Japan/Asia Long-Short, LightStream Research

Mio Kato

Over 15 years analysing Japanese and Asian stocks from a long/short perspective

I focus on cyclically driven sectors such as Gaming, Factory Automation and Autos

An eclectic background as a long-short analyst, upper management at a financial data startup through its listing, and as the founder of a team analysing big/alternative data, all of which supports independent and differentiated views... we hope

An appreciation for Mathematics drives the development of a "Micro-Quantamental" process which can provide a data-driven, historically-informed and semi-automated foundation upon which to layer more qualitative and judgemental analysis, thus improving investment decision-making speed and accuracy

Japan/Asia Long-Short

Smartkarma's Week That Was in JP/KR: BOJ Again, JP/KR Earnings! & SK Telecom

Smartkarma's Week That Was in JP/KR: Telcos, Cosmetics, Retail, Semi Wafers, and Korean LCCs

Semiconductor Silicon Wafers- Global Supply, Demand & Pricing Review Q2 2018

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

Japan & south korea / Thematic (Sector/Industry)

<p>Macro dominated in the last week as markets were relatively benign with TOPIX flattish and KOSPI up 0.7% going into Friday before concerns about Turkey caused a mid-day selloff leading TOPIX to close down 1.29% and KOSPI to give up its gains and close down 0.21%. Earnings season continues and continues to see greater volatility than usual with a surprising number of double digit moves, mostly to the downside. <a href="https://www.smartkarma.com/entities/27149" target="_blank" data-smartkarma-citation="entities:27149:1">Mercari Inc (4385 JP)</a> was perhaps the most striking as overseas losses led to a miss vs. estimates for the first reported quarter of the company and sent the stock plunging 10.8% to end the week. In Korea, <a href="https://www.smartkarma.com/entities/191" target="_blank" data-smartkarma-citation="entities:191:1">Samsung Electronics (005930 KS)</a>' mid-week announcement of a KRW180trn spending plan over 3-years was not enough to boost sentiment as both Goldman Sachs and Morgan Stanley issued warnings on the tech sector.</p>
<p>Turning to the micro picture, Smartkarma's Week That Was featured analyses of holdco conversions of Hyundai Dev Co and Hyundai Mobis as well as an update on NCSoft and the Esports scene in Korea. In Japan, a lowball deal for Mitsui Home by Mitsui Fudosan as Japan's governance continues to have its ups and downs, and value propositions on Toyota Industries, Keihin and Japan Display rounded a relatively quiet week.</p>
<h2></h2>
<div class="content-highlight">
<h2>Japan</h2>
</div>
<h2>Mitsui Fudosan Likely to Succeed with 5x Ex-Cash PE Bid for Mitsui Home</h2>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 136.5px;"> </td>
<td style="width: 711.5px;"> </td>
</tr>
<tr>
<td style="width: 136.5px;">Insight Provider</td>
<td style="width: 711.5px;"><a href="https://www.smartkarma.com/profiles/25" target="_blank" data-smartkarma-citation="accounts:25">Travis Lundy</a></td>
</tr>
<tr>
<td style="width: 136.5px;">Insight</td>
<td style="width: 711.5px;"><a href="https://www.smartkarma.com/insights/mitsui-fudosan-tries-to-steal-a-deal-on-mitsui-home" target="_blank" data-smartkarma-citation="insights:22717">Mitsui Fudosan Tries to Steal a Deal on Mitsui Home</a></td>
</tr>
<tr>
<td style="width: 136.5px;">Companies</td>
<td style="width: 711.5px;">
<a href="https://www.smartkarma.com/entities/565" target="_blank" data-smartkarma-citation="entities:565:1">Mitsui Fudosan (8801 JP)</a>, <a href="https://www.smartkarma.com/entities/16692" target="_blank" data-smartkarma-citation="entities:16692:1">Mitsui Home (1868 JP)</a>
</td>
</tr>
</tbody>
</table>
<ul>
<li>Mitsui Fudosan announced a TO at JPY980 for Mitsui Home on 3 Aug.</li>
