PSA Weekly Japan Research Round Up - for the week to June 8, 2018

PSA Weekly Content at a Glance:
The Weekly Comment by Pelham Smithers
"I respect Bitmain, but we will top them", states GMO Internet CEO Masatoshi Kumagai. Pelham Smithers assesses GMO's chances.
Reports / Flash Notes Summaries
1. US Auto Sales May: SAAR Drops Below 17mil Units
2. Internet: Internet Initiative Japan (3774 JP) – New Sources of Growth in MNVO and Cryptocurrency
3. SMC (6273 JP) – Expanding Share via Semiconductors
Company / Sector / Thematic Comments
1. What are Japan’s Equivalents to FATMANG?
2. Hot Apps Having Implications for Japanese Mobile Game Stocks
3. Nintendo Shares Slump Early in the Week Despite Pokémon for Switch
4. Capcom (9697 JP) Sets Date for Rockman XI Release
5. How Different Will Japanese Casinos Be?
6. Trouble in the IC Market?
7. Engadget Flags the Mirrorless Issue
8. Why Our Meeting with Canon (7751 JP) Was Worrisome
9. Value in Hitachi (6501 JP)
10. IIJ (3774 JP) in Major Crypto / Blockchain Move
11. Nitto Denko (6988 JP) to Benefit from OLED and LCD
12. Fujifilm (4901 JP) – Know When to Walk Away
13. Petrochemical Spreads are Exceeding Guidance
14. Japan Slow to Recognize Ocean Plastic Pollution
15. Honda (7267 JP) and GM to Cooperate on Batteries
16. Japanese Automaker’s May US Sales Performance
17. Mazda3 (7261 JP): Smart Looks and Smart Technology
18. Further Issues with Subaru’s (7270 JP) Test Procedures
19. Attractive 3yr Targets for Daikin
20. Fanuc (6954 JP) Automotive Robotics Likely to Rise in FY18
21. SoftBank’s (9984 JP) ARM to Sell Majority Stake in China Venture
22. Kakaku.com (2371 JP): 25,000 Restaurants Have Signed Up for the New Pricing Plans
23. Start Today (3092 JP): ZOZO Launches New Product Line
24. Little Change to Japanese GDP Numbers
25. Japan Capex +17% in F18 – Nikkei Survey
26. Disappointing April Wage Data
PSA Company Visits, Tours and Interviews
• Visited Mitsubishi Chemical Holdings (4188 JP), Kuraray (3405 JP), Zeon Corp (4205 JP)
• Attended earnings meetings at Nihon Dengi (1723 JP), Rasa Industries (4022 JP)
• Attended information meeting at Ube Industries (4208 JP)
• Conference call with Yahoo Japan (4689 JP)
PSA in the Press
PSA quoted by Reuters and the Wall Street Journal on the SoftBank / ARM sale [ https://www.wsj.com/articles/softbanks-arm-holdings-to-sell-majority-stake-in-china-business-1528204432 ]
Weekly Market Comment by Pelham Smithers
“I respect Bitmain, but we will top them” GMO Internet CEO Masatoshi Kumagai.
Bitmain is one of those “very large companies that you may never have heard of”, although that may be about to change as indications are that the company is looking to IPO. The company, which is only five years old, makes Bitcoin (XBT) mining chips. In 2017, it purportedly had revenues of US$2.5bil, such was the demand from the burgeoning crypto-currency mining industry. Bitmain’s chips are generally sold as part of a mining rig – Antminer – which sells for $400~$3,000. Such rigs resemble servers, but with much of the innards taken out and replaced by between 20 and 400 identical chips. Bitmain was, by a long way, the largest such provider of these rigs in 2017, with an estimated market share of 75%. Behind it was Canaan Technologies with a share of around 15%. Canaan has already filed for an IPO with a targeted valuation of around US$1bil, suggesting that should Bitmain proceed as well, it could probably garner a valuation of around US$8bil.
It is into this market that GMO Internet (9449 JP) is stepping, with its own 7nm based rig: the B2 Miner. Priced at US$1,999, the B2 should provide a hash rate of 24terahashes per second (TH/s) with a power consumption of 1,950W, which equates to 81W per TH/s. In comparison, Bitmain’s Antminer S9 – priced at US$2,100 – generates 14TH/s at a power consumption of 1,300W, which equates to 93W per TH/s. GMO started taking orders on Wednesday (6 June) for delivery in October.