In today’s briefing:
- Sony – Great Opportunity
- Softbank – Hmmmmm…
- Fujitsu General – A Second Hiccup
- Japan’s Topix Index Looking for the Exit Door
- Shin-Etsu – Buy for the PVC Business
- Nidec (6594): Catch a Falling Knife
- Platforms Add Merchant Support as Japan’s Online Fashion Wars Move Offline
- Ichigo (2337): Further Acceleration in Property Sales. On Track to Achieve Full-Year NP Guidance
Sony – Great Opportunity
- Following its 12.8% fall last Wednesday Sony is now getting hit for 7.7% today thanks to Jay Powell.
- This is an excellent opportunity to resize positions in our view as the long-term outlook remains excellent.
- We had been worried about potential volatility due to the name becoming consensus but since that has been realised we are back to being uber bulls here.
Softbank – Hmmmmm…
- Marcelo Claure is reportedly out, joining Katsunori Sago and Michael Ronen, Robert Townsend, Chad Fentress and Ziad Ojakli, Gary Ginsberg and Yuko Kawamoto.
- This is the highest profile resignation at Softbank since Nikesh Arora and continues the pattern of people reportedly in disputes with Rajeev Misra leaving the company.
- So does that 50% holdco discount offer any comfort here???
Fujitsu General – A Second Hiccup
- Fujitsu General’s 3QFY22 results saw solid revenues of ¥63.7bn (+20.3% YoY) but weak OP of just ¥35m (0.1% OPM).
- Cost inflation is a concern here but we are most concerned with the top line and we see few issues there which leaves us encouraged.
- There is also the possibility of a buyout offer from parent Fujitsu though we are concerned about any premium being too light.
Japan’s Topix Index Looking for the Exit Door
- The Topix Index is approaching important levels at 1,838-1,849 which should be watched closely
- If other developments on the Nikkei 225 are any indication then we are going to see a bearish break
- A close below that zone opens the way for a move towards 1,720 which is another 7% below current levels
Shin-Etsu – Buy for the PVC Business
- In our last note we posed the question of whether Shin-Etsu could join the ¥1trn OP club.
- The company’s upgrade of its guidance from ¥485bn to ¥675bn today suggests that in fact the answer is looking like a yes.
- While conditions for the wafer business remain strong it may be dragged down by tech negativity leading Shin-Etsu to rely on its phenomenal PVC business instead.
Nidec (6594): Catch a Falling Knife
- Operating profit declined in 3Q despite a 15% YoY increase in sales. FY Mar-22 profit guidance now looks too high.
- The Automotive division is suffering from the semiconductor shortage, high materials prices and the cost of ramping up EV motor production – which is scheduled to continue until 2025.
- But the share price has dropped 31% since the beginning of January. Long-term investors may now choose when to buy in.
Platforms Add Merchant Support as Japan’s Online Fashion Wars Move Offline
- Rakuten Inc (4755 JP) and ZOZO Inc (3092 JP) are in a battle for share in online fashion with both companies increasingly aping the other to attract both merchants and consumers.
- Amazon.com Inc (AMZN US) and Z Holdings (4689 JP) aren’t standing still either but the competitive pressures between Rakuten and Zozo may put them ahead of their rivals.
- This competitive edge now encompasses both physical stores and online platforms for physical retailers, with the aim to bind them ever closer to the platform.
Ichigo (2337): Further Acceleration in Property Sales. On Track to Achieve Full-Year NP Guidance
Sold four office properties, with sufficient gains to achieve full-year NP guidance
Ichigo (2337, the company) announced on January 27, that it had signed a contract to sell four office properties.
The four office properties have been sold to a newly established bridge fund
Before it’s here, it’s on Smartkarma