<li>Mitsui Fudosan currently owns 56.34% of Mitsui Home and accounting for Mitsui Fudosan Realty, corporate holders and the Employee Shareholding Association leaves them needing only about 10% of remaining shares to hit 66.7% ownership. Once hitting 66.7%, remaining shareholders would be squeezed out.</li>
<li>A big shift appears to have occurred from cash and equivalents into other current assets in the last quarter, distorting the valuation picture. Adjusting for this gets you implied valuations of 5.0x ex-cash PE and 2.8x EV/EBITDA vs. peers at 14.1-20.8x and 6.6-8.5x respectively.</li>
<li>Needless to say, the tender price falls far short of looking "fair".</li>
</ul>
<hr>
<h2>Logistics Acquisitions, Growth in Forklifts and Electric AC Compressors Should Correct Toyota Industries' 40% Discount to Peers</h2>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 137.5px;"> </td>
<td style="width: 710.5px;"> </td>
</tr>
<tr>
<td style="width: 137.5px;">Insight Provider</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/profiles/2658" target="_blank" data-smartkarma-citation="accounts:2658">Curtis Lehnert</a></td>
</tr>
<tr>
<td style="width: 137.5px;">Insight</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/insights/toyota-industries-6201-jp-stub-business-expanding-into-high-growth-segments" target="_blank" data-smartkarma-citation="insights:22252">Toyota Industries (6201 JP): Stub Business Expanding into High Growth Segments</a></td>
</tr>
<tr>
<td style="width: 137.5px;">Company</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/entities/4500" target="_blank" data-smartkarma-citation="entities:4500:1">Toyota Industries (6201 JP)</a></td>
</tr>
</tbody>
</table>
<ul>
<li>Toyota Industries is trading at about 0.82x EV/Sales, a 40% discount to peers at 1.3x and its NAV discount is about 30% compared to a range of 12-34% since 2015, making the stub attractive.</li>
<li>The company's acqusitions of Vanderlande and Bastian were conducted at reasonable multiples of 1.10x and 0.87x EV/Sales compared to a peer average takeover multiple of 1.21x since 2010 and 10% YoY growth is possible.</li>
<li>Momentum in forklift sales, where the company is the global leader, is strong and while concerns about a shift to low-mid end models has suppressed the stock, 1Q results suggest that the trend in the company's core high-end segment remains strong.</li>
<li>The ability to manufacture AC compressors for EVs which are higher margin than engine-powered units in-house gives the company exposure to a high growth business for the future.</li>
</ul>
<hr>
<h2>Japan Display's Smaller than Expected Loss Points to Cost Structure Improvement as Exponential Rise in Sales for 2H Beckons</h2>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 137.5px;"> </td>
<td style="width: 710.5px;"> </td>
</tr>
<tr>
<td style="width: 137.5px;">Insight Providers</td>
<td style="width: 710.5px;">
<a href="https://www.smartkarma.com/profiles/914" target="_blank" data-smartkarma-citation="accounts:914">SC Capital</a>, <a href="https://www.smartkarma.com/profiles/713" target="_blank" data-smartkarma-citation="accounts:713">Mio Kato, CFA</a>
</td>
</tr>
<tr>
<td style="width: 137.5px;">Insights</td>
<td style="width: 710.5px;">
<p><a href="https://www.smartkarma.com/insights/japan-display-6740-june-quarter-could-be-quite-strong-given-samsung-s-weak-oled-sales" target="_blank" data-smartkarma-citation="insights:22785">Japan Display (6740)--June Quarter Could Be Quite Strong Given Samsung's Weak OLED Sales</a></p>
<p><a href="https://www.smartkarma.com/insights/japan-display-q1-beat-is-confirmation-that-fy18-consensus-is-too-low" target="_blank" data-smartkarma-citation="insights:22897">Japan Display--Q1 Beat Is Confirmation that FY18 Consensus Is Too Low</a></p>
<p><a href="https://www.smartkarma.com/insights/jdi-cost-cuts-much-better-than-we-expected-execution-risk-exists-but-2h-should-be-very-strong" target="_blank" data-smartkarma-citation="insights:22896">JDI: Cost Cuts Much Better Than We Expected, Execution Risk Exists but 2H Should Be Very Strong</a></p>
</td>
</tr>
<tr>
<td style="width: 137.5px;">Companies</td>
