Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Nintendo missed Q1 with Operating income coming in at Y54.5b (-71% YoY) vs our estimate Y116b and the street at Y94b</li>
<li>Switch 2 hardware and software units sold are now suffering from buyer fatigue as consumers await the next-gen console</li>
<li>The stock will likely fall quite sharply over the next week. Looking for good buying opportunity in anticipation of the next console cycle</li>
</ul>


Nintendo missed Q1 with Operating income coming in at Y54.5b (-71% YoY) vs our estimate Y116b and the street at Y94b
Switch 2 hardware and software units sold are now suffering from buyer fatigue as consumers await the next-gen console
The stock will likely fall quite sharply over the next week. Looking for good buying opportunity in anticipation of the next console cycle


<ul>
<li>Operating profit: FY3/24 OP was 529 billion yen (+4.9% YoY) vs analyst estimates of 537 billion (1.5% miss)</li>
<li>FY3/25 Operating guidance is 400 billion yen, significantly below analyst expectations of 480 billions (-16% miss).</li>
<li>The initial market reaction may be negative, we would use that as an opportunity to buy into the stock for the cyclical upturn in FY3/26.</li>
</ul>


Operating profit: FY3/24 OP was 529 billion yen (+4.9% YoY) vs analyst estimates of 537 billion (1.5% miss)
FY3/25 Operating guidance is 400 billion yen, significantly below analyst expectations of 480 billions (-16% miss).
The initial market reaction may be negative, we would use that as an opportunity to buy into the stock for the cyclical upturn in FY3/26.


Nintendo (7974) | Negative Surprise....Not Really

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Last May I proposed a model for thinking about the appropriate discount of <a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto (8369 JP)</a> vs its giant equity portfolio and small operations. It was a sell.</li>
<li>In December, the bank changed its shareholder return ratio, which indicated less value destruction, and tighter appropriate discount. The shares rallied and discount narrowed. </li>
<li>Now the Shares Adjusted for Banking Ops Valuation have seen the discount to After-Tax Equity Portfolio Valuation widen sharply in the past 10 days. So here's the hedging model.</li>
</ul>


Last May I proposed a model for thinking about the appropriate discount of Bank of Kyoto (8369 JP) vs its giant equity portfolio and small operations. It was a sell.
In December, the bank changed its shareholder return ratio, which indicated less value destruction, and tighter appropriate discount. The shares rallied and discount narrowed. 
Now the Shares Adjusted for Banking Ops Valuation have seen the discount to After-Tax Equity Portfolio Valuation widen sharply in the past 10 days. So here's the hedging model.


Bank of Kyoto (8369) - A Complicated Risk Model Clarified

Equity Capital Markets

FineToday Holdings Co Ltd / Equity Capital Markets

<ul>
<li>CVC Capital is aiming to raise over US$500m, via selling some of its stake in <a href="https://www.smartkarma.com/entities/finetoday-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:44092:1" rel="noopener">FineToday Holdings Co Ltd (289A JP)</a> in Japan.</li>
<li>FineToday (FT) is a beauty and personal care company in Asia offering a range of products, including hair care, skin care and body care products.</li>
<li>In this note, we talk about the positive aspects of the deal.</li>
</ul>


CVC Capital is aiming to raise over US$500m, via selling some of its stake in FineToday Holdings Co Ltd (289A JP) in Japan.
FineToday (FT) is a beauty and personal care company in Asia offering a range of products, including hair care, skin care and body care products.
In this note, we talk about the positive aspects of the deal.


FineToday Pre-IPO - The Positives - Established Brands Across Multiple Regions

Japan

Nintendo Co., Ltd. globally develops, manufactures and sells home-use video game hardware and software in home entertainment business.  The company also produces home-game products including cards.

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Nintendo (7974 JP)

Nintendo (7974) | Game Over for Switch

Nintendo's Q1 operating income missed estimates, with Switch sales slowing due to buyer fatigue. Stock expected to drop, but potential buying...

Mark Chadwick

Nintendo (7974) | Negative Surprise....Not Really

Nintendo to Report Q1 (02 Aug); Shares Up 4% Since FY3/24 Results First Quarter - Operating income estimate Y116b vs street Y94b - Net sales...

Mark Chadwick

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

Bank of Kyoto (8369) - A Complicated Risk Model Clarified

The Bank of Kyoto (8369) model is clarified so dynamic hedging ratios depend on regional bank PBRs. The model suggests it's at the cheap end of its...

Travis Lundy

FineToday Pre-IPO - The Positives - Established Brands Across Multiple Regions

CVC Capital is aiming to raise over US$500m, via selling some of its stake in FineToday Holdings Co Ltd (289A JP) in Japan. In this note, we talk...

Sumeet Singh

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52-week Range

Market Cap (USDm)

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Nintendo (7974) | Game Over for Switch

​Nintendo's Q1 operating income missed estimates, with Switch sales slowing due to buyer fatigue. Stock expected to drop, but potential buying...

Mark Chadwick

Nintendo (7974) | Negative Surprise....Not Really

Nintendo to Report Q1 (02 Aug); Shares Up 4% Since FY3/24 Results First Quarter - Operating income estimate Y116b vs street Y94b - Net sales...

Mark Chadwick

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

Bank of Kyoto (8369) - A Complicated Risk Model Clarified

The Bank of Kyoto (8369) model is clarified so dynamic hedging ratios depend on regional bank PBRs. The model suggests it's at the cheap end of its...

Travis Lundy

FineToday Pre-IPO - The Positives - Established Brands Across Multiple Regions

CVC Capital is aiming to raise over US$500m, via selling some of its stake in FineToday Holdings Co Ltd (289A JP) in Japan. In this note, we talk...

Sumeet Singh

Nintendo's Q1 operating income missed estimates, with Switch sales slowing due to buyer fatigue. Stock expected to drop, but potential buying...