Report
Joel Scheiman ...
  • Julie Boote
  • Pelham Smithers
  • William Nestuk

PSA Today Mar 7: Cohn, Korea are market influences/The smartphone industry in 2018/TOY's Kobe Steel consumer lawsuit/Showa Denko's debt management/KHI's woes - Nikkei -0.77%

Japan Market Comment by Pelham Smithers, Julie Boote, Joel Scheiman and William Nestuk
Nikkei ¥21,252.72 (-¥165.04 / -0.77%); Topix ¥1,703.96 (-¥12.34 / -0.72%); ¥/$105.57
Tags: Rakuten (4755 JP), ISB (9702 JP),Vision Inc (9416 JP), Cyber Com (3852 JP), Nippon Systemware (9739 JP), Focus Systems (4662 JP), IBC (3920 JP), OPT (2389 JP), Macromill (3978 JP), CyberAgent (4751 JP), Faith (4295 JP), Capcom (9697 JP), SBI Holdings (8473 JP), GMO Internet (9449 JP), Apple (AAPL US), Hon Hai (2317 TT), Sony (6758 JP), HTC (2498 TT), LG Electronics (066570 KS), Lenovo (992 HK), Samsung (005930 KS), Xiaomi, Huawei, Oppo / Vivo, Murata (6981 JP),TDK (6762 JP), Alps (6770 JP), Minebea Mitsumi (6479 JP), Toyota (7203 JP), Kobe Steel (5406 JP), Showa Denko (4004 JP), KHI (7012 JP), IHI (7013 JP)
Main Points at a Glance
• Cohn, Korea stories present contrary market influences
• Inflection point for the smartphone industry in 2018
• US lawsuit against Toyota claims cars built with Kobe Steel materials are not safe
• Showa Denko does an about-face on managing shares and debt
• KHI still falling from grace; we visit tomorrow
Underlyings
Alps Alpine Co. Ltd.

Alps Electric is engaged in the manufacture and sale of electronic components and automotive audio equipment. Electronic Components segment offers detector switches, slide switches, power switches, tactile switches, magnetic sensors, humidity sensors, pressure sensors, connectors, encoders, potentiometers, multi control devices, communication modules, actuators and other electronic components for automobiles, smartphones, home appliances and other consumer electronics. Automotive Infotainment segment offers head units, navigation systems and rear view cameras. Logistics segment provides transportation, warehousing and forwarding services specializing in electronic components.

Apple Inc

Capcom Co. Ltd.

Capcom is engaged in the development, manufacture and sales of video games, online games, mobile games and arcade games, as well as the operation of amusement arcades. Co.'s business segments are digital contents, amusement facility and amusement equipment. Co. is engaged in the planning, development, manufacture and sales of home video games, online games and mobile games including "Rockman," "Monster Hunter World" and "Dragons Dogma"; the operation of "Plaza Capcom" amusement facilities in Japan; and the development, production and distribution of arcade games for amusement facilities. Co. is also engaged in the licensing business of game characters and the real estate leasing business.

Cyber Com

Cyber Com is mainly engaged in the development of software for telecommunications sector. Co. has three business segments. Software Development segment is involved in the development of software for telecommunication systems, control system and business operation system, among others. Technical Service segment is engaged in the provision of services, including the introduction and operation of systems, consultation, the design, building and maintenance of network, the building of security systems, and others. Information Technology (IT) Component segment is involved in the purchase and sale of personal computers (PCs) and software.

CyberAgent Inc.

CyberAgent is an information technology company. Media segment is engaged in the operation of internet TV station "AbemaTV," free live streaming programs without subscription "FRESH!," blog service "Ameba," matching services "Tapple" and music streaming service "AWA." Game segment offers a variety of games for smartphones such as "GRANBLUE FANTASY." Internet Advertisement segment is engaged in the provision of internet advertising agency services. Investment Development is engaged in the corporate venture capital business, as well as the establishment and operation of investment fund. Others segment is engaged in the operation of smartphone media.

Faith Inc.

Faith is engaged in the provision of content business. Along with its affiliates, Co. operates in three business segments. Content segment is engaged in the multi-contents distribution services, the production of digital contents, the development and provision of distribution platform technology, the installment and operation of network systems, and the provision of digital contents delivery service to users. Point Service segment provides point services for the retail industry. Label segment is engaged in the planning, production and sale of sound sources and videos; the music rights acquisition and management; and the contracted production and sale of sound source and video products.

Focus Systems Corp.

Focus Systems is an IT company engaged in the provision of system integration service, IT service, as well as security equipment sales and services. Co. is engaged in the software development, hardware installation, and information system consulting services for both public and non-public entities, as well as banks and insurance companies. In addition, Co. is engaged in the installation and maintenance of software products related to common infrastructure system for ministry of defense; the installation, investigation and training services of security products; and the digital forensics services.

GMO Internet Inc.

