Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Equity Bottom-Up

Toshiba has decided to implement a company split of its memory business by March 31, 2017. The purpose of the split is to: 1) enable flexible management of NAND flash business, which requires rapid decision-making and heavy investment; and 2) enhance Toshiba’s capital, which is expected to be severely damaged by the possible impairment of goodwill on nuclear power business. The company is considering a capital injection from a third party, which is less than 20% of the memory business.We forecast this year’s operating profit from NAND flash memory to be JPY 160 billion, while Toshiba’s total operating profit is JPY 250 million (excluding possible impairments of goodwill), which implies Toshiba needs to keep control of the business. We retain our fair value estimate of JPY 330 and keep our uncertainty rating as extreme, since we are not yet able to make a reasonable assumption of the potential underlying share base of the company.Analyst: Kazunori Ito

Toshiba has decided to implement a company split of its memory business by March 31, 2017. The purpose of the split is to: 1) enable flexible management of NAND flash business, which requires rapid decision-making and heavy investment; and 2) enhance Toshiba’s capital, which is expected to be severely damaged by the possible impairment of goodwill on nuclear power business. The company is considering a capital injection from a third party, which is less than 20% of the memory business.We forecast this year’s operating profit from NAND flash memory to be JPY 160 billion, while Toshiba’s total operating profit is JPY 250 million (excluding possible impairments of goodwill), which implies Toshiba needs to keep control of the business. We retain our fair value estimate of JPY 330 and keep our uncertainty rating as extreme, since we are not yet able to make a reasonable assumption of the potential underlying share base of the company.Analyst: Kazunori Ito

Toshiba Decides to Split Its NAND Flash; Detail of Nuclear Power Business Is Disclosed in February

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Event-Driven

In the 4Q16 earnings conference call, SK Hynix said that it was closely watching the situation surrounding Toshiba's new memory company. This means SK Hynix isn't denying that it is seriously interest ed in 19.9% stake (worth about US$2bil) in Toshiba's new memory company. It wouldn't be hard to know why. SK Hynix is relatively weak in NAND area, and Toshiba's NAND business can complement Hynix' weakness. Moreover, SK Hynix and Toshiba have had a long history of R&amp;D collaboration. Even…

In the 4Q16 earnings conference call, SK Hynix said that it was closely watching the situation surrounding Toshiba's new memory company. This means SK Hynix isn't denying that it is seriously interest ed in 19.9% stake (worth about US$2bil) in Toshiba's new memory company. It wouldn't be hard to know why. SK Hynix is relatively weak in NAND area, and Toshiba's NAND business can complement Hynix' weakness. Moreover, SK Hynix and Toshiba have had a long history of R&amp;D collaboration. Even…

SK Hynix Sniffs Around Stake Investment in Toshiba's Memory Spinoff - Why & How?

Asia and Global Semiconductor and Tech Research

Andrew Lu

<h2>Summary</h2><ul>
<li>
What's new? <a href="https://www.smartkarma.com/entities/637" target="_blank" data-smartkarma-citation="entities:637:1">Toshiba </a>announced on Jan 27, 2017 to split the cash cow memory business by March 31, 2017.</li>
<li>
Why? We expect Toshiba is looking for selling some sizable shares in future through an IPO process and then to use proceeds to cover the goodwill and loss of several billion US dollars related to Westinghouse's Acquisition of CB&amp;I Stone &amp; Webster.  </li>
<li>
A perfect opportunity for China? Toshiba's new memory company will be a perfect opportunity for China to invest as China is willing to pay a…</li>
</ul>

Summary

What's new? Toshiba announced on Jan 27, 2017 to split the cash cow memory business by March 31, 2017.

Why? We expect Toshiba is looking for selling some sizable shares in future through an IPO process and then to use proceeds to cover the goodwill and loss of several billion US dollars related to Westinghouse's Acquisition of CB&amp;I Stone &amp; Webster.  

