reports
- Chris Hoare
Rakuten (Reduce, ¥400, -56%) Rakuten selling a stake in Rakuten Card ...
Rakuten has announced that the company is no longer proceeding with its Fintech reorganisation, preferring instead to enter a deep alliance with (and probably stake sale to) Mizuho. In this brief note, we address what we think Card is likely to be worth in a sale and the implications for Rakuten.
- Pelham Smithers
- 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
Rakuten (Reduce, ¥400, -56%) Rakuten cancels FinTech reorganization; ...
Rakuten has ditched its FinTech reorganization plans since it was announced six months ago. Instead, the Group is now opting to deepen the collaboration between its main arm of the FinTech segment, Rakuten Card, with Mizuho, presumably by selling a stake in Rakuten Card to the latter . While details are not disclosed yet, we share our preliminary view below.
- Chris Hoare
Japanese Telcos - Takeaways from Meetings with the Japanese Telcos + R...
We met with all 3 of the incumbent Japanese Telcos & Rakuten in Tokyo this week. Every time we visit, we are reminded of how much better the telco industry is in Japan vs other DMs, as the MNOs continue to expand their scope of operations beyond traditional telco driving higher returns and growth.
- Pelham Smithers
PSA Interactive Media & Services: Kakaku.com (2371 JT) Scaling Up
Increased purchasing power of their customers is a big positive for online firms because of scaling. Unlike eCommerce companies, which usually only scale at the SG&A level, online services companies like Kakaku.com can scale at both the CoGS and SG&A level if they have the right product. Pelham Smithers thinks that Kakaku.com is proving that it does.
- Chris Hoare
Rakuten (Reduce, TP: ¥400, -57%) Softer net additions to be expected ...
Today, Rakuten Mobile launched a new mobile plan aimed at seniors (65 years old and above). In addition, an update on its mobile subscribers figure reflected a slowdown in net additions, which was behind consensus and our forecasts for Q3. We share our thoughts below.
- Chris Hoare
Global Towers Digital Bridge to acquire JTower. Very brief thoughts a...
Digital Bridge has announced a tender offer for the shares of JTower, the leading Japanese Tower Company. Although the valuation is fairly low, we would not see that as bearish for Global Towers. Thoughts and implications below.
- Chris Hoare
Japanese Telcos Q1 FY24 review: Softbank outperforming
Incumbents led a faster service revenue growth in Q1 driven by non-mobile, with Softbank ahead. Industry mobile growth kept steady but the continued divergence in mobile trend between NTT and peers appears to confirm the benefits of integrated financial services. Softbank was the notable share gainer this quarter (1.1% MSR gain sequentially), having grown its mobile ARPU for the first time since FY19.
- Pelham Smithers
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
9697 CAPCOM CO. LTD.
4751 CYBERAGENT INC.
9684 SQUARE ENIX HOLDINGS CO. LTD.
3656 KLAB INC.
9766 KONAMI HOLDINGS CORP
7974 NINTENDO CO. LTD.
6758 SONY CORPORATION
2432 DENA CO. LTD.
3765 GUNGHO ONLINE ENTERTAINMENT INC.
3659 NEXON CO. LTD.
6460 JP SEGA SAMMY
36350 KOEI TECMO
ONEM 1LIFE HEALTHCARE
- Chris Hoare
Rakuten (Reduce, TP: ¥400, -48%) Q2 24 Quick Take: Mixed, surprising ...
Despite beating on topline sparked by Fintech, overall profitability was still below expectations. While Mobile has seen improvements, pace of improvement remains too slow in our view to justify the share price. ARPU continues to lack traction.
- Pelham Smithers
6146 DISCO CORPORATION
AJIT ABERDEEN JAPAN INVESTMENT TRUST
7735 SCREEN HOLDINGS CO. LTD
9684 SQUARE ENIX HOLDINGS CO. LTD.
4902 KONICA MINOLTA INC.
7752 RICOH COMPANY LTD.
3064 MONOTARO CO. LTD.
6305 HITACHI CONSTRUCTION MACHINERY CO. LTD.
7974 NINTENDO CO. LTD.
7201 NISSAN MOTOR CO. LTD.
6758 SONY CORPORATION
8035 TOKYO ELECTRON LTD.
7203 TOYOTA MOTOR CORP.
ADSB ABU DHABI SHIP BUILDING
8086 ADVANCED WIRELESS SEMICONDUCTOR
6632 JVCKENWOOD
3659 NEXON CO. LTD.
78320 BANDAI NAMCO
- Pelham Smithers
9684 SQUARE ENIX HOLDINGS CO. LTD.
3656 KLAB INC.
3932 AKATSUKI INC.
9766 KONAMI HOLDINGS CORP
6758 SONY CORPORATION
2432 DENA CO. LTD.
3765 GUNGHO ONLINE ENTERTAINMENT INC.
3659 NEXON CO. LTD.
6460 JP SEGA SAMMY
GRVY GRAVITY CO. LTD. ADS
21210 MIXI
651 GREE ELECTRIC APPLIANCES
78320 BANDAI NAMCO
36350 KOEI TECMO
1954.T NIPPON KOEI CO LTD
- Chris Hoare
Japanese Telcos Q4 FY23 review: Diverging mobile
Service revenue trends for the three incumbents were faster as mobile inflected, coupled with improvements in non-mobile. Meanwhile, the sector’s EBITDA grew strongly which was well flagged in Q3. Divergence in mobile trend appears to confirm the benefits of integrated financial services with mobile as NTT and peers diverged further; former extended its decline while peers accelerated to near 3% YoY.
- Pelham Smithers
- 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
Rakuten (Reduce, TP: ¥400, -51%) Q1 24 Quick Take: Mobile still lacki...
Rakuten Mobile continues to lack traction, driving an overall disappointing set of figures. The company continues to guide towards breakeven in Mobile by year end, but has introduced a new way of looking at Mobile profitability, by focusing on losses excluding acquisition costs and including the impact on EC which we think paves the way for dropping this guidance later in the year.
- Chris Hoare
Rakuten (Reduce, TP: ¥400, -47%) Not on track to hit breakeven targets
Rakuten has seen stronger customer growth recently. In this note, we analyse whether Rakuten is on track to hit its target 8-10m customers and ¥2,500-3,000 ARPU by year end, and what this means for Rakuten’s target EBITDA breakeven by Dec 2024.
- Chris Hoare
- 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.
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