In this briefing:
1. Japan – Chinese Flu
By Konstantinos Venetis, Senior Economist
- Japan skirts recession but near-term prospects remain weak
- Deflationary headwinds to persist in H1, threatening business spending
- Recovery likely in late 2019 as world trade finds a firmer footing
2. Japan Stock Weekly
NSK (6471) – operating environment poor, analysts revising down but are we close to the bottom for the share price?
UUUM (3990) – great performer, and business will continue to grow fast. A buy for those who have believe in the growth of internet advertising, and do not mind a lofty valuation.
Rakuten (4755) – announced IPO of Lyft has helped share price rally. Sum of parts makes this look cheap to us, and we believe they have a sporting chance as a mobile operator. Market is overly negative in our view.
3. UUUM (3990) Phenomenal Growth but at a Price.
This has been a fantastic performer. Since our buy note one year ago, the shares are up just over 3 times. Earnings growth has been very strong, and much better than we had anticipated. The story is even better now than it was then. Unfortunately, the valuations are not! The company is very focussed on growing revenue for the time being. If one is happy to buy a very fast growing new business, then this is still worth looking at.
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