Good Morning Japan | No Shortage of Equity Negative News; BOJ to Stay Pat; Bullish 2023 ?

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>The <a href="https://asia.nikkei.com/Spotlight/Toshiba-in-turmoil/Toshiba-buyout-JIP-led-group-secures-8.8bn-loans-from-megabanks" target="_blank" rel="noopener">Nikkei reports</a> that Japan Industrial Partners (JIP), the preferred bidder, has secured bank financing of around JPY1.2 trillion (US$8.8 billion), conditional on <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a> selling some businesses.</li>
<li>JIP will table an offer valuing Toshiba at JPY2.2 trillion (US$16 billion). The special committee is assessing the proposal and a final decision will be made at a board meeting.</li>
<li>JIP’s next challenge is getting the committee to recommend the offer. While a potential offer of JPY5,100 is not terrible, it is well below the original bid expectation of JPY6,000.</li>
</ul>


The Nikkei reports that Japan Industrial Partners (JIP), the preferred bidder, has secured bank financing of around JPY1.2 trillion (US$8.8 billion), conditional on Toshiba Corp (6502 JP) selling some businesses.
JIP will table an offer valuing Toshiba at JPY2.2 trillion (US$16 billion). The special committee is assessing the proposal and a final decision will be made at a board meeting.
JIP’s next challenge is getting the committee to recommend the offer. While a potential offer of JPY5,100 is not terrible, it is well below the original bid expectation of JPY6,000.


Toshiba (6502 JP): Securing Financing Helps Sentiment but Hurdles Remain

<ul>
<li>OVERSEAS: Fed Pivots - Powell unleashes his inner VOLCKER with hawkish comments; Rates fall ; USD falls; Equities on recession fears; GS to cuts bonuses;  Massive Nuclear Fusion breakthrough</li>
<li>JAPAN:  NKY Futs -0.9% vs Cash; USDJPY ¥135.4 - stable post Fed move;  BOJ review in 2023- wages key; Struggles in financings Defense spending; JP companies ramping Darbonization spending. </li>
<li>DAILY NUGGET: We look at why Nuclear Fusion matters in light of the recent breakthrough. This is a BIG DEAL.</li>
</ul>


OVERSEAS: Fed Pivots - Powell unleashes his inner VOLCKER with hawkish comments; Rates fall ; USD falls; Equities on recession fears; GS to cuts bonuses;  Massive Nuclear Fusion breakthrough
JAPAN:  NKY Futs -0.9% vs Cash; USDJPY ¥135.4 - stable post Fed move;  BOJ review in 2023- wages key; Struggles in financings Defense spending; JP companies ramping Darbonization spending. 
DAILY NUGGET: We look at why Nuclear Fusion matters in light of the recent breakthrough. This is a BIG DEAL.


Good Morning Japan | Markets Hear "RECESSION"

<ul>
<li>OVERSEAS:  Soft CPI Print - Fed Pause in sight, Equities rip; Swap markets now at 25bp hikes;  Record UAL-Boeing deal for planes;  Co-founder of FTX, SBF arrested (finally)</li>
<li>JAPAN:  NKY Futs flat % vs Cash; USDJPY 135 handle; Govt to introduce Carbon Trading;  FOR &gt;AGAINST in latest Nuke Power Poll;  Apple deeply invested in Japan</li>
<li>DAILY NUGGET: APPLE and Japan supply chain - an already deep relationship set to expand further.</li>
</ul>


OVERSEAS:  Soft CPI Print - Fed Pause in sight, Equities rip; Swap markets now at 25bp hikes;  Record UAL-Boeing deal for planes;  Co-founder of FTX, SBF arrested (finally)
JAPAN:  NKY Futs flat % vs Cash; USDJPY 135 handle; Govt to introduce Carbon Trading;  FOR &gt;AGAINST in latest Nuke Power Poll;  Apple deeply invested in Japan
DAILY NUGGET: APPLE and Japan supply chain - an already deep relationship set to expand further.


Good Morning Japan | Soft(Er) CPI; Fed Pause Sealed; Equities Rip..then the FADE

Japan

FANUC CORPORATION manufactures factory automation (FA) systems and equipments, and robots. The Company's products include computerized numerically-controlled (CNC) equipment, servo motors, laser systems, industrial robots, wire-cut electric discharge machines, and CNC drill.  Fanuc participates in a joint venture with General Electric in the FA field.

KOMATSU LTD. manufactures and sells construction and mining machinery, including excavators, bulldozers, and wheel loaders.  The Company, operating on a global scale, also produces forklift trucks and engineering equipment such as press system.

KUBOTA CORPORATION manufactures industrial machinery, farm machinery, and fluid piping systems.  The Company's products include ductile iron pipes, engines, tractors, combine harvesters, reaper binders, rice planters, and excavators.  Kubota also produces forged iron products, housing equipment, and environmental control plants.

SMC CORPORATION manufactures directional control devices such as power, hand, and air valves.  The Company also produces air filters, cylinders, and actuators along with other pneumatic equipment.  SMC seeks to become a comprehensive maker of automated equipment through the market demand of information and communications products.

KOMATSU LTD. manufactures and sells construction and mining machinery, including excavators, bulldozers, and wheel loaders. The Company, operating on a global scale, also produces forklift trucks and engineering equipment such as press system.

