reports
- Pierre FerraguÊ
SoftBank investing $40bn in OpenAI: Our take.
Softbank’s late generative AI strategy is taking shape in an interesting way. For our initial thoughts on the matter, see the attached article.
- Pelham Smithers
PSA Strategy: Japan Stock Market Quarterly for 2025 Q2
In this quarterly strategy report, we look to evaluate where we are with regards the bull market conditions, and where those indicators might be headed, factoring in the downside risks, from Trump tariffs and the US economy, BoJ actions, Japanese earnings and valuations.
AMAT APPLIED MATERIALS INC.
6146 DISCO CORPORATION
5108 BRIDGESTONE CORPORATION
7751 CANON INC.
9697 CAPCOM CO. LTD.
4519 CHUGAI PHARMACEUTICAL CO. LTD.
4755 RAKUTEN INC.
9684 SQUARE ENIX HOLDINGS CO. LTD.
8473 SBI HOLDINGS INC.
6954 FANUC CORPORATION
4324 DENTSU GROUP INC.
6861 KEYENCE CORPORATION
6869 SYSMEX CORPORATION
8306 MITSUBISHI UFJ FINANCIAL GROUP INC.
6501 HITACHI LTD.
6305 HITACHI CONSTRUCTION MACHINERY CO. LTD.
7267 HONDA MOTOR CO. LTD.
6301 KOMATSU LTD.
6503 MITSUBISHI ELECTRIC CORP.
6723 RENESAS ELECTRONICS CORPORATION
7974 NINTENDO CO. LTD.
6594 NIDEC CORPORATION
7731 NIKON CORP.
8604 NOMURA HOLDINGS INC.
7733 OLYMPUS CORP.
4666 PARK24 CO. LTD.
2371 KAKAKU.COM INC.
9984 SOFTBANK GROUP CORP.
1803 SHIMIZU CORPORATION
4063 SHIN-ETSU CHEMICAL CO LTD
6758 SONY CORPORATION
7269 SUZUKI MOTOR CORP.
1801 TAISEI CORP
6857 ADVANTEST CORP.
4186 TOKYO OHKA KOGYO CO. LTD.
8035 TOKYO ELECTRON LTD.
7203 TOYOTA MOTOR CORP.
2413 M3 INC.
2160 GNI GROUP LTD.
3659 NEXON CO. LTD.
6098 RECRUIT HOLDINGS CO. LTD.
3769 GMO PAYMENT
6460 JP SEGA SAMMY
4385 MERCARI INC.
3993 PKSHA TECHNOLOGY INC.
9434 SOFTBANK CORP.
78320 BANDAI NAMCO
45870 PEPTIDREAM INC
3491 JT GA TECHNOLOGIES
3394 JT MONEY FOWARD
6532 JT BAYCURRENT CONSULTING (6532 JT)
4483 JMDC
4180 JP APPIER GROUP
TSE: 2980 SRE HOLDINGS CORP
4194 VISIONAL INC
6526 SOCIONEXT INC
5032 JT ANYCOLOR INC
5838 RAKUTEN BANK LTD.
5253 JT COVER CORPORATION (5253 JT)
9616 JT KYORITSU MAINTENANCE (9616 JT)
- Chris Hoare
Japanese Telcos Q3 FY24 review: Diverging expectations; NTT still pre...
Aggregate service revenue trended better on higher contribution from non-mobile, coupled with mobile improvement. Industry mobile was primarily driven by Softbank’s outperformance. Q3 EBITDA dropped on higher mobile marketing costs at NTT which the company seeks to offset through cost efficiencies. DOCOMO is the clear mobile underperformer, but we believe expectations for Fixed recovery is still low, plus there is IOWN optionality. NTT remains our preferred pick.
- Chris Hoare
Softbank Corp (Buy, ¥270, +35%) Q3 FY24 Quick Take: Widening mobile g...
Softbank Corp saw EBITDA accelerate, led by ongoing momentum in Media & EC and PayPay. As expected, the mobile gap with peers continue to extend as Softbank reported accelerated mobile growth and a growing ARPU.
- Pierre FerraguÊ
Stargate: Big thinking on the future of AI Infrastructure.
The Stargate announcement – The $500bn datacenter, was the opportunity for us to bring together a number of analyses we have carried out in recent weeks, to understand how the economics of AI Infrastructure will shape up over time. We bring together, in the piece we publish today, an initial perspective, which might be groundbreaking. This work will help us understand how the AI landscape will shape up in the next 2-3 years, expect more from us on that topic in coming weeks and months.
- Chris Hoare
Japanese Telcos Q2 FY24 review: Stable growth with better profitabili...
