Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Nintendo's share price fell ~6% on rumours of Switch 2 delay, wiping around $4 billion of the market cap</li>
<li>We do not believe that a one quarter delay will have any impact on the console's long-term sell-through or the stock's valuation</li>
<li>With Sony's PS5 faltering, Nintendo is launching at an opportune time. We turn bullish on the stock with ~25% upside from here</li>
</ul>


Nintendo's share price fell ~6% on rumours of Switch 2 delay, wiping around $4 billion of the market cap
We do not believe that a one quarter delay will have any impact on the console's long-term sell-through or the stock's valuation
With Sony's PS5 faltering, Nintendo is launching at an opportune time. We turn bullish on the stock with ~25% upside from here


Nintendo (7974) | Delayed...Or Just Fashionably Late

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

<ul>
<li>Nintendo's Q2 results show solid performance but still fall short of expectations, with a conservative full-year profit outlook</li>
<li>The impending release of "Switch 2" in 2H24 raises questions about the company's ability to replicate the original Switch's success</li>
<li>We see the current 11x EV/EBIT as fair for the stock and do not anticipate a valuation breakout until the market can assess the credentials of "Switch 2"</li>
</ul>


Nintendo's Q2 results show solid performance but still fall short of expectations, with a conservative full-year profit outlook
The impending release of "Switch 2" in 2H24 raises questions about the company's ability to replicate the original Switch's success
We see the current 11x EV/EBIT as fair for the stock and do not anticipate a valuation breakout until the market can assess the credentials of "Switch 2"


Nintendo (7974) | Stock Performance Ahead 'Switch 2' Speculation

Mitsubishi UFJ Financial (MUFG) / Event-Driven

<ul>
<li>Following up on our earlier cross-shareholding notes, in this note we look at <a href="https://www.smartkarma.com/entities/mitsubishi-ufj-financial-group" target="_blank" data-smartkarma-citation="entities:218:1" rel="noopener">Mitsubishi UFJ Financial (MUFG) (8306 JP)</a>’s cross-shareholding.</li>
<li>MUFG had a stake over US$100m in at least 47 listed Japanese stocks, amounting to a total of around US$19bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


Following up on our earlier cross-shareholding notes, in this note we look at Mitsubishi UFJ Financial (MUFG) (8306 JP)’s cross-shareholding.
MUFG had a stake over US$100m in at least 47 listed Japanese stocks, amounting to a total of around US$19bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


MUFG Cross-Shareholding - At Least US$20bn of Cross-Shareholding to Sell, Taking It Slow

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) | Delayed...Or Just Fashionably Late

Nintendo's share price drops on Switch 2 delay rumors, but long-term outlook remains strong with bullish sentiment and potential 25% upside.

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

Nintendo (7974) | Stock Performance Ahead 'Switch 2' Speculation

Nintendo's Q2 results were okay, but full year guidance still short. The lack of normal share price cyclicality could limit the impact of the...

Mark Chadwick

MUFG Cross-Shareholding - At Least US$20bn of Cross-Shareholding to Sell, Taking It Slow

Following up on our earlier cross-shareholding notes, in this note we look at MUFG (8306 JP)’s cross-shareholding. MUFG had a stake of over US$100m...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Nintendo (7974) | Delayed...Or Just Fashionably Late

​Nintendo's share price drops on Switch 2 delay rumors, but long-term outlook remains strong with bullish sentiment and potential 25% upside.

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

Nintendo (7974) | Stock Performance Ahead 'Switch 2' Speculation

​Nintendo's Q2 results were okay, but full year guidance still short. The lack of normal share price cyclicality could limit the impact of the...

Mark Chadwick

MUFG Cross-Shareholding - At Least US$20bn of Cross-Shareholding to Sell, Taking It Slow

Following up on our earlier cross-shareholding notes, in this note we look at MUFG (8306 JP)’s cross-shareholding. MUFG had a stake of over US$100m...

Sumeet Singh

Nintendo's share price drops on Switch 2 delay rumors, but long-term outlook remains strong with bullish sentiment and potential 25% upside.

Nintendo's Q2 results were okay, but full year guidance still short. The lack of normal share price cyclicality could limit the impact of the...