KUBOTA CORPORATION manufactures industrial machinery, farm machinery, and fluid piping systems. The Company's products include ductile iron pipes, engines, tractors, combine harvesters, reaper binders, rice planters, and excavators. Kubota also produces forged iron products, housing equipment, and environmental control plants.

EBARA CORPORATION manufactures pneumatic and hydraulic pumps and related equipment.  The Company's products include fuel, oil, water, and firefighting pumps, as well as steam turbines and boilers.  Ebara Corporation also engineers garbage incinerators, smoke desulfurizers, and other products related to environmental technology.

Minebea Mitsumi manufactures and markets miniature and instrument ball bearings.  The Company also makes DC motors, servo motors, stepping motors, spindle motors, pivot assemblies, rod-end and spherical bearings, fasteners, and computer keyboards. Minebea Mitsumi has production facilities in Thailand and Singapore.

Kawasaki Heavy Industries, Ltd. designs, develops, and manufactures transport equipment and industrial heavy machinery for military and commercial use.  The Company produces ships, railroad cars, aircraft engines and parts, hydraulic and gas turbines, submarine engines, boilers, and industrial robots.  Kawasaki Heavy Industries offers engineering and construction services to industrial plants.

DAIFUKU CO., LTD. designs, manufactures, and sells material handling equipment such as automated storage systems, conveyors, and automatic sorters.  The Company's products are used for automation in manufacturing and distribution businesses.

CRRC Corporation Limited manufactures rolling stock products. The Company produces locomotives, passenger carriages, freight wagons, vehicles key components, and other products. CRRC also provides vehicle repairing, investment management, and other services.

Stanley Black & Decker Inc. is a diversified global provider of hand tools, power tools and related accessories, mechanical access and electronic security solutions, healthcare solutions, engineered fastening systems, and more.

Graco Inc. supplies technology for the management of fluids in both industrial and commercial applications.  The Company designs, manufactures, and markets systems to move, measure, control, dispense, and apply fluid materials.  Graco's products are used for applying paints and coatings, high-pressure cleaning of equipment, and lubricating and maintaining vehicles and other equipment.

China CSSC Holdings Ltd. offers shipbuilding, ship components, ship repairing and diesel engines manufacturing. The Company distributes its products within the domestic market and to overseas markets.

Nordson Corporation designs, manufactures, and markets systems that apply adhesives, sealants, and coatings to consumer and industrial products during manufacturing operations.  The Company's products include customized electronic controls for the precise application and curing of materials to meet customers' requirements.  Nordson operates around the world.

China Shipbuilding Industry Company Limited designs, manufactures, sells and leases ship parts.  The Company's products include engines and parts, auxiliay engines and transportation equipment.

Parker-Hannifin Corporation manufactures motion control products, including fluid power systems, electromechanical controls, and related components.  The Company also produces fluid purification, fluid flow, process instrumentation, air conditioning, refrigeration, and electromagnetic shielding and thermal management products.

Cummins India Limited manufactures internal combustion engines, including diesel, reciprocating piston, gas turbine and gasoline engines. The Company also manufactures generating sets and public transport-type passenger motor vehicles, including luxury coaches and air-field buses.  In addition, Cummins India Ltd. operates a computerized and fully-equipped research and development facility.

IDEX Corporation designs, manufactures, and markets a variety of pump products, dispensing equipment, and other engineered products.  The Company's products include industrial pumps, lubrication systems, banding and clamping devices, and rescue tools.  IDEX markets its products to customers in the United States and overseas.

Xylem, Inc. is a designer, manufacturer, equipment and service provider for water and wastewater applications addressing the full-cycle of water from collection, distribution, and use to the return of water to the environment. The Company's products include water and wastewater pumps, treatment and testing equipment, industrial pumps, valves, heat exchangers, and dispensing equipment.

Mitsubishi Heavy Industries, Ltd. is a comprehensive heavy machinery maker. The Company manufactures machinery, ships, turbines and engines, prime movers, aircrafts, and machine parts for military and commercial use.  Mitsubishi Heavy Industries also researches and develops nuclear power plants.

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Mitsubishi Heavy Industries (7011 JP)

Five Japanese Stocks to Watch in 2023

We highlight 5 Japanese companies that investors should watch in 2023. We continue to see investment opportunities under the theme of decarbonization

Mark Chadwick

Good Morning Japan | No Shortage of Equity Negative News; BOJ to Stay Pat; Bullish 2023 ?

Good Morning Japan: We strive to provide the best macro, stock and thematic overnight news that impacts your trading day in Japan. FOLLOW TO KEEP...

Mark Chadwick

Toshiba (6502 JP): Securing Financing Helps Sentiment but Hurdles Remain

Against all odds, JIP has secured financing which helps to support near-term positive sentiment. Securing Board and shareholder approval for the...

Arun George

Good Morning Japan | Markets Hear "RECESSION"

Good Morning Japan: We strive to provide the best macro, stock and thematic overnight news that impacts your trading day in Japan. FOLLOW TO KEEP...

Mark Chadwick

Good Morning Japan | Soft(Er) CPI; Fed Pause Sealed; Equities Rip..then the FADE

Good Morning Japan: We strive to provide the best macro, stock and thematic overnight news that impacts your trading day in Japan. FOLLOW TO KEEP...

Mark Chadwick

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