Small and mid-cap Asia, Thematic, Corporate Access, Glorious Day, Ltd.

Glorious Day Asia

Small and mid-cap Asia, Thematic, Corporate Access

Glorious Day, Ltd.

Equity Bottom-Up

Global Wafer (6488 TT): Purchase of Sun Edison Semi (Semi US) will move GWC to #3 global supplier and 17% market share, after Shin-Etsu and Sumco and ahead of Siltronics (Wacker Chemie). Semi wafer prices are set to show a modest rebound on industry consolidation and no material increases in industry capacity. Industry growth and market addressing synergies from the merger offset the lack of initial profit accretion.

Global Wafer (6488 TT): Purchase of Sun Edison Semi (Semi US) will move GWC to #3 global supplier and 17% market share, after Shin-Etsu and Sumco and ahead of Siltronics (Wacker Chemie). Semi wafer prices are set to show a modest rebound on industry consolidation and no material increases in industry capacity. Industry growth and market addressing synergies from the merger offset the lack of initial profit accretion.

Global Wafer Corp (6488 TT): Imminent Industry Consolidation a Positive; Company Visit Note Summary

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

NS Solutions (2327 JP) is a listed IT systems and services provider. It was originally the IT division for Nippon Steel but was spun out many years ago and now 86+% of its revenue comes from non-Nippon Steel customers (retail service, finance, telecommunication, public and academic service, etc). It recently conducted a large buyback.WHIY THIS REPORT? &nbsp;There is a chance NSSOL shareholders&nbsp;see "good news" substantially better than consensus expects when it reports on April 28 (scheduled for 11am Japan time).&nbsp;&nbsp;<ol><li>CONSENSUS MAY BE LOW: &nbsp;A study of seasonality of quarterly sales, gross profit, and net profit of the company over the past 12 years suggests the current consensus Q4 number is well off the average. Minimising divergence from historical patterns would mean Q4 is 42% higher than the current 3.1bn net profit estimate.&nbsp;</li><li>DIVIDENDS COULD BE BOOSTED: The company has maintained a payout ratio of 27% over the past 12 years (including this year's forecast 45 yen/share, but not including the buyback). The average is 31% over the past 8 years (in 2008 the payout ratio went above 20% and hasn't looked back since). Because earnings are up, and because share count is down, the stock could be in line for a HUGE dividend hike for fiscal 2016. <ul><li>Using consensus and a 25% payout ratio, next year's dividend&nbsp;would be 59&nbsp;yen/share.</li><li>At consensus EPS and 30%, it would be 70&nbsp;yen.&nbsp;</li><li>Normally the H1/interim dividend is announced at earnings (i.e. next Tuesday).</li></ul></li></ol>Readers may be better placed to know the fundamentals of the company and should decide on valuations themselves, but the numbers&nbsp;suggest there is&nbsp;a potential upside surprise here to some parts.

NS Solutions (2327 JP) is a listed IT systems and services provider. It was originally the IT division for Nippon Steel but was spun out many years ago and now 86+% of its revenue comes from non-Nippon Steel customers (retail service, finance, telecommunication, public and academic service, etc). It recently conducted a large buyback.WHIY THIS REPORT? &nbsp;There is a chance NSSOL shareholders&nbsp;see "good news" substantially better than consensus expects when it reports on April 28 (scheduled for 11am Japan time).&nbsp;&nbsp;CONSENSUS MAY BE LOW: &nbsp;A study of seasonality of quarterly sales, gross profit, and net profit of the company over the past 12 years suggests the current consensus Q4 number is well off the average. Minimising divergence from historical patterns would mean Q4 is 42% higher than the current 3.1bn net profit estimate.&nbsp;DIVIDENDS COULD BE BOOSTED: The company has maintained a payout ratio of 27% over the past 12 years (including this year's forecast 45 yen/share, but not including the buyback). The average is 31% over the past 8 years (in 2008 the payout ratio went above 20% and hasn't looked back since). Because earnings are up, and because share count is down, the stock could be in line for a HUGE dividend hike for fiscal 2016. Using consensus and a 25% payout ratio, next year's dividend&nbsp;would be 59&nbsp;yen/share.At consensus EPS and 30%, it would be 70&nbsp;yen.&nbsp;Normally the H1/interim dividend is announced at earnings (i.e. next Tuesday).Readers may be better placed to know the fundamentals of the company and should decide on valuations themselves, but the numbers&nbsp;suggest there is&nbsp;a potential upside surprise here to some parts.

NS Solutions (2327 JP): Quantitative  EPS surprise? Arithmetic potential for a huge div hike?

Japan

NS Solutions Corporation operates system consulting services and proposal of solutions.  The Company also manages operation and maintenance of engineering systems and develops software.

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NS Solutions (2327 JP)

Global Wafer Corp (6488 TT): Imminent Industry Consolidation a Positive; Company Visit Note Summary

Global Wafer (6488 TT): Purchase of Sun Edison Semi (Semi US) will move GWC to #3 global supplier and 17% market share, after Shin-Etsu and Sumco...

Glorious Day Asia

NS Solutions (2327 JP): Quantitative EPS surprise? Arithmetic potential for a huge div hike?

NS Solutions (2327 JP) is a listed IT systems and services provider. It was originally the IT division for Nippon Steel but was spun out many years...

Travis Lundy

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