The PSA Japan Research Round-Up for the week ending February 02, 2018
Contents at a Glance
The Weekly Comment by Pelham Smithers
Pelham Smithers is on the alert for a change in market leadership.
Company / Sector / Thematic Comments
List of PSA Published Reports Since Q3 2017 to Date
PSA Company Visits, Tours and Interviews
Weekly Market Comment by Pelham Smithers
During January, Topix gained 1.1% to 1,836, which is only shabby in light of (1) the performance of equities globally that month and (2) the performance of the market after the first two days of trading, after which Topix had closed at 1,880. Annualized it is a 14% return. Adding in 2% dividends and removing 1% inflation, that is some way ahead of the 6~7% total real return equities are supposed to deliver. This of course was the story in 2017. While the Japanese stock market did fine (Topix gained 20%), if you ran an Asia-Pac fund you still needed to underweight Japan. Essentially 2% real growth plus 1% inflation = 3% top line growth; enough to power “winners” but not enough to drive the market as a whole. Furthermore, what growth there was generally came in the export and capital goods sectors, so you had a narrow but clearly defined group of winners.
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.
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).
Hitachi Construction Machinery is a manufacture of construction machinery. Co.'s principal business segments are construction machinery and solution. Along with its subsidiaries and associated companies, Co. is engaged in the manufacture, sale, after-sale services and rental of construction machinery, such as mini excavators, medium excavators, large excavators, loading shovels, wheel loaders, demolition equipment, metal recycling equipment, forest machines, rigid dump trucks, compaction equipment, cranes, foundation machines, double-front work machine and mine management systems.
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".
JSR is a manufacturing company. Co.'s principal business segments are Elastomer, Synthetic Resin, and Diversified. Co. is engaged in the manufacture and sale of synthetic rubber products, such as styrene butadiene rubber (SBR), and butadiene rubber (BR), thermoplastic elastomers; emulsion products such as SBR latex and others; the manufacture, processing and sale of acrylonitrile butadiene styrene (ABS) resin, acrylonitrile ethylene styrene resin and other synthetic resin products. Co. is also engaged in the manufacture and sale of materials for semiconductor manufacture, flat panel displays, optical instruments and functional chemicals, as well as the sale of manufacturing technology.
Mitsubishi Electric is engaged in the manufacture and sale of electrical and electronic equipment. Energy and Electronic Systems segment offers turbine generators, nuclear power plant equipment, transformers and motors. Industrial Automation Systems segment offers programmable logic controllers, inverters, human-machine interfaces and magnetic switches. Information and Communication Systems segment offers wireless and wired communications systems, surveillance cameras and satellite communications equipment. Electronic Devices segment offers power modules, high-frequency devices and optical devices. Home Appliances segment offers LCD televisions, room air conditioners and refrigerators.
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.
Shin-Etsu Chemical is mainly engaged in the manufacturing and sales of polyvinyl chloride and organic chemicals, silicon, functional chemicals, semiconductor silicon, electronic and functional materials, and others. Co.'s principal products include polyvinyl chloride, caustic soda products, methanol, chloromethane, silicon products, cellulose derivatives, silicon metal, poval (polyvinyl alcohol), synthetic pheromones, semiconductor silicon products, rare earth magnets, encapsulation materials, photoresists, photomask blanks, synthetic quartz products, epoxy molding compounds, pellicles, and resin processed products. Co. is also engaged in the export of plant equipment and others.
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.
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.
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