Materials Analyst/Strategist, Janus Analysis

Gaius King

Materials Analyst/Strategist

Accelerating Tomorrow’s Independent Research

Boost Research

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Thematic (Sector/Industry)

<ul>
<li>Quantifying nuclear statistics with substantial discrepancies</li>
<li>LT contracts &amp; speculative hoarding driving recent 40% spot price increase</li>
<li>Primary/secondary Uranium supplies currently 112% of 2017 demand</li>
<li>Uranium supply deficits extremely unlikely before 2022</li>
<li>Global Uranium demand to fall 25-40% by 2050</li>
<li> Primary Uranium sector LT SELL</li>
</ul>
We have independently audited global nuclear construction statistics in order to determine future Uranium demand.  Although near-term statistics match those in the public domain, long-term demand determined via construction pipeline illustrates substantial discrepancies.  Compiling planned plant construction, operational extensions, nameplate upgrades, versus decommissioning announcements/events, and in many cases, public policy inertia; has led us to believe that despite historical primary supply shortages, global nuclear demand peaked in 2006.
Since plateauing and despite strong Chinese growth, nuclear power generation has fallen &lt;2% over the past two decades, a decline that is predicted to accelerate as a number of developed and developing nations pursue other energy options.
The macro-trend not replacing existing nuclear infrastructure means (dependent on assumptions), according to our calculations, global uranium demand will decrease between 20 to 40% by 2050.
As opposed to signifying a fundamental change in underlying demand, we believe that recent Uranium price increases are the result of producers closing primary operations, and substituting production with purchases on the spot market to meet long-term contract obligations.  In addition, hedge funds are buying physical uranium in order to realise profits on potential future commodity price increases.  Critically, we determine that primary and secondary supplies are more than sufficient to meet forecast demand over the next four to five years; before taking into account substantial existing global uranium stocks, some of which are able to re-enter the spot market at short notice.


Quantifying nuclear statistics with substantial discrepancies
LT contracts &amp; speculative hoarding driving recent 40% spot price increase
Primary/secondary Uranium supplies currently 112% of 2017 demand
Uranium supply deficits extremely unlikely before 2022
Global Uranium demand to fall 25-40% by 2050
 Primary Uranium sector LT SELL

We have independently audited global nuclear construction statistics in order to determine future Uranium demand.  Although near-term statistics match those in the public domain, long-term demand determined via construction pipeline illustrates substantial discrepancies.  Compiling planned plant construction, operational extensions, nameplate upgrades, versus decommissioning announcements/events, and in many cases, public policy inertia; has led us to believe that despite historical primary supply shortages, global nuclear demand peaked in 2006.
Since plateauing and despite strong Chinese growth, nuclear power generation has fallen &lt;2% over the past two decades, a decline that is predicted to accelerate as a number of developed and developing nations pursue other energy options.
The macro-trend not replacing existing nuclear infrastructure means (dependent on assumptions), according to our calculations, global uranium demand will decrease between 20 to 40% by 2050.
As opposed to signifying a fundamental change in underlying demand, we believe that recent Uranium price increases are the result of producers closing primary operations, and substituting production with purchases on the spot market to meet long-term contract obligations.  In addition, hedge funds are buying physical uranium in order to realise profits on potential future commodity price increases.  Critically, we determine that primary and secondary supplies are more than sufficient to meet forecast demand over the next four to five years; before taking into account substantial existing global uranium stocks, some of which are able to re-enter the spot market at short notice.

