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

PSA Today Feb 27: Wall Street and Nikkei up/ Rakuten's Entry into Mobile / Honda's overseas production/Mtb Chem's discount/ Alps and Alpine merger; Clarion/ CyberAgent's wonderful AWA app - Nikkei +1.07 %

Japan Market Comment by Julie Boote, Joel Scheiman, William Nestuk and Thao Nguyen

Nikkei ¥22,389.86 (+¥236.23 / +1.07%); Topix ¥1,790.34(+¥15.53 / +0.88%); ¥/$106.89

Tags: Inpex (1605 JP), Apple (AAPL US), Nidec (6594 JP),TDK (6762 JP), Taiyo Yuden (6976 JP), Yaskawa (6506 JP), Wacom (6727 JP),  Anritsu (6754 JP), Nextgen (3842 JP),  Howa Machinery (6203 JP), Ishikawa Seisakusho (6208 JP), SoftBank (9984 JP), Rakuten (4755 JP), DoCoMo (9437 JP), KDDi (9433 JP),  Yahoo Japan (4689 JP), Start Today (3092 JP), Kitanotatsujin (2930 JP), Fast Retailing (9983 JP), Amazon (AMZN US), Hutchinson, Vodafone (VOD LN), T-Mobile (TMUS US), Honda (7267 JP),  Mitsubishi Chemical Holdings (4188 JP), Sumitomo Chemical (4005 JP), Petro Rabigh, Mitsubishi Tanabe Pharma (4508 JP), Johnson & Johnson (JNJ US), Asahi Kasei (3407 JP), Alpine (6816 JP), Alps (6770 JP), Clarion (6796 JP), Hitachi (6501 JP), CyberAgent (4751 JP), LINE (3938 JP)

Main Points at a Glance

  • Nikkei responds to Wall Street’s rally
  • Rakuten’s move to be a mobile provider
  • Strong Overseas Production for Honda
  • Mitsubishi Chemical may continue to trade at a discount
  • “Fair Merger" timing brought forward at Alps / Alpine…
  • …Clarion fails to benefit
  • CyberAgent’s AWA: the best non-game app of the year
Underlyings
Alpine Electronics Inc.

Alpine Electronics is engaged in the manufacture and sale of audio equipment and information and telecommunication equipment for automobiles. Audio Equipment segment manufactures head units, digital media receivers, speakers, amplifiers, subwoofers, audio processors, Apple CarPlay (display and controller units for iPhones), mobile media stations and smartphone accessories. Information & Communication Equipment manufactures car navigation systems, rear seat overhead monitors, view cameras and smartphone applications.

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.

Amazon.com Inc.

Amazon.com serves consumers through its online and physical stores. The company also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, and Ring, and the company develops and produces media content. The company operates customer service centers and provides programs that enable sellers to grow their businesses, sell their products in its stores, and fulfill orders through the company The company serves developers and enterprises of various sizes, including start-ups, government agencies, and academic institutions, through its Amazon Web Services segment, which provides a set of global compute, storage, database, and other service offerings. The company also provides services, such as advertising.

Anritsu Corporation

Anritsu is engaged in the manufacture and sale of measuring instruments and testing equipment. Test and Measurement segment offers testing and measuring instruments and systems for digital communications and IP networks, optical communications, mobile communications, RF and microwave communications and millimeter wave communications. PQA (Products Quality Assurance) segment offers checkweighers, automatic combination weighers, package inspection equipment, contamination detectors and production management systems for food, pharmaceutical and cosmetics manufacturers. Co. is also engaged in the manufacture of network appliances and optical devices, as well as the real estate leasing.

Apple Inc

Asahi Kasei Corporation

Asahi Kasei is a holding company. Co., through its affiliates, operates in three principal business segments. Material segment manufactures and sells petrochemicals, synthetic rubber, performance materials, household products (plastic wrap and storage bags), cleaning agents, elastic polyurethane filament, and battery separators. Homes segment is engaged in the development, construction and sale of unit houses and apartment buildings; and the provision of construction materials. Health Care segment manufactures and sells pharmaceuticals, diagnostic reagents, and critical care devices. In addition, Co. is engaged in the electricity supply, engineering, and employment agency businesses.

Clarion Co. Ltd.

Clarion is engaged in the development, manufacturing, sales and services of in-vehicle information devices, car audio equipment, safety and information systems and cloud-based information network services for vehicles. Co.'s principal products include car navigation systems, multimedia source units, audio units, speakers, amplifiers, subwoofers, digital sound systems, rear view cameras and smart access platforms (in-vehicle cloud connectivity platforms). Co. also provides cameras, monitors, driving recorders, collision avoidance systems, safe driving support systems, telematics control units, navigation systems and audio units for commercial vehicles.

