Japan Weekly | Renova, Mitsubishi Motors, Mercari

NTT (Buy) - Q1 22 Results Reaction: Forex Gains Flatter Top-Line; Signs of Mobile Stability

Mercari (4385) | No Path to Profitability

Japan Telecoms - FY22 Guidance Largely Insulated from Pressure to Raise Wages

Gravity Works As WeWork Doesn't; Now Plan B

Telco/Internet specialist

Kirk Boodry

Redex Research

Thematic (Sector/Industry)

Japan Telecom services / Thematic (Sector/Industry)

<ul>
<li>Within our coverage, NTT and Softbank Group are the main beneficiaries of a stronger dollar. NTT benefits operationally as it generates c. $18-20bn in overseas revenue</li>
<li>Softbank benefits in valuation terms as c. 90% of the portfolio is dollar-linked. The forex move from ¥115 to ¥144 boosts asset value by ¥2.4trn or  ¥1,500/share (net)</li>
<li>ECommerce play Mercari gets 30% of revenue from the US but that segment is losing money and a stronger dollar expands that on a yen P&amp;L</li>
</ul>


Within our coverage, NTT and Softbank Group are the main beneficiaries of a stronger dollar. NTT benefits operationally as it generates c. $18-20bn in overseas revenue
Softbank benefits in valuation terms as c. 90% of the portfolio is dollar-linked. The forex move from ¥115 to ¥144 boosts asset value by ¥2.4trn or  ¥1,500/share (net)
ECommerce play Mercari gets 30% of revenue from the US but that segment is losing money and a stronger dollar expands that on a yen P&amp;L


NTT (Nippon Telegraph & Telephone) (9432 JP)

Japan Telecoms - Strong Dollar a Boon for NTT and Softbank Group, Bad for Mercari