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

PSA Today Feb 20: Yen weaker but shares slide / Casino tax rates / Sony in ride-hailing app move / Mitsubishi Corp raising stake in MMC / Nabtesco's resilience - Nikkei -0.72%

Japan Market Comment by Pelham Smithers, Julie Boote and William Nestuk

Nikkei ¥21,925.10 -¥224.11/ -1.01%); Topix ¥1,762.45(-¥12.70 / -0.72%); ¥/$106.84

Tags: Nissha (7915 JP), Hodogaya (4112 JP), Ulvac (6728 JP), Chugai Pharmaceutical (4519 JP), Tokyo Steel (5423), Fujitsu (6702 JP), Japan Cash Machine (6418 JP), Universal Entertainment (6425 JP), Sony (6758 JP), Checker Cab, Daiwa Motor Transportation (9082 JP), Uber, Daiichi Koutsu Sangyo (9035 JP), Alphabet (GOOG US), Apple (AAPL US), Mitsubishi Corp. (8058 JP), Mitsubishi Motors (7211 JP), Nissan (7201 JP), Nabtesco (6268 JP)

 

Main Points at a Glance

·        Japanese equities slide despite yen weakness as US bond yields rise

·        Government suggests casino tax rate starting at 30%

·        Sony in ride-hailing app move

·        Mitsubishi Corp. to raise stake in Mitsubishi Motors

·        The resilience of Nabtesco speaks to its longer-term robot gear prospects

Underlyings
Alphabet Inc. Class C

Apple Inc

Chugai Pharmaceutical Co. Ltd.

Chugai Pharmaceutical is a pharmaceutical company. Along with its subsidiaries, Co. is engaged in the research and development of new prescription medicines and the subsequent manufacturing, marketing and distribution activities. Co. sells its pharmaceutical products to the nationwide appointed stores in Japan, as well as in overseas, such as Germany, the U.K., France, Taiwan, China, South Korea and the U.S. Co., through its subsidiaries, is also involved in the management of research facilities, and the research on drug discovery, as well as the provision of literature research services for pharmaceutical information, and pharmaceutical academic information.

Daiwa Motor Transportation

Daiwa Motor Transportation is a holding company engaged in the passenger automobile transportation business. Passenger Automobile Transportation segment is engaged in the operation of taxicabs, limousines and limousine taxis. Real Estate segment is engaged in the leasing, brokerage, trading and management of office buildings and condominiums, as well as the provision of cleaning services. Sales segment is engaged in the sale of fuel and industrial materials and products, the manufacture and sale of metal products, and the sale and repair of taximeters.

Fujitsu Limited

Fujitsu is the parent company of a group engaged in the information and communication technology businesses. Technology Solutions segment provides system integration, application development and integration, system consulting, IT and business process outsourcing services, cloud computing, SAP and Oracle applications services and managed infrastructure services (network and communication, technical and maintenance and service desk services). The segment also offers security platforms, servers, storage systems and software. Ubiquitous Solutions segment offers desktop PCs, notebook PCs, mobile phones and wearable devices. Device Solutions segment offers LSI devices and electronic components.

Hodogaya Chemical Co. Ltd.

Hodogaya Chemical is engaged in the manufacture and sale of organic industrial chemicals. Co. operates in five business segments. The Functional Pigment segment manufactures and sells charge-controlling agents for toners, organic photo conductor materials, organic electroluminescence materials. The Functional Resin segment offers polytetramethylene-ether-glycol (PTG), urethane- and cement-based construction and civil engineering materials. The Basic Chemical segment provides hydrogen peroxide and others. The Agro-science segment is engaged in the manufacture and sale of agrichemical ingredients and agents. The Logistics segment is engaged in the transportation and storage of Co.'s products.

Japan Cash Machine Co. Ltd.

Japan Cash Machine is engaged in the manufacture and sale of money-handling machines. Co.'s principal products include bill validator units, bill recycling units, bill and coin recyclers, printer units, bill acceptors, change machines, coin and bill collection machines, bill counters, automatic currency exchange machines and original equipment manufacturing products for the casino/gaming, banking, retail and transportation markets. Co. also offers automatic token supply systems, POS systems, pachinko machines, bill dispensers and token management systems for pachinko parlors. Co. is also engaged in the operation of game arcades and the sale of air purification systems.

Mitsubishi Corporation

Mitsubishi is a trading company. Co. is engaged in the manufacture and market a wide range of products, including energy, metals, machinery, chemicals and living essentials through Co.'s domestic and overseas network. Co. is involved in diverse businesses by actively investing in areas, such as natural resources development and infrastructure; and the finance businesses. Co. is engaged in diversified businesses, such as creating new business models in the fields of new energy and the environment. Co.'s principal business segments are global environmental & infrastructure, industrial finance logistics & development, energy, metals, machinery, chemicals, living essentials, and others.