<td style="width: 710.5px;">
<a href="https://www.smartkarma.com/entities/8280" target="_blank" data-smartkarma-citation="entities:8280:1">Japan Display (6740 JP)</a>, <a href="https://www.smartkarma.com/entities/191" target="_blank" data-smartkarma-citation="entities:191:1">Samsung Electronics (005930 KS)</a>
</td>
</tr>
</tbody>
</table>
<ul>
<li>JDI saw smaller operating losses than expected in 1Q as SG&amp;A costs and depreciation declined significantly following its restructuring efforts.</li>
<li>Orders for its Full Active Displays from Apple, inventory build for the key 2H and strong sales of high margin automotive displays should drive a stellar 2H.</li>
<li>The lean cost structure and massive demand could lead to OP clearing JPY30bn for the year compared to consensus of JPY16.7bn and the guidance midpoint of JPY20.6bn, which would put the company on 10x PE.</li>
</ul>
<hr>
<h2>Keihin's Motorcycle Business Drives Growth Despite Guidance of a Decline</h2>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 137.5px;"> </td>
<td style="width: 710.5px;"> </td>
</tr>
<tr>
<td style="width: 137.5px;">Insight Provider</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/profiles/1652" target="_blank" data-smartkarma-citation="accounts:1652">Aqila Ali</a></td>
</tr>
<tr>
<td style="width: 137.5px;">Insight</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/insights/keihin-1q-earnings-results-were-strong-why-guide-for-a-30-op-decline-still" target="_blank" data-smartkarma-citation="insights:22834">Keihin 1Q Earnings Results Were Strong: Why Guide for a 30% OP Decline Still?</a></td>
</tr>
<tr>
<td style="width: 137.5px;">Company</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/entities/15395" target="_blank" data-smartkarma-citation="entities:15395:1">Keihin Corp (7251 JP)</a></td>
</tr>
</tbody>
</table>
<ul>
<li>The motorcycle segment should continue to drive Keihin earnings as capacity expands in India where costs are low and margins are high.</li>
<li>The company's forecasts for decreases in sales and margin contraction are inconsistent with capacity expansions in Asia which generates margins of 11% compared to consolidated margins of 7%, but are consistent with a history of excessively conservative forecasting.</li>
<li>A 12.6x FY1 PE is slightly higher than the historical median of 11.3x and to an extent, the peer median of 12.2x but growth momentum suggests the valuation is fair and there is scope for upside from a significant beat of consensus.</li>
</ul>
<p></p>
<div class="content-highlight">
<h2>Korea</h2>
</div>
<h2>Hyundai Dev Co Shareholding Structure Suggests Selling Pressure on HDC Holdings to Create Attractive Swap Ratio</h2>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 137.5px;"> </td>
<td style="width: 710.5px;"> </td>
</tr>
<tr>
<td style="width: 137.5px;">Insight Provider</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/profiles/354" target="_blank" data-smartkarma-citation="accounts:354">Sanghyun Park</a></td>
</tr>
<tr>
<td style="width: 137.5px;">Insight</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/insights/hdc-holdings-012630-tender-offer-event-summary" target="_blank" data-smartkarma-citation="insights:22724">HDC Holdings (012630): Tender Offer Event Summary</a></td>
</tr>
<tr>
<td style="width: 137.5px;">Company</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/entities/7699" target="_blank" data-smartkarma-citation="entities:7699:1">Hyundai Development Co Engg &amp; Cnstn (012630 KS)</a></td>
</tr>
</tbody>
</table>
<ul>
<li>Hyundai Dev Co (294870 KS)'s share swap price has been set at KRW58,672 while the share swap price for HDC Holdings (012630 KS) has only been tentatively set at KRW24,504.</li>
<li>The final price for HDC Holdings will be determined based on VWAP from Aug 23-27 with no discount.</li>
