reports
- Pelham Smithers
PSA Strategy: Japan Stock Market Quarterly for 2025 Q4
For almost three years the Nikkei 225 has been tracking its performance from the 2003~5 bull market, albeit at levels some 3.3x higher In this report, Pelham Smithers discusses the similarities and asks three key questions: (1) Can we continue to track 2005 through the rest of the year; (2) Whatever happens in Q4, should we fear or be hopeful for 2026? And (3) Who are the upcoming winners and losers.
4689 Z HOLDINGS CORPORATION
7751 CANON INC.
6952 CASIO COMPUTER CO. LTD.
4519 CHUGAI PHARMACEUTICAL CO. LTD.
7762 CITIZEN WATCH CO LTD.
4751 CYBERAGENT INC.
4755 RAKUTEN INC.
9433 KDDI CORPORATION
5803 FUJIKURA LTD
4902 KONICA MINOLTA INC.
6752 PANASONIC CORPORATION
7752 RICOH COMPANY LTD.
6869 SYSMEX CORPORATION
5423 TOKYO STEEL MANUFACTURING CO. LTD.
8729 SONY FINANCIAL HOLDINGS INC.
7267 HONDA MOTOR CO. LTD.
7202 ISUZU MOTORS LIMITED
9616 KYORITSU MAINTENANCE CO. LTD.
6981 MURATA MANUFACTURING CO. LTD.
6723 RENESAS ELECTRONICS CORPORATION
7974 NINTENDO CO. LTD.
6701 NEC CORP.
6594 NIDEC CORPORATION
7731 NIKON CORP.
2371 KAKAKU.COM INC.
6963 ROHM CO. LTD.
6753 SHARP CORPORATION
6762 TDK CORPORATION
4502 TAKEDA PHARMACEUTICAL CO. LTD.
6857 ADVANTEST CORP.
6976 TAIYO YUDEN CO. LTD.
4186 TOKYO OHKA KOGYO CO. LTD.
8035 TOKYO ELECTRON LTD.
7261 MAZDA MOTOR CORP.
3774 INTERNET INITIATIVE JAPAN
3697 SHIFT
6857 JP ADVANEST
6460 JP SEGA SAMMY
4385 MERCARI INC.
36350 KOEI TECMO
45870 PEPTIDREAM INC
3491 JT GA TECHNOLOGIES
3630 JT DENSAN SYSTEM CO LTD (3630 JT)
4194 VISIONAL
4483 JMDC
WOLF WOLFSPEED INC
TSE: 2980 SRE HOLDINGS CORP
AST VISIONAL INC
5032 JT ASTREE CIE ASSURANCE & REASSURANCE
5253 JT ANYCOLOR INC
9616 JT COVER CORPORATION (5253 JT)
8473 JT KYORITSU MAINTENANCE (9616 JT)
215A SBI HOLDINGS [STRATEGIC BUSINESS INNOVATOR GROUP] (8473 JT)
285A JT TIMEE INC
KIOXIA CORPORATION (285A JT)
- Lindsay Whipp
PSA IT Services: Japanese Banking Industry’s Investment in DX Deepens
The most recent quarterly earnings for the system integrators highlighted the sustained increase in spending by Japanese financial institutions over recent quarters, as they seek to improve products and services amid a shift in interest rates and the introduction of tax-exempt investment accounts, and as interest in digital currencies grows. Analyst Lindsay Whipp reviews some of the DX spending undertaken by Japan’s banking industry and highlights beneficiaries'.
4307 NOMURA RESEARCH INSTITUTE LTD.
8306 MITSUBISHI UFJ FINANCIAL GROUP INC.
8316 SUMITOMO MITSUI FINANCIAL GROUP INC.
9432 NIPPON TELEGRAPH AND TELEPHONE CORPORATION
3774 INTERNET INITIATIVE JAPAN
7182 JAPAN POST BANK CO. LTD.
3994 MONEY FORWARD
3626 JT TIS INC
8473 JT NTT LTD
9682 JT SBI HOLDINGS [STRATEGIC BUSINESS INNOVATOR GROUP] (8473 JT)
DTS CORP (9682 JT)
- Chris Hoare
Japanese Telcos – Q1 FY25 review: Steady start, all eyes on Mobile pri...
Revenue trends were steady as the softer mobile growth was offset by improvement in non-mobile. Softbank remained the outperformer, but this has already been baked in as expectations for Group revenue are sitting ahead of guidance by 3%.
- Chris Hoare
NTT (Buy, TP: ¥215, +40%) Q1 FY25 Quick Take: Soft start; awaiting fo...