Mitsubishi Motors Corporation

Mitsubishi Motors and its affiliates are mainly engaged in the manufacture and sale of motor vehicles including passenger cars as well as component parts. Co. is engaged in the development, design, manufacture, assembly, sale and purchase, import and other transactions relating to automobiles, component parts and replacement parts, agricultural machinery and industrial engines; the sale and purchase of used automobiles; the sale of measuring equipment; and acting as insurance agents in accordance with laws relating to property damage insurance and to automobile damage indemnity insurance. In addition, Co. is involved in the provision of automobile leasing and sales finance services.

Nabtesco Corporation

Nabtesco is engaged in the design, manufacture, sales, and repair of industrial machinery and components. Co. operates in three business segments: component solutions, transport solutions and accessibility solutions. Co.'s principal products are high precision reducers and actuators for industrial robots, construction machinery, solar tracking equipment, automatic door drive units, automobile air-break systems, automatic testing/training equipment, connecting device, various types of actuators, remote control systems for marine vessels, automatic door systems, smoke exhausting systems and platform safety system as well as nursing care equipment and industrial equipment.

Nissan Motor Co. Ltd.

Nissan Motor, along with its subsidiaries and associated companies, is engaged in the manufacture and sale of vehicles, marine products and related parts; and the provision of finance services throughout world. Co.'s principal businesses are automobile and sales financing. Automobile segment manufactures electric vehicles, sedans, sport coupes, compact cars, mini vans, SUVs, pick-up trucks, and station wagons. Co.'s principal brand names include "Leaf," "Infiniti," "Murano," "Altima," "Maxima," "Sentra," "Quest," "Cedric," "Days Roox," "e-NV200," "Note e-Power," "Caravan," "Wingroad," "GT-R," "Farilady Z, among others. Sales Financing segment provides sales financing services..

Nissha Co.Ltd.

Nissha is engaged in the production of general printed matter in the fields of art and commercial printing as well as surface decoration of products technology. Co. manufactures IMD and IML, metallized paper, and heat transfer foils used for simultaneous molding and printing of plastic products and decorations for mobile phones, notebook PCs, automotive interiors and home appliances; and manufactures functional devices such as film based Touch Sensors "Fine Touch" used in tablet devices, smartphones, game consoles, industrial equipment and automotive. Co. also manufactures and sells its own brand products to medical institutions and provides marketing and sales promotion materials.

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.

Sumitomo Mitsui Financial Group Inc.

Sumitomo Mitsui Financial Group is a holding company of the group mainly engaged in the provision of finance services. Co. offers services include deposits, loans, securities transaction, securities investment, domestic and foreign exchange, futures trading, bond fiduciary and registration, trust, security investment trust and insurance over-the-counter sales; leasing business; securities business; consumer finance, automobile sale finance business, venture capital business, business consulting, membership business, loan business, factoring, system development, information processing, money collection, swap related and investment adviser, among others.

Tokyo Steel Manufacturing Co. Ltd.

Tokyo Steel Manufacturing is mainly engaged in the manufacture and sale of electric-arc-furnaces, as well as a recycler of steel scrap. Co.'s primary products include H beams, sheet piles (U-shaped steel-sheet piles), I beams, checkered H-beams, channels, reinforcing bars, heavy plates, hot rolled coils, pickled and oiled coils (P/O coils), hot-dip galvanized coils (T-Zinc, T-alloy), checkered coils, and steel sheets. As of Mar 31 2016, Co. maintains four domestic plants in Aichi, Okayama, Fukuoka and Tochigi prefectures and a steel center in Kagawa prefecture.

ULVAC Inc.

ULVAC is engaged in the manufacture and sale of vacuum systems and equipment. The Vacuum Machinery segment provides sputtering systems, CVD systems, vacuum evaporation systems, etching systems, annealing systems, ion implantation systems, vacuum furnaces and vapor deposition polymerization systems for semiconductor processing, LED devices, photovoltaics, optic films, LCD displays, magnetic sensors, and electronic materials; and vacuum components including vacuum pumps, gauges, leak detectors, vacuum valves, and vacuum parts. The Vacuum Application segment provides sputtering target materials, evaporation deposition materials, and titanium and tantalum processing products.

Universal Entertainment Corporation

Universal Entertainment and its affiliates are mainly engaged in the development, manufacture and sale of pachislot and pachinko machines, other game machines and peripheral equipments. The Pachislot and Pachinko segment is engaged in the development, manufacture, sale and rental of pachislot and pachinko machines; the development, manufacture and sale of peripheral equipment; and the procurement of units consisting of parts and materials. The Casino Report segment operates casino resorts. In addition, along with its affiliates, Co. is engaged in the media and broadcasting businesses, the investment management, and the operation and management of online Shogi (Japanese chess) games.

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
Julie Boote

Pelham Smithers

William Nestuk

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