<li>Given that HDC Holdings will require about 15.45% of shareholders excluding affiliated persons to tender and that the current holders do not look particularly incentivised to sell, it seems likely that an attractive swap ratio will be necessary to hit that figure and thus the share price of HDC Holdings could be pressured into late Aug creating the opportunity for a typical arb trade between these companies.</li>
</ul>
<hr>
<h2>Hyundai Dev Co Shareholding Structure Suggests Selling Pressure on HDC Holdings to Create Attractive Swap Ratio</h2>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 137.5px;"> </td>
<td style="width: 710.5px;"> </td>
</tr>
<tr>
<td style="width: 137.5px;">Insight Provider</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/profiles/354" target="_blank" data-smartkarma-citation="accounts:354">Sanghyun Park</a></td>
</tr>
<tr>
<td style="width: 137.5px;">Insight</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/insights/hyundai-motor-group-restructuring-update-revised-plan-summary" target="_blank" data-smartkarma-citation="insights:22872">Hyundai Motor Group Restructuring Update - Revised Plan Summary</a></td>
</tr>
<tr>
<td style="width: 137.5px;">Companies</td>
<td style="width: 710.5px;">
<a href="https://www.smartkarma.com/entities/6089" target="_blank" data-smartkarma-citation="entities:6089:1">Hyundai Mobis (012330 KS)</a>, <a href="https://www.smartkarma.com/entities/16963" target="_blank" data-smartkarma-citation="entities:16963:1">Hyundai Glovis (086280 KS)</a>, <a href="https://www.smartkarma.com/entities/156" target="_blank" data-smartkarma-citation="entities:156:1">Kia Motors Corp (000270 KS)</a>
</td>
</tr>
</tbody>
</table>
<ul>
<li>Sanghyun continues to believe that Hyundai Mobis will be split in two as with its original plan which was cancelled, but this time its merger with Hyundai Glovis will only be conducted following the IPO of the spun out unit in order to ensure a fair merger ratio.</li>
<li>Hyundai Glovis is still not necessarily a short on this news as the Chung family are incentivised to maintain a high price for Hyundai Glovis as a source for their funding.</li>
<li>A formal announcement could occur in late Sep, possibly before Sep 22 which would be the last day to hold a BOD meeting prior to the Korean thanksgiving holidays.</li>
</ul>
<hr>
<h2>After Timing the Top Almost Perfectly Douglas Looks to Buy NCSoft as Project TL Looms</h2>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 137.5px;"> </td>
<td style="width: 710.5px;"> </td>
</tr>
<tr>
<td style="width: 137.5px;">Insight Provider</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/profiles/342" target="_blank" data-smartkarma-citation="accounts:342">Douglas Kim</a></td>
</tr>
<tr>
<td style="width: 137.5px;">Insight</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/insights/ncsoft-esports" target="_blank" data-smartkarma-citation="insights:22733">NCsoft &amp; Esports</a></td>
</tr>
<tr>
<td style="width: 137.5px;">Companies</td>
<td style="width: 710.5px;"><a href="https://www.smartkarma.com/entities/5169" target="_blank" data-smartkarma-citation="entities:5169:1">NCsoft Corp (036570 KS)</a></td>
</tr>
</tbody>
</table>
<ul>
<li>Delays in execution on Esports, VR/AR games and penetration of the Chinese mobile gaming market have led to a 17% fall in the stock price (and a 20% fall since Douglas recommended selling in Sep 2017), as delays in sales expansion, the need for 5G connectivity and political turbulence have dragged on results.</li>
<li>However, new games (Project TL due in 2019) should contribute both in terms of results as well as anticipation (like with Lineage M) while Esports revenue which is currently just 2% of the total should get a tailwind from overall market growth where the global market is expected to grow from USD960m in 2018 to USD1,650m in 2021.</li>
<li>Results are due on 14 Aug and while <a href="https://www.smartkarma.com/profiles/381" target="_blank" data-smartkarma-citation="accounts:381">Thomas Schroeder</a> still sees as much as 17% medium term downside, from that level he feels the stock would be very attractive.</li>
</ul>