Uranium - About to Enter Its Own Nuclear Winter

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

The year is winding down and there are only three weeks left in 2018. The sentiment on the global stock markets has been turning down rapidly in recent weeks. For those that follow Smartkarma, some of you may have noticed that the sentiment on the reports have also been getting progressively bearish. Smartkarma's monthly sentiment distribution (number of bearish reports/total number of reports) reached the highest bearish level this year in November at 46.2%, up from 42% in October and 37.6% in September. 
KOSPI was down 1% from end of November to December 7th. Nikkei was down 0.3% during the same period. 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/072/607/original/Smartkarma-sentiment.PNG?1544403635" class="editor-image img-responsive" data-smartkarma-image-id="72607"></figure>
<div class="content-caption">Smartkarma Sentiment Index (Source: Smartkarma)</div>
There have been numerous excellent insights on Nissan/Renault by several Smartkarma contributors that are worthwhile taking another look: 
<ul>
<li>
<a href="https://www.smartkarma.com/insights/nissan-is-the-alliance-ghosn-with-the-wind" target="_blank" data-smartkarma-citation="insights:26109">Nissan: Is the Alliance Ghosn With the Wind?</a> (21 Nov, <a href="https://www.smartkarma.com/profiles/713" target="_blank" data-smartkarma-citation="accounts:713">Mio Kato, CFA</a>)</li>
<li>
<a href="https://www.smartkarma.com/insights/nissan-renault-french-fireworks-ahead" target="_blank" data-smartkarma-citation="insights:26162">Nissan/Renault:  French Fireworks Ahead?</a> (22 Nov, <a href="https://www.smartkarma.com/profiles/25" target="_blank" data-smartkarma-citation="accounts:25">Travis Lundy</a>)</li>
<li>
<a href="https://www.smartkarma.com/insights/nissan-motor-risks-to-the-alliance-if-ghosn-returns-to-renault-as-chairman" target="_blank" data-smartkarma-citation="insights:26131">Nissan Motor--Risks to the Alliance if Ghosn Returns to Renault as Chairman</a> (22 Nov, <a href="https://www.smartkarma.com/profiles/914" target="_blank" data-smartkarma-citation="accounts:914">SC Capital</a>)</li>
<li>
<a href="https://www.smartkarma.com/insights/nissan-motor-charting-the-ghosn-supremacy" target="_blank" data-smartkarma-citation="insights:26191">Nissan Motor: Charting the Ghosn Supremacy</a> (25 Nov, <a href="https://www.smartkarma.com/profiles/2531" target="_blank" data-smartkarma-citation="accounts:2531">Campbell Gunn</a>)</li>
<li>
<a href="https://www.smartkarma.com/insights/nissan-motor-what-happens-if-nissan-renault-both-owned-25-stakes-in-each-other" target="_blank" data-smartkarma-citation="insights:26292">Nissan Motor--What Happens if Nissan &amp; Renault Both Owned 25% Stakes in Each Other?</a> (29 Nov, <a href="https://www.smartkarma.com/profiles/914" target="_blank" data-smartkarma-citation="accounts:914">SC Capital</a>)</li>
<li>
<a href="https://www.smartkarma.com/insights/nissan-renault-french-state-intervention" target="_blank" data-smartkarma-citation="insights:26444">Nissan/Renault: French State Intervention</a> (4 Dec, <a href="https://www.smartkarma.com/profiles/25" target="_blank" data-smartkarma-citation="accounts:25">Travis Lundy</a>)</li>
</ul>

The year is winding down and there are only three weeks left in 2018. The sentiment on the global stock markets has been turning down rapidly in recent weeks. For those that follow Smartkarma, some of you may have noticed that the sentiment on the reports have also been getting progressively bearish. Smartkarma's monthly sentiment distribution (number of bearish reports/total number of reports) reached the highest bearish level this year in November at 46.2%, up from 42% in October and 37.6% in September. 
KOSPI was down 1% from end of November to December 7th. Nikkei was down 0.3% during the same period. 

Smartkarma Sentiment Index (Source: Smartkarma)
There have been numerous excellent insights on Nissan/Renault by several Smartkarma contributors that are worthwhile taking another look: 


Nissan: Is the Alliance Ghosn With the Wind? (21 Nov, Mio Kato, CFA)

Nissan/Renault:  French Fireworks Ahead? (22 Nov, Travis Lundy)

Nissan Motor--Risks to the Alliance if Ghosn Returns to Renault as Chairman (22 Nov, SC Capital)

Nissan Motor: Charting the Ghosn Supremacy (25 Nov, Campbell Gunn)

Nissan Motor--What Happens if Nissan &amp; Renault Both Owned 25% Stakes in Each Other? (29 Nov, SC Capital)

Nissan/Renault: French State Intervention (4 Dec, Travis Lundy)


Smartkarma’s Week That Was in JP/​​​​​KR: Softbank, Nissan, & A Star Is Born in 2018 Rewind to 1937

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Takeda, Graincorp, Alps, Hopewell, Renesas, Toshiba, Red Hat, Renault

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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.