Service revenue slowed for the incumbents but stayed in the low-single digit band, with Softbank still ahead followed by NTT. Mobile divergence continues to play out with SB leading the pack and is likely to remain so in our view. Industry EBITDA improved as NTT inflected to growth and led to a strong EBIT beat this quarter.
- Chris Hoare
Softbank Corp (Buy, TP: ¥270, +40%) Q2 24 Quick Take: Beat across the...
Softbank printed a strong beat across its revenue and net profit, ahead by 5% and 6% respectively. Consequently, management raised its FY24 guidance by roughly 2% for Revenue, EBITDA and Net profit while EBIT was raised by 5.6%.
- Pelham Smithers
PSA Strategy: Japan Stock Market Quarterly 2024 Q4
When the BoJ raised rates in March, it had been 17 years since it had last done so, though the world was very different then. While the July rate hike was unlikely to move the economic needle, the question now is what else might follow the subsequent financial market maelstrom. Pelham Smithers discusses the outlook for Japan’s macro environment, what new fiscal policies the new PM might introduce, how the BoJ might react and the all-important trend in corporate earnings. This then leads us to...
6754 ANRITSU CORPORATION
7751 CANON INC.
4519 CHUGAI PHARMACEUTICAL CO. LTD.
4751 CYBERAGENT INC.
4755 RAKUTEN INC.
3107 DAIWABO HOLDINGS CO. LTD.
8473 SBI HOLDINGS INC.
6954 FANUC CORPORATION
4324 DENTSU GROUP INC.
6861 KEYENCE CORPORATION
4902 KONICA MINOLTA INC.
6988 NITTO DENKO CORP.
7752 RICOH COMPANY LTD.
6869 SYSMEX CORPORATION
3064 MONOTARO CO. LTD.
5801 FURUKAWA ELECTRIC CO. LTD.
5715 FURUKAWA CO. LTD.
7205 HINO MOTORS LTD.
6501 HITACHI LTD.
6305 HITACHI CONSTRUCTION MACHINERY CO. LTD.
7267 HONDA MOTOR CO. LTD.
7012 KAWASAKI HEAVY INDUSTRIES LTD.
9107 KAWASAKI KISEN KAISHA LTD.
6971 KYOCERA CORPORATION
8316 SUMITOMO MITSUI FINANCIAL GROUP INC.
6503 MITSUBISHI ELECTRIC CORP.
5632 MITSUBISHI STEEL MANUFACTURING CO. LTD.
5706 MITSUI MINING AND SMELTING COMPANY LIMITED
6966 MITSUI HIGH-TEC INC.
6902 DENSO CORPORATION
6701 NEC CORP.
6594 NIDEC CORPORATION
7201 NISSAN MOTOR CO. LTD.
4666 PARK24 CO. LTD.
6268 NABTESCO CORPORATION
2371 KAKAKU.COM INC.
9984 SOFTBANK GROUP CORP.
8136 SANRIO COMPANY LTD.
6758 SONY CORPORATION
5802 SUMITOMO ELECTRIC INDUSTRIES LTD.
6762 TDK CORPORATION
6976 TAIYO YUDEN CO. LTD.
6315 TOWA CORPORATION
7203 TOYOTA MOTOR CORP.
4208 UBE INDUSTRIES LTD.
8698 MONEX GROUP INC.
3774 INTERNET INITIATIVE JAPAN
3765 GUNGHO ONLINE ENTERTAINMENT INC.
2160 GNI GROUP LTD.
3659 NEXON CO. LTD.
3445 RS TECHNOLOGIES CO. LTD.
6269 MODEC INC
3769 GMO PAYMENT
68900 FERROTEC CORPORATION
9519 RENOVA
4385 MERCARI INC.
3993 PKSHA TECHNOLOGY INC.
3626 JT TIS INC
9434 SOFTBANK CORP.
TXG 10X GENOMICS INC CLASS A
TGIF 1933 INDUSTRIES
7071 AMVIS HOLDINGS
78320 BANDAI NAMCO
45870 PEPTIDREAM INC
4443 JT SANSAN (4443 JT)
3491 JT GA TECHNOLOGIES
3394 JT MONEY FOWARD
4480 MEDLEY
RRRP3 3R PETROLEUM OLEO E GAS
6532 JT BAYCURRENT CONSULTING (6532 JT)
3697 JT SHIFT INCORPORATED (3697 JT)
4483 JMDC
4180 JP APPIER GROUP
TSE: 2980 SRE HOLDINGS CORP
4194 VISIONAL INC
9552 M&A RESEARCH INSTITUTE
123F 123FAHRSCHULE SE
9616 JT KYORITSU MAINTENANCE (9616 JT)
9552 JT M&A RESEARCH INSTITUTE (9552 JT)
6544 JT JAPAN ELEVATOR SERVICES HOLDINGS (6544 JT)
6200 JT INSOURCE (6200 JT)
2154 JT OPEN UP GROUP (2154 JT)
- Chris Hoare
Softbank Corp (Buy, TP: ¥2,500, +40%) Q1 24 Quick Take: Tracking stro...