Macro dominated in the last week as markets were relatively benign with TOPIX flattish and KOSPI up 0.7% going into Friday before concerns about Turkey caused a mid-day selloff leading TOPIX to close down 1.29% and KOSPI to give up its gains and close down 0.21%. Earnings season continues and continues to see greater volatility than usual with a surprising number of double digit moves, mostly to the downside. Mercari Inc (4385 JP) was perhaps the most striking as overseas losses led to a miss vs. estimates for the first reported quarter of the company and sent the stock plunging 10.8% to end the week. In Korea, Samsung Electronics (005930 KS)' mid-week announcement of a KRW180trn spending plan over 3-years was not enough to boost sentiment as both Goldman Sachs and Morgan Stanley issued warnings on the tech sector.
Turning to the micro picture, Smartkarma's Week That Was featured analyses of holdco conversions of Hyundai Dev Co and Hyundai Mobis as well as an update on NCSoft and the Esports scene in Korea. In Japan, a lowball deal for Mitsui Home by Mitsui Fudosan as Japan's governance continues to have its ups and downs, and value propositions on Toyota Industries, Keihin and Japan Display rounded a relatively quiet week.


Japan

Mitsui Fudosan Likely to Succeed with 5x Ex-Cash PE Bid for Mitsui Home



 
 


Insight Provider
Travis Lundy


Insight
Mitsui Fudosan Tries to Steal a Deal on Mitsui Home


Companies

Mitsui Fudosan (8801 JP), Mitsui Home (1868 JP)





Mitsui Fudosan announced a TO at JPY980 for Mitsui Home on 3 Aug.
Mitsui Fudosan currently owns 56.34% of Mitsui Home and accounting for Mitsui Fudosan Realty, corporate holders and the Employee Shareholding Association leaves them needing only about 10% of remaining shares to hit 66.7% ownership. Once hitting 66.7%, remaining shareholders would be squeezed out.
A big shift appears to have occurred from cash and equivalents into other current assets in the last quarter, distorting the valuation picture. Adjusting for this gets you implied valuations of 5.0x ex-cash PE and 2.8x EV/EBITDA vs. peers at 14.1-20.8x and 6.6-8.5x respectively.
Needless to say, the tender price falls far short of looking "fair".


Logistics Acquisitions, Growth in Forklifts and Electric AC Compressors Should Correct Toyota Industries' 40% Discount to Peers



 
 


Insight Provider
Curtis Lehnert


Insight
Toyota Industries (6201 JP): Stub Business Expanding into High Growth Segments


Company
Toyota Industries (6201 JP)




Toyota Industries is trading at about 0.82x EV/Sales, a 40% discount to peers at 1.3x and its NAV discount is about 30% compared to a range of 12-34% since 2015, making the stub attractive.
The company's acqusitions of Vanderlande and Bastian were conducted at reasonable multiples of 1.10x and 0.87x EV/Sales compared to a peer average takeover multiple of 1.21x since 2010 and 10% YoY growth is possible.
Momentum in forklift sales, where the company is the global leader, is strong and while concerns about a shift to low-mid end models has suppressed the stock, 1Q results suggest that the trend in the company's core high-end segment remains strong.
The ability to manufacture AC compressors for EVs which are higher margin than engine-powered units in-house gives the company exposure to a high growth business for the future.


Japan Display's Smaller than Expected Loss Points to Cost Structure Improvement as Exponential Rise in Sales for 2H Beckons



 
 


Insight Providers

SC Capital, Mio Kato, CFA



Insights

Japan Display (6740)--June Quarter Could Be Quite Strong Given Samsung's Weak OLED Sales
Japan Display--Q1 Beat Is Confirmation that FY18 Consensus Is Too Low
JDI: Cost Cuts Much Better Than We Expected, Execution Risk Exists but 2H Should Be Very Strong



Companies

Japan Display (6740 JP), Samsung Electronics (005930 KS)





JDI saw smaller operating losses than expected in 1Q as SG&amp;A costs and depreciation declined significantly following its restructuring efforts.
Orders for its Full Active Displays from Apple, inventory build for the key 2H and strong sales of high margin automotive displays should drive a stellar 2H.
The lean cost structure and massive demand could lead to OP clearing JPY30bn for the year compared to consensus of JPY16.7bn and the guidance midpoint of JPY20.6bn, which would put the company on 10x PE.


