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

The Must Read PSA Weekly Research Round-Up: Highlighting a report on Apple iPhone Demand and Outlook / Comments on Japanese eSports names (week ending Feb 23)

The PSA Japan Research Round-Up for the week ending February 23, 2018
Contents at a Glance
The Weekly Comment by Pelham Smithers:
Pelham Smithers discusses how, while we aren’t yet at the point where underweighting Japan is proving costly, we are certainly at the point where it is a key subject of debate.

Reports / Flash Notes Summaries
1. Apple iPhone Demand and Outlook
 Company / Sector / Thematic Comments
1. eSports Emerging as a Significant Investment Theme
2. Sony (6758 JP): Jumanji Hits Staggering Box Office Receipts / Taxi Cab App Move / New Phone Line-up for MWC2018
3. US Video Game Sales +59% YoY in January
4. Government Considering Casino Income Tax Rate Starting at 30%
5. Japan’s Solar Shipments Still Slumping
6. Ricoh (7752 JP) Taps its Rainy Day Fund
7. Zeon (4205 JP) to Enter FY18 with Good Momentum
8. Hitachi Chemical (4217 JP) Preps for Solid-State Lithium-Ion Batteries
9. Ube Industries (4208 JP): The Latest to Discover Quality Control Problems
10. Mitsubishi Corp (8058 JP) to Raise Stake in Mitsubishi Motors (7211 JP)
11. Toyota (7203 JP) to Reduce Rare-Earth Metal Use for Electric Motor Magnets
12. Honda (7267 JP) to Benefit from Diversification
13. Bridgestone (5108 JP) Forecasts Higher Growth for FY18
14. The Resilience of Nabtesco (6268 JP) Speaks to its Longer-term Robot Gear Prospects
15. Nikkei Preview Depresses Sumitomo Heavy (6302 JP)
16. Denso (6902 JP) / Aisin (6902 JP) Gap Closes Again
17. CyberAgent (4751 JP): Good Progress Continues
18. Is GungHo’s (3765 JP) Recent Good Run Justified?
19. SoftBank (9984 JP) Seeks Seats on Swiss Re Board
PSA Company Visits, Tours and Interviews
• Visited Japan Display (6740 JP), Sumco (3436 JP), Showa Denko (4004 JP), Toray (3402 JP), Mitsubishi Chemical Holdings (4188 JP), Tokyo Ohka Kogyo (4186 JP), Teijin (3401 JP), Ube Industries (4208 JP), Nissan Chemical (4021 JP), Mitsubishi Electric (6503 JP), Comsys (1721 JP)
• Telephone Interviews with Ube Industries (4208 JP), Kitanotatsujin (2930 JP)
Weekly Market Comment by Pelham Smithers
The all industry activity index (AIAI) is one of those unusual pieces of data that isn’t rushed out to meet any deadline. We are almost through February and we have just had the December figure. At one level this means the data point is pretty useless, since if anyone wanted to use it to help predict the 4Q GDP figure – well they are a bit late, because the 4Q figure came out earlier this week. However, at another level, it is very useful, because it doesn’t really require revising. In the past 12 months, one data point – May’s – needed changing from -0.8% MoM to -0.7% MoM, but that’s it. This means the AIAI could well be a better indicator of how the economy performed than the first iteration of GDP, which in recent quarters has seen some sizable revisions. Certainly, the readings through December for the AIAI do indicate that Japanese industrial activity was much better than the headline Japanese 4Q GDP figure would indicate. Overall, industrial activity increased 0.7% QoQ in the 4Q, or 2.8% annualized. In comparison 4Q GDP came in at +0.1% QoQ, +0.5% annualized. It should be noted that the public sector was quite a drag on performance but even so, private sector demand was only up 0.3% QoQ. Now, there are two ways that we can read the strong AIAI figure(s) for December / 4Q as a whole. First, it may well indicate that the 4Q GDP number will be revised up. Second, it may suggest that this activity ends up being picked up in 1Q numbers. 

Underlyings
Hitachi Chemical Company Ltd.

Hitachi Chemical and its affiliates are mainly engaged in the manufacture, process, and sale of functional materials and advanced components and systems. Co.'s principal products include electronics materials, such as semiconductor epoxy molding compounds and die bonding paste and insulating varnishes; inorganic materials, such as lithium-ion batteries materials and carbon products; functional resin and adhesive film for display; photographic sensitive films; automotive products, such as molded plastics, friction materials and powder metal products; automotive batteries, industrial batteries and capacitor; electrical equipment, such as printed wiring boards; and diagnostics equipment.

Hon Hai Precision Industry Co. Ltd.

Hon Hai Precision Industry is engaged in manufacturing, processing and selling of connectors, cable, enclosures, wired and wireless communication products, optics products, power supply modules, and assemblies for use in the information technology, communications, automotive equipment, precision molding, automobile, and consumer electronics industries. Co.'s products include input and output connectors, integrated circuit (IC) cables, memory IC connectors, system connectors, network terminals, scanners, keyboards, monitors, mouse, network integrated connection cables, digital network optical connectors, filtering connectors, electrostatic prevention connectors, and high frequency connectors.

Ricoh Company Ltd.

Ricoh is engaged in the development, manufacture, sale and service of office equipment and printing equipment. Office Printing segment offers multifunctional printers, copiers, laser printers, digital duplicators, wide format printers, facsimile, scanners and related parts and supplies. Office Service segment offers PCs, servers, network equipment, projectors and unified communication systems for video/web conferencing. Commercial Printing segment offers cut sheet printers, continuous feed printers, related parts and supplies. Industrial Printing segment offers inkjet heads, imaging systems and industrial printers. Thermal Media segment offers thermal paper and thermal transfer ribbons.

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.

Zeon Corporation

Zeon is the parent company of a group engaged in the manufacture and sale of chemical products. Along with its affiliates, Co. operates in three business segments: elastomer, specialty materials, and others. Co.'s principal products include synthetic rubbers; synthetic latices; chemicals, such as C5 petroleum resins and thermoplastic elastomers; specialty chemicals, such as synthetic aroma chemicals and industrial chemicals; information materials, such as elastromics materials and polymerized toners; specialty plastics, such as cyclo-olefin polymers; optical materials; medical products; RIM formulations; RIM products; paints; butadiene extraction technology; housing materials; and others.

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

Other Reports on these Companies
Other Reports from Pelham Smithers Associates Ltd

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