PSA Japan Research Round-Up for the May 7 & 8 Golden Week trading days and the week to May 15

The Weekly Comment Summary
Analysis of Sony’s method of presenting its earnings expectations bottom-up by divisions leads Pelham Smithers to devise an algo applicable to other Japanese companies’ FY20 earnings. The result isn’t pretty for either Sony or the rest. We are warned.

Reports / Flash Notes Summaries
1. Shin-Etsu Chemical (4063 JT) – A History of Resilience Against Systemic Shocks
2. Nintendo (7974 JT) – Where Are We in the Switch Business Cycle?
3. Daifuku (6383 JT) FY19 Results and FY20 Outlook – E-Commerce Focus
Company / Sector / Thematic Comments
Technology: Consumer Electronics, Gaming
1. Nintendo (7974 JT) FY19 OP +41% YoY
2. Sony’s (6758 JT) FY19 4Q OP -57% YoY
3. Nexon’s (3659 JT) FY20 1Q OP -21% YoY 7
4. Capcom (9697 JT) Guides for FY20 OP +11.7% YoY
5. No FY20 CE from Square Enix (9684 JT)
6. Colopl (3668 JT): FY20 OP +415% YoY
Technology: Industrial Electronics and Electronic Components
7. NEC (6701 JT) Revises Up FY19 OP
8. Yes: NEC’s (6701 JT) Upward Revision Came Despite Losses in Global
9. Fujitsu (6702 JT): FY19 4Q OP +41% YoY
10. Alps Alpine (6770 JT) 4Q Operating Loss
11. Taiyo Yuden (6976 JT): FY19 4Q Beat, 1Q OPe ¥3bil vs ¥9.6bil a Year Ago
Technology: Semiconductor Production Equipment & Precision
12. Nikon (7731 JT) Revises Down
13. Ricoh (7752 JT) FY19 4Q OP +26% YoY
14. Rohm (6963 JT): FY19 OP Beat Guidance
Technology: Bitcoin / Cryptocurrency and Blockchain
15. Excess Liquidity Environment Sees Crypto-Plays Bought
Chemicals / Electronic Materials
16. TDK 4Q FY19 Operating Loss ¥11.4bil
17. Snapshots of News / Moves & Results:
Autos
18. Global Auto Sales Plunge in April
19. Relief for Automakers as Huge Airbag Recall Is Put on Hold
20. Toyota (7203 JT) Predicts FY20 OP -79.5%
21. Honda (7267 JT) Records FY19 Q4 Operating Loss
22. Toyota (7203 JT) Outshines Honda (7267 JT) in FY19 Q4
23. Mazda (7261 JT): FY19 Q4 OP Falls on Volumes, Currency
24. Hino Motors (7205 JT) Predicts Bleak FY20, but Expects to Remain Profitable
25. China Auto Sales Decline in Early May
Auto Parts / Machinery 26. Daifuku (6383 JT) Delivers for FY19; Less Certain for FY20
27. Daikin (6367 JT) Likely to Beat FY20 Guidance
28. MinebeaMitsumi’s (6479 JT) Near-flat FY20 Guidance / Strong April Sales
Telecom
29. IIJ’s (3774 JT) eSIM Opportunity as Teleworking Increases
30. IIJ (3774 JT): FY19 OP +37% YoY
31. KDDI (9433 JT): FY19 4Q OP -4% YoY
Internet / eCommerce
32. Mixi (2121 JT): Another Year Another Earnings Decline
33. Gree’s (3632 JT) FY20 Q3 Results
34. istyle (3660 JT) Revises Down Again
35. Kakaku.com’s (2371 JT) FY19 Results
36. Trend Micro’s (4704 JT) FY20 Q1 Results
37. Rakuten’s (4755 JT) FY20 Q1 Results
38. DeNA’s FY19 Results
Enterprise Software
39. TIS (3626 JT) Tempers No-Growth FY20 CE with Dividend Hike and Share Buyback
40. Segmenting the B2B IT Sector
41. Will Covid-19 Accelerate Medical Data Digitisation in Japan?
42. Medley (4480 JT) Presents the Positive and Negative of Covid-19 with Strong Long-Term Outlook
43. NTT Data (9613 JT) is Japan’s IT Services Bad Boy, Again
Pharma
44. Shionogi (4507 JT) FY19 OP Fall Short of Guidance by 11.5%
45. Pharma was the Sector de Choix on May 14
Market
46. PSA Focus List Performance YTD

PSA Company Visits, Tours & Interviews
• Participated in earnings call with: TDK (6762 JT), Asahi Kasei (3407 JT), Hoya (7741 JT), Nissha (7915 JT), Mitsubishi Chemical Holdings (4188 JT), Sumitomo Chemical (4005 JT), Showa Denko (4004 JT), Mitsui Chemicals (4183 JT), Sumco (3436 JT), Nissan Chemical (4021 JT), Kuraray (3405 JT), Tosoh (4042 JT), Ube Industries (4208 JT), Kaneka (4118 JT), Central Glass (4044 JT), Tokuyama (4043 JT), KH Neochem (4189 JT), Dexerials (4980 JT), Mitsubishi Gas Chemical (4182 JT), Taiyo Nippon Sanso (4091 JT), Nippon Shokubai (4114 JT), Shin-Etsu Polymer (7970 JT), Daikin (6367 JT), Daifuku (6383 JT), Nomura Research Institute (4307 JT)
• Company Interview: JSR (4185 JT)
• Participated in strategy call with: Toray (3402 JT)
• Watched earnings webcast of: Rakuten (4755 JT), Sansan (4443 JT)