Keihin's Motorcycle Business Drives Growth Despite Guidance of a Decline



 
 


Insight Provider
Aqila Ali


Insight
Keihin 1Q Earnings Results Were Strong: Why Guide for a 30% OP Decline Still?


Company
Keihin Corp (7251 JP)




The motorcycle segment should continue to drive Keihin earnings as capacity expands in India where costs are low and margins are high.
The company's forecasts for decreases in sales and margin contraction are inconsistent with capacity expansions in Asia which generates margins of 11% compared to consolidated margins of 7%, but are consistent with a history of excessively conservative forecasting.
A 12.6x FY1 PE is slightly higher than the historical median of 11.3x and to an extent, the peer median of 12.2x but growth momentum suggests the valuation is fair and there is scope for upside from a significant beat of consensus.



Korea

Hyundai Dev Co Shareholding Structure Suggests Selling Pressure on HDC Holdings to Create Attractive Swap Ratio



 
 


Insight Provider
Sanghyun Park


Insight
HDC Holdings (012630): Tender Offer Event Summary


Company
Hyundai Development Co Engg &amp; Cnstn (012630 KS)




Hyundai Dev Co (294870 KS)'s share swap price has been set at KRW58,672 while the share swap price for HDC Holdings (012630 KS) has only been tentatively set at KRW24,504.
The final price for HDC Holdings will be determined based on VWAP from Aug 23-27 with no discount.
Given that HDC Holdings will require about 15.45% of shareholders excluding affiliated persons to tender and that the current holders do not look particularly incentivised to sell, it seems likely that an attractive swap ratio will be necessary to hit that figure and thus the share price of HDC Holdings could be pressured into late Aug creating the opportunity for a typical arb trade between these companies.


Hyundai Dev Co Shareholding Structure Suggests Selling Pressure on HDC Holdings to Create Attractive Swap Ratio



 
 


Insight Provider
Sanghyun Park


Insight
Hyundai Motor Group Restructuring Update - Revised Plan Summary


Companies

Hyundai Mobis (012330 KS), Hyundai Glovis (086280 KS), Kia Motors Corp (000270 KS)





Sanghyun continues to believe that Hyundai Mobis will be split in two as with its original plan which was cancelled, but this time its merger with Hyundai Glovis will only be conducted following the IPO of the spun out unit in order to ensure a fair merger ratio.
Hyundai Glovis is still not necessarily a short on this news as the Chung family are incentivised to maintain a high price for Hyundai Glovis as a source for their funding.
A formal announcement could occur in late Sep, possibly before Sep 22 which would be the last day to hold a BOD meeting prior to the Korean thanksgiving holidays.


After Timing the Top Almost Perfectly Douglas Looks to Buy NCSoft as Project TL Looms



 
 


Insight Provider
Douglas Kim


Insight
NCsoft &amp; Esports


Companies
NCsoft Corp (036570 KS)




Delays in execution on Esports, VR/AR games and penetration of the Chinese mobile gaming market have led to a 17% fall in the stock price (and a 20% fall since Douglas recommended selling in Sep 2017), as delays in sales expansion, the need for 5G connectivity and political turbulence have dragged on results.
However, new games (Project TL due in 2019) should contribute both in terms of results as well as anticipation (like with Lineage M) while Esports revenue which is currently just 2% of the total should get a tailwind from overall market growth where the global market is expected to grow from USD960m in 2018 to USD1,650m in 2021.
Results are due on 14 Aug and while Thomas Schroeder still sees as much as 17% medium term downside, from that level he feels the stock would be very attractive.


Smartkarma's Week That Was in JP/KR: Value in Autoparts, JDI & Hyundai Mobis Restructuring Updates