Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

Equity Bottom-Up

<ul><li>India is limiting Chinese participation in Indian subsidiaries while seeking investments from Taiwan, diversifying its economic ties.</li><li>AWS is committing significant funds to establish data centers in Taiwan, anticipating obstacles in securing renewable energy sources.</li><li>Elephantech is seeking collaborators to scale up their eco-friendly PCB manufacturing operations to meet the escalating demand. Join the sustainable production movement.</li></ul>

India is limiting Chinese participation in Indian subsidiaries while seeking investments from Taiwan, diversifying its economic ties.AWS is committing significant funds to establish data centers in Taiwan, anticipating obstacles in securing renewable energy sources.Elephantech is seeking collaborators to scale up their eco-friendly PCB manufacturing operations to meet the escalating demand. Join the sustainable production movement.

Tech Supply Chain Tracker (14-Jun-2024): India limits Chinese participation, woos Taiwanese investments.

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>The Nikkei surged over 2,200 points, or +6.6%, this week, outperforming global markets </li>
<li>Strong results from Fast Retailing (+13% wow) and a sharp move higher for gaming heavyweight Nintendo (+13%) key stocks behind the index move</li>
<li>Activist Dalton and its listed fund have been very active in the past week, adding to seventeen positions</li>
</ul>


The Nikkei surged over 2,200 points, or +6.6%, this week, outperforming global markets 
Strong results from Fast Retailing (+13% wow) and a sharp move higher for gaming heavyweight Nintendo (+13%) key stocks behind the index move
Activist Dalton and its listed fund have been very active in the past week, adding to seventeen positions


Japan Weekly | Market on Fire; Dalton Deploying Dollars

<ul>
<li>Topix fell 2.3% due to Wall Street losses as Jerome Powell cited high inflation, and global stocks were pressured by surging bond yields.</li>
<li>Major Movers: Small-cap, high growth stocks got killed, especially on any slight earnings miss. Consumer staples, regional banks outperformed</li>
<li>Activist Watch: Investors lifting stakes in Rinnai (-3.4%), Topcon (+1.6%) and Kureha (+1%); Yaizu Suisan's outcome remains uncertain after a failed tender offer</li>
</ul>


Topix fell 2.3% due to Wall Street losses as Jerome Powell cited high inflation, and global stocks were pressured by surging bond yields.
Major Movers: Small-cap, high growth stocks got killed, especially on any slight earnings miss. Consumer staples, regional banks outperformed
Activist Watch: Investors lifting stakes in Rinnai (-3.4%), Topcon (+1.6%) and Kureha (+1%); Yaizu Suisan's outcome remains uncertain after a failed tender offer


Japan Weekly | Stocks Sink; Activists Lift Stakes in Rinnai, Topcon, Kureha

<ul>
<li>Market Watch: This week, the Topix Index gained 44pts (2%) to close at 2,309, influenced by Wall Street's response to US inflation data and expectations of extended elevated interest rates.</li>
<li>Major Movers: Lasertec (6920) surged +17%, Fast Retailing (9983) rose +12%, and Monotaro (3064) declined -18%</li>
<li>Activist Watch: ValueAct lifted its stake in Topcon. I like the LT fundamentals for the company and look forward to positive dialogue with the activist</li>
</ul>


Market Watch: This week, the Topix Index gained 44pts (2%) to close at 2,309, influenced by Wall Street's response to US inflation data and expectations of extended elevated interest rates.
Major Movers: Lasertec (6920) surged +17%, Fast Retailing (9983) rose +12%, and Monotaro (3064) declined -18%
Activist Watch: ValueAct lifted its stake in Topcon. I like the LT fundamentals for the company and look forward to positive dialogue with the activist