NTT printed a rather soft set of Q1 results as Mobile was weaker and Global Solutions was impacted by FX weakness in its Overseas arm. The recovery in Regional Communications offered some encouragement and is likely to remain so as the firm transits from Copper to Fibre over the long run.
- Chris Hoare
KDDI (Buy, ¥3,150, +24%) Q1 FY25 Quick Take: Modest start but managem...
Q1 results were a touch softer than expected as trends in Business moderated. Tone remains encouraging for mobile to further accelerate in the second half as the impact of new mobile plans and price increase begin to flow through. Guidance remains unchanged. We continue to see good upside surprise in Mobile and stay Buyers with a ¥3,150 price target.
- Chris Hoare
Japanese Telcos Q4 FY24 review: Inflationary telco market
Japan’s mobile sector accelerated again in Q4 and we think is heading to above inflation. With both KDDI and DCM recently announcing price increases the environment is increasingly benign and should be helped by NTT’s recent acquisition of SBI Sumishin Net Bank. Our recent trip to Japan highlighted how positive the environment is; NTT stays our preferred pick, with KDDI closely behind.
- Lindsay Whipp
- Chris Hoare
NTT (Buy, TP: ¥215, +38%) NTT to acquire SBI Sumishin Bank and a mino...
As has been widely rumoured, NTT has offered to acquire up to 66% of SBI Sumishin Bank (7163-JP), in a bid to strengthen its financial services offering. The offer price (¥3,615) represents a 10% premium to yesterday’s price, but actually around 10% below today’s closing price.
- Chris Hoare
Takeaways from Meetings with the Japanese Telcos + Rakuten in Tokyo. D...
We met with all 3 of the incumbent Japanese Telcos & Rakuten in Tokyo last week, as well as visiting Osaka to talk to NTT in more depth about IOWN. Overall, we remain bullish on Japanese telcos operationally and buyers of all three incumbents. NTT remains our top pick followed by KDDI.
- Chris Hoare
KDDI (Buy, ¥3,150, +22%) Q4 24 Quick Take: Good revenue growth; big b...
KDDI reported a better top-line, and generous shareholder remuneration. However, guidance is largely in line and leaves us wondering what happens after the company hits it in March ’26. Within this space, NTT remains our preferred pick on potential upside catalysts (IOWN revenue optionality, NTT Data and Fixed line rebound) while KDDI remains a close second with a ¥3,150 price target.
- Chris Hoare
- Chris Hoare
NTT (Buy, TP: ¥215, +44%) NTT offers to buy out NTT Data – Quick thou...
As rumoured, NTT has offered to buy out the minorities (~42.3%) of NTT Data via a tender offer, at a 34% premium, or ¥4,000 per share. This is a slightly lower premium than we would have expected and implies a transaction value for the minority stake of ¥2.4tn (USD 16.5bn). Quick thoughts below.
- Lindsay Whipp
- Chris Hoare
- Chris Hoare
KDDI (Buy, ¥6,600, +25%) Q3 24 Quick Take: Improving bottom-line; exp...
KDDI reported an improved bottom-line trend, supported by its steady topline and Lawson’s contribution. While mobile ARPU was marginally down in Q3, it was still growing sequentially, and the company anticipates mobile communication ARPU revenue to inflect back to growth in the next quarter on the back of continued up-trading and UQ to AU brand migration.
- Lindsay Whipp
PSA Information Technology / IT Services: NTT Data (9613 JT) – The Dat...
Tags: NTT Corp (9432 JT), Equinix (EQIX US), Iron Mountain (IRM US), Amazon (AMZN US), Microsoft (MSFT US), Google (GOOG US), Digital Realty Trust (DLR US), QTS (owned by Blackstone (BX US)), CyrusOne (owned by KKR (KKR US) and Global Infrastructure Partners (pvt), Cyxtera (owned by Brookfield Infrastructure Partners (BIP US)), Cologix (pvt), Meta (META US), Apple (AAPL US), Oracle (ORCL US), Netflix (NFLX US), Money Forward (3994 JT), Digital Realty Trust (DLR US), DataBridge Group (DBRG US), N...
- Chris Hoare
Japanese Telcos & Internet What to expect in 2025: Mixed
After 3 good years, 2024 was not great for the Japanese incumbents; with KDDI and SoftBank rising modestly and NTT falling, but all underperforming the Nikkei. In our view, risk is rising in Mobile, although we continue to see the sector as fundamentally undervalued. Rakuten performed well in 2024, but this was really to do with balance sheet risk easing on the back of cost cutting/refinancing rather than better traction in Mobile.
- 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.
- Lindsay Whipp
- Chris Hoare
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