A perfect opportunity for China? Toshiba's new memory company will be a perfect opportunity for China to invest as China is willing to pay a…


Toshiba Announced to Split the Cash Cow Memory Business; What's the Next?

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Japanese and Asian equity long/short strategies

Uzabase

Specialising in Japanese and Asian equity long/short strategies with a focus on rigorous, but targeted quantitative analysis to temper evaluations of company strategy, potential and vision. At Uzabase, our team of analysts provides coverage of industry dynamics with a local Asian flavour on Speeda, our financial information platform. Going forward we are aiming to channel our focus toward thematic research on emerging industries and company research.

An article in the Nikkei today suggested that Toshiba's impairment losses related to its nuclear business could amount to a maximum of JPY700bn, above the previously rumoured high figure of JPY500bn and dwarfing the low estimate of JPY100bn. This figure is just under our maximum estimate of JPY830bn in <a href="https://www.smartkarma.com/insights/toshiba-greater-or-less-than-the-sum-of-its-parts" target="_blank" data-smartkarma-citation="insights:8141">Toshiba: Greater or Less Than The Sum of Its Parts?</a> As such, we believe that incremental bad NEWS could be more limited from here on out.However, as investors take stock of the implications for…

An article in the Nikkei today suggested that Toshiba's impairment losses related to its nuclear business could amount to a maximum of JPY700bn, above the previously rumoured high figure of JPY500bn and dwarfing the low estimate of JPY100bn. This figure is just under our maximum estimate of JPY830bn in Toshiba: Greater or Less Than The Sum of Its Parts? As such, we believe that incremental bad NEWS could be more limited from here on out.However, as investors take stock of the implications for…

Toshiba Falls >20% As Nikkei Suggests Losses Could Mount to JPY700bn Rather than JPY500bn

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Thematic (Sector/Industry)

Stocks categorised to the Capital Goods Industry are involved in a wide range of manufacturing and distribution activities. The majority of Singapore’s 20 biggest Capital Goods stocks have business activities that span across Asia.Singapore lists the third biggest Capital Goods stock in Asia Pacific – Industrial Conglomerate, Jardine Matheson Holdings, which re-joined the STI in November. Over the past 12 months, Jardine Matheson Holdings generated a 15.7% total return, with 2016 turnover 70.6%…

Stocks categorised to the Capital Goods Industry are involved in a wide range of manufacturing and distribution activities. The majority of Singapore’s 20 biggest Capital Goods stocks have business activities that span across Asia.Singapore lists the third biggest Capital Goods stock in Asia Pacific – Industrial Conglomerate, Jardine Matheson Holdings, which re-joined the STI in November. Over the past 12 months, Jardine Matheson Holdings generated a 15.7% total return, with 2016 turnover 70.6%…

Recent Resilience of the Capital Goods Industry

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)

Toshiba Decides to Split Its NAND Flash; Detail of Nuclear Power Business Is Disclosed in February

Toshiba has decided to implement a company split of its memory business by March 31, 2017. The purpose of the split is to: 1) enable flexible...

Morningstar, Inc.

SK Hynix Sniffs Around Stake Investment in Toshiba's Memory Spinoff - Why & How?

In the 4Q16 earnings conference call, SK Hynix said that it was closely watching the situation surrounding Toshiba's new memory company. This means...

Sanghyun Park

Toshiba Announced to Split the Cash Cow Memory Business; What's the Next?

Summary What's new? Toshiba announced on Jan 27, 2017 to split the cash cow memory business by March 31, 2017. Why? We expect Toshiba is looking...

Andrew Lu

Toshiba Falls >20% As Nikkei Suggests Losses Could Mount to JPY700bn Rather than JPY500bn

An article in the Nikkei today suggested that Toshiba's impairment losses related to its nuclear business could amount to a maximum of JPY700bn,...

Mio Kato

Recent Resilience of the Capital Goods Industry

Stocks categorised to the Capital Goods Industry are involved in a wide range of manufacturing and distribution activities. The majority of...

Singapore Exchange Ltd (SGX)

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