Japan Weekly | Lasertec, Fast Retailing, Monotaro, Topcon

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

<div style="text-align: center;"><strong>• NET GAIN • </strong></div><div><div class="content-caption">
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/590/original/2021-02-19_07-20-52.png?1613686864" class="editor-image img-responsive" data-smartkarma-image-id="189590"></figure><p></p></section> Source for all charts &amp; tables: Japan Analytics</div></div><div>
<p><strong>NET GAIN</strong> - Forecast Aggregate Net Income for the universe of  Japanese listed companies ended the quarter 23.8%  higher than three months ago - an increase of  ¥5.2 trillion. As a result, the market's forward earnings multiple has declined to 28 times following a 10% increase in total market value (ex REITs). The increase in forecast operating income is a more modest 10.2% reflecting the degree of previously-projected COVID-related extraordinary losses.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/591/original/2021-02-19_07-29-59.png?1613687413" class="editor-image img-responsive" data-smartkarma-image-id="189591"></figure></section><p><strong>TRAILING TWELVE MONTHS (TTM)</strong> - Trailing revenues and operating profits are still falling by 9.9% and 26.3%, respectively; however, operating income rose by 4.1% quarter-on-quarter as margins improved by 30 basis points. Despite a reasonable effort at cost-cutting, aggregate operating margins are still  228 bps below their mid-2018 peak, and it will take at least another eight quarters for that gap to be closed.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/595/original/2021-02-19_07-38-34.png?1613687927" class="editor-image img-responsive" data-smartkarma-image-id="189595"></figure></section><p><strong>FORECASTS</strong> - The majority of companies are forecasting for the year ending next month. Despite no change in the aggregate revenue forecast, the outlook for operating income increased by ¥3.7 trillion during the quarter resulting in a 50 bps operating margin uplift. </p>
</div><section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/596/original/2021-02-19_07-40-09.png?1613688021" class="editor-image img-responsive" data-smartkarma-image-id="189596"></figure><hr></section><p><strong>POSITIVE MOMENTUM</strong> - Both our forward-looking Results Score and Results &amp; Revision Score have returned to the positive after less than one year. Whether this merits a new thirty-year high in TOPIX is, however, a moot point. We would note that the Cabinet Office Leading Indicator of Business Conditions for December turned down for the first time since April 2020.   </p></section><div></div><div>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/597/original/2021-02-19_08-02-24.png?1613689355" class="editor-image img-responsive" data-smartkarma-image-id="189597"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/694/original/2021-02-19_16-02-06.png?1613718138" class="editor-image img-responsive" data-smartkarma-image-id="189694"></figure><hr></section><p><strong>SECTOR BREAKDOWN</strong> - The leading sectors in terms of one-month change in Results &amp; Revision Score are <strong>Other Commercial Products</strong>, <strong>Autos</strong>,<strong> Other Consumer Products</strong>, <strong>Metals</strong>, and <strong>Building Materials.</strong> The RRS 'losers' are <strong>Utilities</strong>, <strong>Internet Content &amp; Services</strong>, <strong>Food, Beverages &amp; Tobacco,</strong><strong>Retail</strong>, and <strong>Healthcare</strong>.  </p>
</div><div>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/700/original/2021-02-19_16-05-32.png?1613718344" class="editor-image img-responsive" data-smartkarma-image-id="189700"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/701/original/2021-02-19_16-06-12.png?1613718383" class="editor-image img-responsive" data-smartkarma-image-id="189701"></figure></section><hr>
</div><section></section><div><div>
<p>In the <strong>DETAIL</strong> section below, we shall review the actual results and initial and revised forecasts by Sector and highlight the best and worst-performing companies by one-quarter revenue and margin changes.</p>
<hr>
<p></p>
</div></div>

• NET GAIN • 
 Source for all charts &amp; tables: Japan Analytics
NET GAIN - Forecast Aggregate Net Income for the universe of  Japanese listed companies ended the quarter 23.8%  higher than three months ago - an increase of  ¥5.2 trillion. As a result, the market's forward earnings multiple has declined to 28 times following a 10% increase in total market value (ex REITs). The increase in forecast operating income is a more modest 10.2% reflecting the degree of previously-projected COVID-related extraordinary losses.
TRAILING TWELVE MONTHS (TTM) - Trailing revenues and operating profits are still falling by 9.9% and 26.3%, respectively; however, operating income rose by 4.1% quarter-on-quarter as margins improved by 30 basis points. Despite a reasonable effort at cost-cutting, aggregate operating margins are still  228 bps below their mid-2018 peak, and it will take at least another eight quarters for that gap to be closed.
FORECASTS - The majority of companies are forecasting for the year ending next month. Despite no change in the aggregate revenue forecast, the outlook for operating income increased by ¥3.7 trillion during the quarter resulting in a 50 bps operating margin uplift. 
POSITIVE MOMENTUM - Both our forward-looking Results Score and Results &amp; Revision Score have returned to the positive after less than one year. Whether this merits a new thirty-year high in TOPIX is, however, a moot point. We would note that the Cabinet Office Leading Indicator of Business Conditions for December turned down for the first time since April 2020.   
SECTOR BREAKDOWN - The leading sectors in terms of one-month change in Results &amp; Revision Score are Other Commercial Products, Autos, Other Consumer Products, Metals, and Building Materials. The RRS 'losers' are Utilities, Internet Content &amp; Services, Food, Beverages &amp; Tobacco,Retail, and Healthcare.  