GMO Internet is mainly engaged in the provision of Internet services. Along with its subsidiaries, Co. is engaged in the provision of services including domain registration, Web hosting, SaaS base services for online stores, a marketplace operation, EC support, Website construction, Internet security, credit card settlement, consumer Internet provider, online advertising, advertising space on Co.'s own media properties, Search Engine Optimization, and Internet research. Co. is also engaged in the provision of online securities and foreign exchange margin trading businesses, and venture capital business, and the development and operation of games for smartphone as well as online games.

Hon Hai Precision Industry Co. Ltd. GDR

HTC Corporation

HTC and its subsidiaries are engaged in the design, manufacture and sale of handheld wireless telecommunications devices based on Windows Mobile, Android and Brew Mobile Platform operating systems. In addition to product research and development, production and brand marketing, Co. also provides relevant technical and after-sales service support for all of its products. Co.'s phones are marketed and sold through telecom companies and retail distributors across Europe, America and Asia.

IHI Corporation

IHI is engaged in the manufacture and sale of heavy machinery. Resources, Energy and Resources segment offers boilers, power systems, motors for land and marine use, large marine motors and gas storage facilities and process plants. Social Infrastructure and Offshore Facilities segment offers bridges, water gates, steel structures, floating LNG storage facilities and offshore structures. Industrial Systems and General-purpose Machinery segment offers marine machinery, logistics systems, parking systems, steel manufacturing equipment and heat/surface treatment machinery. Aero Engine, Space and Defense segment provides aero engines, rocket systems, and defense systems.

ISB Corp.

ISB is engaged in the information service business. Co. is engaged in the development of software for mobile terminals, embedded software for mobile phone, automotive, medical, RAID, POS system and factory automation applications, and mission-critical systems for medical, financial, governmental, communication and logistics applications. Co. is also engaged the provision of hosting of data centers, cloud computing, business process outsourcing, design and operation of server infrastructures, development and sale of business packaged software. In addition, Co, is engaged in the manufacture, sale and maintenance of access control system, electric lock, and numeric keypad.

Kawasaki Heavy Industries Ltd.

Kawasaki Heavy Industries is a manufacturer of transport equipment and industrial equipment. Co. is engaged in the manufacture and sale of ships, jet engines, turbines, generating machinery, hydraulic machinery, and industrial robots. Co. also offers railway vehicles, snow removing equipment, aircrafts, industrial machinery, boilers, environmental equipment, steel structures, crushing machines, motorcycles, all-terrain vehicles (ATV), utility vehicles, personal watercrafts, and general-purpose gasoline engines, as well as precision machinery such as hydraulic equipment and industrial robots. In addition, Co. is also involved in the agency business of sale and order of its products.

Kobe Steel Ltd.

Kobe Steel is a steel manufacturer as well as a supplier of aluminum and copper products. Co.'s products include steel plates, seamless steel pipes, titanium, titanium alloys, cast and forged steel products, specialty steels, welding materials, metal rolling products, copper rolling products, aluminum alloys, magnesium alloys, chemical machinery, nuclear related machinery, civil engineering, oil pressure shovels, mini shovels, cranes, electric shovels, electronic-related equipment, information and communication systems, semiconductor related products and special alloy materials. In addition, Co. is engaged in the real estate business.

Lenovo Group Limited

Lenovo Group is an investment holding company. Through its subsidiaries, Co. is engaged in: manufacturing and distribution of IT products and provision of IT services; manufacturing of computers and peripheral equipment; provision of business planning, management, global supply chain, finance, and administration support services; R&D of mobile software; and distribution of IT products as well as mobile phone, smart phone and tablet, server and storage. Co. also provides a full complement of ENERGY STAR® qualified notebooks, desktops, workstations, monitors, and servers. As of Mar. 31, 2015, Co. oeprated four geographical segments, China, Asia Pacific, Europe-Middle East-Africa and Americas.

Macromill Inc.

Macromill is engaged in the provision of internet research service via automatic internet research system (AIRs) developed by Co. Co. provides a wide range of research and analysis services including online marketing research services, global marketing research services, qualitative research services, consumers' purchase trend data services, household and personal consumption expenditure data services, and digital marketing services. Co.'s principal products include "QuickMill," "OrderMill," "OPR" and "Questant." Co. has Co. has two business segments: Macromill and MatrixLab.

MinebeaMitsumi Inc.

Minebea is mainly engaged in the manufacture and sale of ball bearings and high-precision components. Along with its subsidiaries and associated companies, Co. operates in three business segments: machined components, electronic devices and components and MITSUIMI. Co.'s core products include mechanical parts, such as ball bearings, rod-end bearings, pivot assemblies of HDDs; fasteners for automobile and aircraft; LCD backlights; measuring instruments; motors, such as spindle motors for HDDs, information motors (stepping motors, DC brushless motors, DC brush motors and fan motors), and precision motors; special components; mold; and internal parts.

Murata Manufacturing Co. Ltd.

