In today’s briefing:
- China Consumer Plays Listed In Japan
- U.S., Europe, and Japan Still Holding Below Resistance; Favor Defensives
- Ibiden (4062 JP): Once Again a Long-Term Buy
- Hiday Hidaka (7611 JP): 1H FY02/25 flash update
China Consumer Plays Listed In Japan
- Nippon Paint Holdings (4612 JP) is a branded decorative paint player. China made up nearly 40% of the operating profit of the company.
- Saizeriya (7581 JP) is a Japanese restaurant chain of fast casual Italian food, with currently the majority of operating profit and growth coming from China.
- Shiseido Company (4911 JP) is a Japanese beauty company that relies heavily on China.
U.S., Europe, and Japan Still Holding Below Resistance; Favor Defensives
- Major indexes in the three largest global equity markets (U.S., Europe, Japan) all remain below critical resistances of 5783 on SPX, 5000-5120 on EURO STOXX 50, and 2740-2820 on TOPIX
- Additionally, broad global MSCI indexes (local currency) including the ACWI, ACWI ex-U.S., and EAFE all remain at/below resistance from their YTD highs; reduce exposure or shift to defensives.
- In late-July we discussed expectations for a 1-to 4-month pullback/consolidation period on MSCI ACWI. We believe it seems likely to last closer to four months, and potentially 4- to 6-months
Ibiden (4062 JP): Once Again a Long-Term Buy
- Sales, profits and the share price are bottoming out and good 1Q results make FY Mar-25 guidance look conservative.
- Demand for advanced packaging should drive recovery, with the operating margin regaining its previous peak in three or four years.
- Management’s long-term guidance implies a decline in the projected P/E ratio from 26x to 10X by FY Mar-28, but even 15x would make the shares an attractive investment.
Hiday Hidaka (7611 JP): 1H FY02/25 flash update
- Revenue for 1H FY02/25 was JPY26.9bn, a 13.0% YoY increase, with record highs in monthly and half-year periods.
- Operating profit for 1H FY02/25 reached JPY2.8bn, up 15.7% YoY, despite rising ingredient and personnel costs.
- The company plans six new store openings in Q3, focusing on northern Kanto expansion and recruitment enhancement.
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