In the DETAIL section below, we shall review the actual results and initial and revised forecasts by Sector and highlight the best and worst-performing companies by one-quarter revenue and margin changes.




🇯🇵 JAPAN • IT’S A WRAP - Winter 2020 Results & Revisions Review

Japan

Topcorn Corporation manufactures and sells measuring equipment and medical equipment primarily for ophthalmologist use. The Company also manufactures industrial products including projectors and optical devices.

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Topcon Corp (7732 JP)

Tech Supply Chain Tracker (14-Jun-2024): India limits Chinese participation, woos Taiwanese investments.

India is pushing for restrictions on Chinese involvement, Taiwan is attracting investments, AWS is investing in Taiwan data centers, Elephantech...

Tech Supply Chain Tracker

Japan Weekly | Market on Fire; Dalton Deploying Dollars

Nikkei outperforms global markets with a 6.6% surge, driven by strong performances from Fast Retailing and Nintendo, while activist Dalton adds to...

Mark Chadwick

Japan Weekly | Stocks Sink; Activists Lift Stakes in Rinnai, Topcon, Kureha

Wall Street losses and concerns over inflation led to a 2.3% drop in Topix, while small-cap stocks suffered. Activist investors increased their...

Mark Chadwick

Japan Weekly | Lasertec, Fast Retailing, Monotaro, Topcon

Topix Index rises despite US inflation data and expectations for higher interest rates. Lasertec and Fast Retailing see gains, while Monotaro...

Mark Chadwick

🇯🇵 JAPAN • IT’S A WRAP - Winter 2020 Results & Revisions Review

NET GAIN - Forecast Aggregate Net Income for the universe of Japanese listed companies ended the quarter 23.8% higher than three months ago - an...

Campbell Gunn

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Tech Supply Chain Tracker (14-Jun-2024): India limits Chinese participation, woos Taiwanese investments.

India is pushing for restrictions on Chinese involvement, Taiwan is attracting investments, AWS is investing in Taiwan data centers, Elephantech...

Tech Supply Chain Tracker

Japan Weekly | Market on Fire; Dalton Deploying Dollars

​Nikkei outperforms global markets with a 6.6% surge, driven by strong performances from Fast Retailing and Nintendo, while activist Dalton adds to...

Mark Chadwick

Japan Weekly | Stocks Sink; Activists Lift Stakes in Rinnai, Topcon, Kureha

​Wall Street losses and concerns over inflation led to a 2.3% drop in Topix, while small-cap stocks suffered. Activist investors increased their...

Mark Chadwick

Japan Weekly | Lasertec, Fast Retailing, Monotaro, Topcon

​Topix Index rises despite US inflation data and expectations for higher interest rates. Lasertec and Fast Retailing see gains, while Monotaro...

Mark Chadwick

🇯🇵 JAPAN • IT’S A WRAP - Winter 2020 Results & Revisions Review

NET GAIN - Forecast Aggregate Net Income for the universe of Japanese listed companies ended the quarter 23.8% higher than three months ago - an...

Campbell Gunn

Nikkei outperforms global markets with a 6.6% surge, driven by strong performances from Fast Retailing and Nintendo, while activist Dalton adds to...

Wall Street losses and concerns over inflation led to a 2.3% drop in Topix, while small-cap stocks suffered. Activist investors increased their...

Topix Index rises despite US inflation data and expectations for higher interest rates. Lasertec and Fast Retailing see gains, while Monotaro...