Equity Bottom-Up

After <a href="https://www.smartkarma.com/entities/17524" target="_blank" data-smartkarma-citation="entities:17524:1">Mcdermott Intl (MDR US)</a> announced further write-downs related to the Cameron and Freeport LNG projects at its 3Q earnings, <a href="https://www.smartkarma.com/entities/6232" target="_blank" data-smartkarma-citation="entities:6232:1">Chiyoda Corp (6366 JP)</a>'s stock price entered free fall as the company came out with a ¥98bn downward revision, announcing losses that would severely weaken its balance sheet. The majority of this was driven by a ¥85bn write-down for Cameron but adjustments were also made to their Freeport and Tangguh projects.The expected ¥105bn net loss will be the worst in the company's history and the cumulative losses over the last three years (¥125.0bn) would now exceed the overall loss accumulated in the three years between 1997-1999 (¥116.7bn) when the company flirted with bankruptcy and became a sub ¥100 stock. Chiyoda now forms a triumvirate with <a href="https://www.smartkarma.com/entities/637" target="_blank" data-smartkarma-citation="entities:637:1">Toshiba Corp (6502 JP)</a>/Westinghouse and Mcdermott as companies announcing huge write-downs with the common thread being CB&amp;I. Toshiba's net losses before minority interests were ¥1,160bn while Mcdermott has avoided losses but been forced to write-down a total of $909m (¥103bn) since its acquisition of CB&amp;I.We examine the history of CB&amp;I and try to shed some light on the issues facing EPC companies in the US, potential root causes of these write-downs and an evaluation of Chiyoda's risk management below.

After Mcdermott Intl (MDR US) announced further write-downs related to the Cameron and Freeport LNG projects at its 3Q earnings, Chiyoda Corp (6366 JP)'s stock price entered free fall as the company came out with a ¥98bn downward revision, announcing losses that would severely weaken its balance sheet. The majority of this was driven by a ¥85bn write-down for Cameron but adjustments were also made to their Freeport and Tangguh projects.The expected ¥105bn net loss will be the worst in the company's history and the cumulative losses over the last three years (¥125.0bn) would now exceed the overall loss accumulated in the three years between 1997-1999 (¥116.7bn) when the company flirted with bankruptcy and became a sub ¥100 stock. Chiyoda now forms a triumvirate with Toshiba Corp (6502 JP)/Westinghouse and Mcdermott as companies announcing huge write-downs with the common thread being CB&amp;I. Toshiba's net losses before minority interests were ¥1,160bn while Mcdermott has avoided losses but been forced to write-down a total of $909m (¥103bn) since its acquisition of CB&amp;I.We examine the history of CB&amp;I and try to shed some light on the issues facing EPC companies in the US, potential root causes of these write-downs and an evaluation of Chiyoda's risk management below.

Chiyoda: Assessing Risk Management Amidst the Trail of Write-Downs in CB&I's Wake

Travis Lundy

On November 8th, <a href="https://www.smartkarma.com/entities/637" target="_blank" data-smartkarma-citation="entities:637:1">Toshiba Corp (6502 JP)</a><a href="https://www.toshiba.co.jp/about/ir/en/news/20181108_5.pdf" target="_blank">announced</a> a share buyback program of up to 260 million shares (40% of shares outstanding) and up to ¥700 billion, in line with the Shareholder Return Policy announced in May, then again in June after FY 2018 March results. The company had the cash (and the shareholder equity) in early June after the sale of Toshiba Memory Corporation but because of the technical vagaries of the rules regarding share buybacks and other distributions of capital surplus, Toshiba had to wait until audited Q2 results of the parent company were available to actually announce and launch the buyback (King Street's entreaties notwithstanding). The company announced ToSTNeT-3 off-auction on-exchange buybacks very quickly, executing three of them in just over a week. Then the company announced it would start on-market purchases. Today, it announced the results of its first month of purchases - 68.49mm shares purchased for ¥257.66 billion.That and other information revealed since the last ToSTNeT-3 buyback tells you something.<hr>For previous recent treatment on the Toshiba buyback, see the following:    <a href="https://www.smartkarma.com/insights/toshiba-king-street-s-buyback-proposals-lack-required-detail" target="_blank" data-smartkarma-citation="insights:24727">Toshiba: King Street's Buyback Proposals Lack Required Detail</a> (5 Oct)     <a href="https://www.smartkarma.com/insights/toshiba-s-buyback-how-it-might-work" target="_blank" data-smartkarma-citation="insights:25748">Toshiba's Buyback - How It Might Work</a> (9 Nov)     <a href="https://www.smartkarma.com/insights/toshiba-s-tostnet-3-buyback-unwinding-another-game-of" target="_blank" data-smartkarma-citation="insights:25863">Toshiba's ToSTNeT-3 Buyback: Unwinding? Another Game of 🐓?</a> (12 Nov)     <a href="https://www.smartkarma.com/insights/toshiba-tostnet-3-round-2-579bn-to-go" target="_blank" data-smartkarma-citation="insights:25945">Toshiba ToSTNeT-3: Round 2 (¥579bn To Go)</a> (14 Nov)     <a href="https://www.smartkarma.com/insights/toshiba-tostnet-3-buyback-means-1-3-done-off-to-buy-in-the-market-now" target="_blank" data-smartkarma-citation="insights:26126">Toshiba ToSTNeT-3 Buyback Means 1/3 Done. Off To Buy In The Market Now!</a> (21 Nov)