Murata Manufacturing is mainly engaged in the development, manufacture and sale of electronic components and modules in Japan, North America and certain other Asian and European countries. Co.'s products are sold mainly to electronics companies for use as components in telecommunication, computer, audio, video, automotive electronics and other electronic products. Co. is engaged in the development, manufacture and sale of electronic parts and related products, including components for capacitors and piezoelectric products, as well as modules products; the provision of welfare services, personnel services, education and training services, as well as the leasing and management of real estate.

Nippon Systemware Co. Ltd.

Nippon Systemware is a software developer engaged in the provision of software and computer devices development and information processing services. Along with its subsidiaries, Co. operates in two business segments: information technology ("IT") solution and product solution. IT Solution segment is engaged in the development of various application software and the provision of system integration services. Product Solution segment is engaged in the design, development and evaluation of system large-scale integration ("LSI"), firmware and middleware, and circuit boards; and the sale of system for server and network.

Rakuten Inc.

Rakuten is mainly engaged in the Internet-related business. Along with its affiliates, Co. operates in two business segments. The Internet Services segment is engaged in the operation of electronic commerce sites, including an Internet shopping mall "Rakuten Ichiba," an online cash back site, a travel booking site, portal sites and digital contents sites; the sale of advertising on Co.'s sites; the provision of messaging and communication services; and the management of a professional baseball team "Tohoku Rakuten Golden Eagles." FinTech segment is engaged in the provision of Internet banking services and online securities trading services, and the credit card and life insurance businesses.

SBI Holdings Inc.

SBI Holdings is a holding company engaged in the control and management of its group through share ownership. Through its subsidiaries, Co. is engaged in the provision of securities, banking, insurance, housing loan, financial media, real estate financial, forex margin trading businesses, and overseas financial services; the operation and management of investment partnership, the investment in domestic and international venture companies, and the provision of investment advisory services. Co. is also engaged in the 5-aminolaevulinic acid-related business, as well as the research, development, and sale of drugs, cosmetics and health foods.

Showa Denko K.K.

Showa Denko is a chemical producer. Along with its affiliates Co. is mainly engaged in the manufacture and sale of petrochemicals, chemicals, electronics, inorganic materials and aluminum. Co.'s principal products include olefin, such as ethylene and propylene, as well as polyethylene and plastic products; industrial gases, including oxygen, nitrogen, argon and hydrogen gas; hard discs, compound semiconductors, rare earth magnetic alloys, and materials for lithium-ion battery; ceramics, such as alumina, abrasives and refractories; and carbons, such as graphite electrodes; ingots, sheets, extruded products, foils, beverage cans, building products and others.

Sony Corporation

Sony is engaged in the development, design, production, manufacture, offer and sale of various kinds of electronic equipment, instruments and devices for consumer, professional and industrial markets such as network services, game hardware and software, televisions, audio and video recorders and players, still and video cameras, mobile phones, and semiconductors. Co. is engaged in the development, production, manufacture, and distribution of recorded music and the management and licensing of the words and music of songs as well as the production and distribution of animation titles. Co. is also engaged in the production, acquisition and distribution of motion pictures and television.

TDK Corporation

TDK is a manufacturer of recording media, ferrite products and recording device products, and a producer of inductor, ceramic capacitor, magnet, HDD head and other components. Co.'s principal business segments are passive components, sensor application products, magnetic application products, film application products and others. Co.'s principal products include ceramic capacitors, aluminum electrolytic capacitors, film capacitors, inductive devices, high-frequency components, piezoelectric materials and circuit protection components, sensors, HDD head suspension, recording devices, power supplies and magnets, and mechatronics.

Toyota Motor Corp.

Toyota Motor is an automobile manufacturer. Co. is primarily engaged in the design, manufacture, and sale of sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories throughout the world. Co. provides financing, vehicle and equipment leasing and certain other financial services primarily to its dealers and their customers to support the sales of vehicles and other products manufactured by Co. Co.'s principal business segments are automotive operations, financial services operations and other operations. Co. sells its vehicles in approximately 190 countries and regions, and markets for its automobiles in Japan, North America, Europe and Asia.

Vision Inc. ( Japan)

VISION INC. is a Japan-based company principally engaged in the global WiFi business, and the information and communication services business. The Company operates in two segments. The Global WiFi segment is engaged in the rental of mobile WiFi routers in Japan and other countries. The Information and Communication Services segment is engaged in the fixed communication services business, the sale of mobile communication equipment and office automation (OA) equipment, as well as the creation of homepages. The Company is also engaged in the higher time sharing services business, the media business and the mail order business.

Provider
Pelham Smithers Associates Ltd
Pelham Smithers Associates Ltd

Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods. 

PSA produces both company and sector reports. The focus of PSA’s research is to identify winners and losers as new technologies impact the top and bottom lines of corporations. Critical to our research is the clear explanation of how these new technologies work and how they impact companies and industries. 

The founding partners have worked closely together for twenty years and the team has more than doubled in size since 2012. 

Analysts
Joel Scheiman

Julie Boote

Pelham Smithers

William Nestuk

Other Reports on these Companies
Other Reports from Pelham Smithers Associates Ltd

ResearchPool Subscriptions

Get the most out of your insights

Get in touch