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.

FAST RETAILING CO. LTD.

Fast Retailing is engaged in the control and management of overall group activities as a holding company. Co., through its subsidiaries, is mainly involved in the operation of chain stores, selling casual clothing and accessories at reasonable prices, called "UNIQLO" throughout Japan as well as in overseas. Co., through its subsidiaries, is also engaged in the planning, manufacture and sale of clothing under the brand names of "GU," "Theory," "COMPTOIR DES COTONNIERS," "PRINCESSE tam.tam" and "J Brand." In addition, Co. is engaged in the leasing of real estate.

Hitachi Ltd.

Hitachi and its subsidiaries are engaged in the development, manufacture and sale of diversified product mix ranging from electricity generation systems to consumer products and electronic devices. Co.'s businesses are diverse, and include information and telecommunication systems, social infrastructure and industrial systems, electronic systems and equipment, construction machinery, high functional materials and components, automotive systems, life & eco systems, financial services, and others including logistics services, optical disk drive, as well as real estate business.

Honda Motor Co. Ltd.

Honda Motor is the parent company of a group mainly develop, manufacture and distribute motorcycles, automobiles, power products, and also provide financing for the sale of those products. Principal manufacturing facilities are located in Japan, the United States of America, Canada, Mexico, the United Kingdom, Turkey, China, India, Indonesia, Malaysia, Thailand, Vietnam, Argentina, and Brazil. Co.'s principal business segments are motorcycles, automobiles, financial services, and power products & other business. Co.'s principal automobile products include passenger cars such as "Legend," "Accord," "Inspire," "Civic," "Insight," "City," "Acura RL," "Acura TL," "Acura TSX," and "Acura CSX".

Howa Machinery Ltd.

Howa Machinery is engaged in the manufacture and sale of machining centers, pneumatic and hydraulic equipment, firearms, construction machinery and specially-equipped vehicles. Co.'s principal products include horizontal and vertical machining centers, transfer lines, standard machine tool units for transfer lines, power chucks, rotating cylinders, rodless cylinders, hydraulic clamp cylinders, rotary actuators, exposure systems for printed circuit boards, testing systems for mounted circuit boards, street sweepers, industrial sweepers, scrubbers, rifles, among others. In addition, Co. is engaged in the real estate properties leasing and transportation services.

Hutchison Telecommunications Hong Kong Holdings Limited

Hutchison Telecommunications Hong Kong Holdings is an integrated telecommunications company based in Hong Kong. Co. is engaged in the operations of GSM dualband and 3G Mobile services in Hong Kong and Macau under the "3" brand. Co. is also engaged in the provision of local and international fixed-line services to customers under the "HGC" brand. Co. offers its customers a wide range of telecommunications services - from voice-driven services to high-speed information communication technology ("ICT") services - using its narrowband and broadband platforms. Co. is a majority owned subsidiary of Hutchison Whampoa Limited.

INPEX CORPORATION

INPEX is mainly engaged in the energy supply business on a global scale. Co.'s operations include acquisition of license blocks for oil and gas fields, exploration, development, production and sales of oil, natural gas and other mineral resources. Co. is involved in about 70 upstream projects located in 20 countries around the world such projects as "Sebuku Block Ruby Gas Field," "Abadi LNG Project," "Tangguh LNG Project," "Ichthys LNG Project," "Bayu-Undan Project," "Prelude FLNG Project" and other. Co. is engaged in the natural gas transportation, pipeline operation, maintenance and management; the refining domestic crude oil; and the storage and shipment of petroleum products.

Ishikawa Seisakusho Ltd.

Ishikawa Seisakusho is engaged in the manufacture and sale of industrial machinery. Co. operates in three business segments. Paper Machinery segment is engaged in the manufacture and sale of flexographic folder gluer machines and flexographic printers for corrugated board containers. Contract manufacturing segment is engaged in the contract manufacture of electronic components. Defense Equipment segment is engaged in the manufacture and sale of electronic components for defense equipment such as mine. In addition, Co. is engaged in the manufacture of electric components such as control panel and machined part for various machinery.

Johnson & Johnson

Johnson & Johnson is a holding company engaged in the research and development, manufacture and sale of a range of products in the health care field. The company has three business segments: Consumer, which includes a range of products focused on personal healthcare used in the beauty, over-the-counter pharmaceutical, baby care, oral care, women's health and wound care markets; Pharmaceutical, which is focused on six therapeutic areas: immunology, infectious diseases, neuroscience, oncology, cardiovascular and metabolism and pulmonary hypertension; and Medical Devices, which includes products used in the orthopaedic, surgery, interventional solutions, and eye health fields.