Topline beat estimates by 3%, underpinned by the outperformance from Enterprise and Distribution. For the first time since FY19, mobile ARPU has inflected to growth (+0.3%) with continued momentum in mobile service revenue. Both operating profit and bottom line are now tracking ahead of the full year’s guidance.
- Chris Hoare
Japanese Telcos From “rising tide” to “winner takes all” – Should you...
For several years, our thesis had been that a lack of meaningful impact by Rakuten would lift all 3 incumbents. However, the launch of integrated financial services products shifted this, and this has been confirmed we think by Q4 figures; Japan is now a “winner takes all” market, with SoftBank the winner.
- Chris Hoare
Softbank Corp (Buy, TP: ¥2,500, +33%) Q4 23 Quick Take: Bottom-line b...
Softbank delivered a strong beat on EBITDA and net profit this quarter, with mobile accelerating as the benefits of financial integration into mobile plans continued to flow through. Guidance was mixed however, impacted by the ¥150bn investments going into generative AI. As a result, compared to a scenario without these investments, the guided EBIT was lower by ¥30bn/year for FY24 and FY25, but in line with previous figures.
- Chris Hoare
Softbank Corp (Buy, TP: ¥2,500, +33%) SoftBank Corp looking to take a...
Bloomberg reports that SoftBank Corp is looking to take a majority stake in LY Corp. Our (very brief) thoughts below.
- Chris Hoare
LY Corp (Buy, TP: ¥585, +43%) Q4 FY23 Quick Take: Better than expecte...
LY delivered yet another strong EBITDA beat, ahead of consensus by 16%. Against consensus expectations, FY24 guidance was in line for revenue while ahead on EBITDA. Encouragingly, the company has also laid out a bullish EPS target of more than ¥20 for FY25 (vs. ¥18.7 previously) which reflects the company’s focus on efficiency and profitability, and would be positive if the company can achieve it.
- Chris Hoare
Asia Telco Tour Feedback, Improving growth, ROCE and shareholder remun...
We ran our Asia Telco tour last week. This time we met 12 companies in 3 countries (Korea, Japan, Thailand). Telco share prices in all 3 of these countries have been pretty strong recently as telcos continue to benefit from generally positive themes: growth, return on capital and shareholder remuneration are all typically improving.
- Chris Hoare
Japanese Telcos Q3 FY23 review: Gearing up for a strong Q4
Service revenue trend was softer on slower non-mobile this quarter. Collectively, mobile revenue trend (Consumer + Enterprise) maintained its second consecutive of growth and operators are implying a strong Q4. For instance, Softbank is expecting Consumer MSR to rebound this year (at flat YTD); NTT implying a strong Q4 EBIT on cost reductions and streamlining of non-core assets like Real Estate.
- Chris Hoare
Japanese Telcos What if Japan introduces Spectrum Auctions? Could it ...
Wireless spectrum is one of the most valuable commodities in the telecoms market. Japanese telcos have previously been issued spectrum for free. But what if it starts to be auctioned? In this note, we use our new proprietary SpectrumHub Global Database to calculate the likely cost of mmWave spectrum in Japan. We also look at the total value of all spectrum held by the incumbents, to address the implications if Japan were to move to auction for all spectrum.
- Chris Hoare
Softbank Corp (Buy, TP: ¥2,500, +29%) Q3 23 Quick Take: Guidance upgra...
Softbank Corp delivered a good set of numbers today, with mobile revenue inflecting to positive territory.
- Chris Hoare
LY Corp (Buy, TP: ¥585, +25%) Q3 FY23 Quick Take: Strong EBITDA beat;...
LY delivered a strong EBITDA beat today, ahead consensus by 9% and upgraded EBITDA guidance for the full year, from +10% to +17%. We observed strong momentum in Commerce and Strategic. Beginning from this quarter onwards, the company had reallocated its costs, mostly to its Media and Commerce business and a smaller proportion to Strategic., thus retroactive revisions were made.
- Pelham Smithers
PSA Market Regulations: TSE Prime Market Directive
Pelham Smithers discusses issues that a rise for Japanese corporates with the TSE upping the ante on corporate behaviour and disclosure as Prime and Standard markets bifurcate.
- Chris Hoare
Japanese Telcos & Internet What to expect in 2024: ARPU bouncing back
2023 was a good year for the Japanese incumbents; and we expect 2024 to be more of the same, with ARPU recovering relatively strongly and continued growth in Enterprise and “Beyond Mobile”.
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