On November 8th, Toshiba Corp (6502 JP)announced a share buyback program of up to 260 million shares (40% of shares outstanding) and up to ¥700 billion, in line with the Shareholder Return Policy announced in May, then again in June after FY 2018 March results. The company had the cash (and the shareholder equity) in early June after the sale of Toshiba Memory Corporation but because of the technical vagaries of the rules regarding share buybacks and other distributions of capital surplus, Toshiba had to wait until audited Q2 results of the parent company were available to actually announce and launch the buyback (King Street's entreaties notwithstanding). The company announced ToSTNeT-3 off-auction on-exchange buybacks very quickly, executing three of them in just over a week. Then the company announced it would start on-market purchases. Today, it announced the results of its first month of purchases - 68.49mm shares purchased for ¥257.66 billion.That and other information revealed since the last ToSTNeT-3 buyback tells you something.For previous recent treatment on the Toshiba buyback, see the following:    Toshiba: King Street's Buyback Proposals Lack Required Detail (5 Oct)     Toshiba's Buyback - How It Might Work (9 Nov)     Toshiba's ToSTNeT-3 Buyback: Unwinding? Another Game of 🐓? (12 Nov)     Toshiba ToSTNeT-3: Round 2 (¥579bn To Go) (14 Nov)     Toshiba ToSTNeT-3 Buyback Means 1/3 Done. Off To Buy In The Market Now! (21 Nov)

Toshiba Buyback Update - Not Banging Down Doors To Get Stock Yet

Japan

Toshiba Corporation manufactures and markets electrical and electronic products. The Company's products include digital products such as PCs and televisions, NAND flash memories, and system LSIs (large-scale integrated), as well as social infrastructures such as power generators, medical equipment, and home appliances.

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Toshiba Corp (6502 JP)

Uranium - About to Enter Its Own Nuclear Winter

Quantifying nuclear statistics with substantial discrepancies LT contracts & speculative hoarding driving recent 40% spot...

Boost Research

Smartkarma’s Week That Was in JP/KR: Softbank, Nissan, & A Star Is Born in 2018 Rewind to 1937

The year is winding down and there are only three weeks left in 2018. The sentiment on the global stock markets has been turning down rapidly in...

Douglas Kim

Last Week in Event SPACE: Takeda, Graincorp, Alps, Hopewell, Renesas, Toshiba, Red Hat, Renault

Last Week in Event SPACE ... Takeda Pharmaceutical (4502 JP) is a significantly interesting trade still, but there are path, borrow, settlement,...

David Blennerhassett

Chiyoda: Assessing Risk Management Amidst the Trail of Write-Downs in CB&I's Wake

After Mcdermott Intl (MDR US) announced further write-downs related to the Cameron and Freeport LNG projects at its 3Q earnings, Chiyoda Corp (6366...

Mio Kato

Toshiba Buyback Update - Not Banging Down Doors To Get Stock Yet

On November 8th, Toshiba Corp (6502 JP)announced a share buyback program of up to 260 million shares (40% of shares outstanding) and up to ¥700...

Travis Lundy

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Uranium - About to Enter Its Own Nuclear Winter

Quantifying nuclear statistics with substantial discrepancies LT contracts & speculative hoarding driving recent 40% spot...

Boost Research

Smartkarma’s Week That Was in JP/​​​​​KR: Softbank, Nissan, & A Star Is Born in 2018 Rewind to 1937

The year is winding down and there are only three weeks left in 2018. The sentiment on the global stock markets has been turning down rapidly in...

Douglas Kim

Last Week in Event SPACE: Takeda, Graincorp, Alps, Hopewell, Renesas, Toshiba, Red Hat, Renault

Last Week in Event SPACE ... Takeda Pharmaceutical (4502 JP) is a significantly interesting trade still, but there are path, borrow, settlement,...

David Blennerhassett

Chiyoda: Assessing Risk Management Amidst the Trail of Write-Downs in CB&I's Wake

After Mcdermott Intl (MDR US) announced further write-downs related to the Cameron and Freeport LNG projects at its 3Q earnings, Chiyoda Corp (6366...

Mio Kato

Toshiba Buyback Update - Not Banging Down Doors To Get Stock Yet

On November 8th, Toshiba Corp (6502 JP)announced a share buyback program of up to 260 million shares (40% of shares outstanding) and up to ¥700...

Travis Lundy

Smartkarma’s Week That Was in JP/KR: Softbank, Nissan, & A Star Is Born in 2018 Rewind to 1937