KDDI Corporation

KDDI is a telecommunications company. Along with its affiliates, Co. operates in four principal business segments: personal, value, business, and global. Co. is engaged in the sale of mobile handset; and the provision of mobile telecommunication services under "au" brand name, Internet contents, settlement service, and electronic money service for individual customers. Co. offers information and communication technology ("ICT") solution services and data center services for domestic corporate customers, overseas companies and individual customers. Co. is also involved in the call center business, the research and technological development, and the telecommunication facilities maintenance.

Kitanotatsujin

Kitanotatsujin Corporation is a Japan-based company mainly engaged in the e-commerce business. The Company is mainly engaged in the sale of health foods and beauty-related products through Internet, and the operation of related businesses, such as the order receipt and shipment business, the production of mail order Websites, the plan and production of sales promotion tools, as well as the development of systems. The Company provides its products through mail order Websites http://www.kaitekikobo.jp/ and http://www.kaitekikobo.jp/sp/ operated by the Company.

LINE Corp.

Line is a global platform for mobile messaging and communication services, as well as provides communication and content and advertising services. Communication and content are primarily provided to end users via various communication and content. Communication mainly includes LINE Stickers. Content includes LINE Games and LINE PLAY. Others within Communication and Contents include LINE Friends service. Advertising services are provided via LINE advertising, livedoor blog and NAVER Matome. LINE advertising includes "messenger ads" such as LINE Official Accounts, LINE Sponsored Stickers and LINE Point Ads and "performance ads" on services such as Timeline and LINE NEWS.

Mitsubishi Chemical Holdings Corporation

Mitsubishi Chemical Holdings is a holding company. Co., through its subsidiaries and associated companies are engaged in the manufacture and sale of chemical products, plastic products, and pharmaceuticals. Performance Products segment provides optical films, acetyl, high performance films, aqua solutions, high performance engineering plastics, fibers & textile, advanced polymers, high performance chemicals, and lithium-ion battery materials. Chemicals segment offers methyl methacrylate (MMA), petrochemicals, and carbon products. Industrial Gases segment supplies industrial gasses to a wide range of industries. Health Care segment manufactures and sells ethical pharmaceuticals.

Mitsubishi Tanabe Pharma Corporation

Mitsubishi Tanabe Pharma is engaged in the manufacture and sale of pharmaceutical products. Co.'s principal ethical drugs include agents for autoimmune diseases under the name of "Remicade" and "Simponi," agents for diabetes and kidney diseases under the name of "Tenelia" and "Kremezin," agents for central nervous system diseases under the name of "Ceredist," "Depas" and "Radicut" and vaccines including "Mearubik (vaccine for measles and rubella)," "TETRABIK (vaccine for diphtheria, pertussis, tetanus and polio)," influenza vaccines and varicella vaccine. Co.'s over-the-counter drugs include "Flucort f (agent for treatment of skin conditions)" and nutritional supplement drinks.

Nextgen Inc.

Nextgen Inc. Nextgen, Inc. is mainly engaged in provision of communication technology related solutions, focusing on voice communication. The Company is mainly engaged in development and sale of software products related to communication systems, as well as other various businesses such as production and sale of call recording products; development and sale of security related products; security diagnostic services; communication services using the cloud, and maintenance services. Its consumers include major domestic telecommunications carriers, general users and corporate users.

Nidec Corporation

NIDEC and its subsidiaries are primarily engaged in the design, development, manufacture and marketing of small precision motors, mid-size motors, machinery, electronic and optical components, and other products. Co.'s principal products are spindle motors for hard disk drives, motors for optical disk drives, small precision fans and other small motors; mid-size motors; test systems, measuring equipment, power transmission equipment, factory automation systems, card readers and industrial robots; camera shutters, camera lens units, switches, trimmer potentiometers, motor driven actuator units, processing and precision plastic mold products; and auto parts and pivot assemblies.

NTT DoCoMo Inc.

NTT DOCOMO is a mobile telecommunications carrier. Co. has three operating segments. The telecommunications segment includes mobile phone services (LTE(Xi) services and FOMA services), optical-fiber broadband service, satellite mobile communications services, international services and the equipment sales related to these services. The smart life segment includes video and music distribution, electronic books and other services offered through DOCOMO's "dmarket" portal, as well as finance/payment services, shopping services and various other services. The others segment primarily includes "Mobile Device Protection Service," as well as development, sales and maintenance of IT systems.

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.

SoftBank Group Corp.

