Report
Julie Boote ...
  • Pelham Smithers
  • Thao Nguyen

PSA Today Feb 7: Just ahead / Sony's opportunity set / Taiyo Yuden revises up / SoftBank's complicated Q3 / Mazda earnings jump / Kakaku.com struggles / GREE cheap for a reason - Nikkei +0.16%

PSA Today Feb 7: Japan Market Comment by Pelham Smithers, Julie Boote and Thao Nguyen
Nikkei ¥21,645.37(+35.13 ¥1,071.88 / +0.16%); Topix ¥1,749.91 (+¥6.50 / +0.37%); ¥/$109.17
Tags: Sony (6758 JP), Sega Sammy (6460 JP), Square Enix (9684 JP), Toyota (7203 JP), Nomura (8604 JP), Nintendo (7974 JP), Canon (7751 JP), Fanuc (6954 JP), Netflix (NFLX US), Alibaba (BABA US), SBI Holdings (8473 JP), Apple (AAPL US), Facebook (FB US), Taiyo Yuden (6976 JP), Murata (6981 JP), SoftBank (9984 JP) , Sprint (S US), Mazda (7261 JP), Kakaku.com (2371 JP), LCL Inc., GREE (3632 JP)  

Main Points
• Market lower on Wall Street sell-off
• Square Enix’s solid 3Q performance
• Sega Sammy: Pachislot rule change hits 3Q performance
• Toyota: Q3 earnings lifted by currency
• Mitsubishi Motors: Q3 Earnings Lifted by Asian Operations
• Stunning earnings from IHI’s Aero-Engine Division and a surprise recovery in the Boiler business
• GungHo reports another year of declines 

Underlyings
Alibaba Group Holding Ltd. Sponsored ADR

Apple Inc

Canon Inc.

Canon and its subsidiaries are engaged in the manufacture and sale of office multifunction devices, plain paper copying machines, laser printers, inkjet printers, cameras and lithography equipment. Co. sells its products principally under the Canon brand name and through sales subsidiaries. Each of these subsidiaries is responsible for marketing and distribution to retail dealers in an assigned territory. As of Dec. 31, 2017, Co.'s manufacturing is conducted primarily at 30 plants in Japan and 18 plants overseas. Co. operates its business in four segments: Office Business Unit, Imaging System Business Unit, Medical System Business Unit, and Industry and Others Business Unit.

Facebook Inc. Class A

Facebook is building and engaging products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and in-home devices. The company's products include: Facebook, which enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers; Instagram, which is a place where people can express themselves through photos, videos, and private messaging, and explore their interests in businesses, creators and communities; Messenger and WhatsApp, which are messaging applications; and Oculus, which connects people through its Oculus virtual reality products.

Fanuc Corporation

Fanuc is engaged in the development, manufacture and sale of CNC systems as well as application products based on its engineering. Co.'s principal products include Factory Automation (FA) products such as computer numeric control (CNC) systems and laser products; The Robot including collaborative robot, arc welding robot, palletizing robot, mini/small/medium/large size robot and paint robot; and the he Robo-machine such as robodrill(compact machining center), roboshot (electric injection molding machine), robocut (wire-cut electric discharge machine) and robonano (ultra precision machine).

Mazda Motor Corp.

Mazda Motor and its affiliates are mainly engaged in the manufacture and sale of passenger and commercial vehicles. Co. provides compact vehicles, sports cars, sedans, mini vans, light cars, commercial vehicles, welfare vehicles and customized vehicles, as well as car accessories. Co.'s principal products are four-wheeled vehicles, gasoline reciprocating engines, diesel engines, and automatic and manual transmissions for vehicles. Co.'s principal brand automobiles include Demio, Axela, Atenza, CX-3, CX-5, CX-8, Roadster, Carol, Flair, Flair Wagon, Scrum Wagon, Bongo, Titan, Familia Van, and Scrum Van/Truck.

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.

Netflix Inc.

Netflix is engaged in subscription streaming entertainment service including TV series, documentaries and feature films across a variety of genres and languages. Members can watch as much as they want, anytime, anywhere, on any internet-connected screen. Members can play, pause and resume watching, without commercials. Additionally, several members in the United States subscribe to the company's DVD-by-mail service. The company improves its streaming content with a focus on a programming mix of content. The company's members can download a selection of titles for offline viewing. The company operates its business as a global operating segment.

Nomura Holdings Inc.

Nomura Holdings is a holding company and financial services groups in Japan and have worldwide operations. Co., through its subsidiaries, is engaged in the provision of a range of financial services including brokerage, trading, underwriting, M&A financial advisory services, merchant banking, and development and management of investment trusts and investment advisory services to clients such as individuals, corporations, financial institutions, governments and governmental agencies. Co. operates offices in countries and regions worldwide including Japan, the U.S., the U.K., Singapore and Hong Kong Special Administrative Region ("Hong Kong") through Co.'s subsidiaries.

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.

Sega Sammy Holdings Inc.

Sega Sammy Holdings is a holding company mainly engaged in the development, manufacture and sale of slot and pachinko machines, amusement equipment and home-use TV game software. Co., through its affiliates, operates three business segments: pachislot and pachinko machines, entertainment contents, and resort. Co. is engaged in the development, manufacture and sale of pachislot and pachinko machines; the development and sale of digital game software, packaged game, software and amusement machines; the development and operation of amusement centers, hotels and theme parks; the planning, production and sales of animated films; and the development, manufacture and sales of toys.

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.

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.

Square Enix Holdings Co. Ltd.

Square Enix Holdings is a holding company that is mainly engaged in the entertainment industry. Co., through its subsidiaries, operates in four business segments. The Digital Entertainment business is engaged in the design, development, sale, licensed sale and operation of digital entertainment contents focusing on computer games. The Amusement segment is engaged in the operation of amusement facilities, the design, development, manufacture, sale and rental of amusement equipment. The Publishing segment is involved in the publication of comic magazines, books and game related books. The Rights Property segment is involved design, production, sale and grant of secondary works.

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.

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.

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

Thao Nguyen

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