SoftBank Group is a holding company. Domestic Telecommunications business provides mobile communication services, mobile devices, broadband services to retail customers, and telecom services to corporate customers in Japan. Sprint business provides mobile communication services and fixed-line telecommunication services in the U.S. Yahoo Japan business operates Internet-based advertising and e-commerce business. Distribution business distributes mobile devices overseas, and sells software and mobile device accessories in Japan. ARM business designs microprocessor intellectual property and related technology. SoftBank Vision Fund & Delta Fund business is engaged in the investment activities.

Sumitomo Chemical Co. Ltd.

Sumitomo Chemical is a chemical manufacturing company. Co.'s business is comprised of 5 sectors: Petrochemicals & Plastics Sector, Energy & Functional Materials Sector, IT-related Chemicals Sector, Health & Crop Sciences Sector, Pharmaceuticals Sector and Others. Co. is engaged in the manufacture and sale of inorganic and organic chemicals, synthetic fiber materials, metal acrylate, alumina and aluminum products, petrochemical, synthetic resin and rubber products, optical goods, color filters, materials for semiconductors, electronic materials, agrochemicals, fertilizers, agricultural materials, pesticide, dietary additives, pharmaceuticals and radioactive diagnostic products.

T-Mobile US Inc.

T-Mobile US provides mobile communications services, including voice, messaging and data, under its brands, T-Mobile and Metro? by T-Mobile, in the United States, Puerto Rico and the United States Virgin Islands. The company provides mobile communications services using its 4G Long-Term Evolution network and its 5G technology network. The company also provides various wireless devices, including handsets, tablets and other mobile communication devices, and accessories for sale, as well as financing through Equipment Installment Plans and leasing through JUMP! On Demand?. The company provides reinsurance for handset insurance policies and extended warranty contracts offered to its mobile communications customers.

Taiyo Yuden Co. Ltd.

TAIYO YUDEN is a manufacturer mainly engaged in the electronic component business. Co. is involved in the manufacture and sale of electronic parts such as ceramic condensers, inductors, ferrite-applied components, ferrite cores, high frequency dielectric components, circuits modules, energy devices and composite ceramic applied components, among others. Co. is also engaged in the temporary staffing services, as well as consultation services for environmental measurement.

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.

Vodafone Group PLC (ADR)

Wacom Co. Ltd.

Wacom is mainly engaged in the development, manufacture and sale of computer-input devices. Along with its subsidiaries, Co. operates in three business segments: brand, technology solution, and others. Co.'s principal services covers Wacom-branded hardware and software products as well as solutions, and consists of three business categories: high-end graphics; creativity tools for everyday life; and electronic document workflow coupled with security features. It is involved in the development, manufacture, and sale of computer input components, such as pen sensor components and touch sensor components for Smart phones, tablet PCs and e-book solutions; and computer aided design solutions.

Yaskawa Electric Corporation

Yaskawa Electric and its affiliates are mainly engaged in the manufacture and sale of electric motors, industrial robots and industrial electrical control systems. Co.'s principal products include AC/DC servomotors, spindle motors for machine tools, programmable controllers, numerical controls, general-purpose/special-system inverters, industrial robots, clean robots, vacuum robots, transfer systems in clean/vacuum rooms, industrial electrical control systems for metal processing, cold rolling and paper making, water supply/sewage control systems, power receiving/distribution panels, circuit breakers, high-voltage switchgears, and energy-saving motor drivers.

Z Holdings Corporation

Yahoo Japan is engaged in the provision of Internet advertising and e-commerce services. Media Business segment provides marketing and advertising services including paid search, display, in-feed video advertising and other advertising-related services for corporations; and Yahoo! News and media-related services. Commerce Business segment provides e-commerce related services including YAHUOKU! (net auction site), Yahoo! Shopping, ASKUL, LOHACO and other shopping websites; membership services including Yahoo! Premium, Yahoo! BB and other services; and financial and payment-related services including credit card, e-money, foreign exchange margin trading and other related services.

ZOZO Inc.

Start Today is mainly engaged in the electronic commerce ("EC") business. Along with its subsidiaries, Co. operates in three principal businesses: ZOZOTOWN, B to B, and FURIMA. The ZOZOTOWN business operates brand's online shop on ZOZOTOWN by handling their inventory on a consignment based contract. Co. also purchases fashion items from brands and resell them on each brand's online shop on ZOZOTOWN. Additionally, Co. purchases/resales used fashion products from/to its users. The B to B business supports the brands to operate their individual online stores. The FURIMA business offers users a smartphone application called "ZOZO FURIMA" to sell and purchase personal fashion items.

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

Thao Nguyen

William Nestuk

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