At the beginning of every year we publish our PSA Perspective, a report intended as a long shelf-life look at the year ahead. This year Pelham Smithers discusses Japan's economy, the outlook for the stock market, and some stand-out themes and developments for the year. These include the digital yen and the demise of live action entertainment in Japan. We also update our noted PSA Focus List of stocks. Table of Contents Overview 3 Background: 4 Japan’s Economic Outlook 5 Ja...
MITSUBISHI HEAVY INDS. (JP), a company active in the Industrial Machinery industry, now shows a lower overall rating. The independent financial analyst theScreener just confirmed the fundamental rating of 4 stars out of 4, as well as the stock market behaviour of the title as moderately risky. However, environmental deterioration penalises the general evaluation, which is downgraded to Neutral. As of the analysis date January 21, 2022, the closing price was JPY 3,051.00 and its expected value wa...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
Pelham Smithers presents his strategy for Q3 2021 and the changes to PSA's stock Focus List Table of Contents Overview 3 Background 4 Valuations & Value 5 The Case for “Muddle Through” 6 Consumer Spending 7 The Labour Market 7 The Currency and the Carry Trade 8 The BoJ and Policy 9 Japan’s Stuttering Economy 10 Stock Performance and Earnings Expectations 12 Catalysts: Digital Transformation, Semiconductors, Price Hikes ...
Mitsubishi Heavy Industry's, or MHI's, strategy briefing revealed robust profit growth targets in all three divisions, led partly by cutting costs, but we are less optimistic about it. MHI is targeting an operating profit of JPY 350 billion in fiscal 2020 (year ending March 2021), a 59% year-over-year jump over fiscal 2019's JPY 220 billion. Much of the increase comes from a margin improvement. We have given MHI some benefit of the doubt but our revised fiscal 2020 operating profit forecast of J...
Mitsubishi Heavy Industry's, or MHI's, strategy briefing revealed robust profit growth targets in all three divisions, led partly by cutting costs, but we are less optimistic about it. MHI is targeting an operating profit of JPY 350 billion in fiscal 2020 (year ending March 2021), a 59% year-over-year jump over fiscal 2019's JPY 220 billion. Much of the increase comes from a margin improvement. We have given MHI some benefit of the doubt but our revised fiscal 2020 operating profit forecast of J...
Mitsubishi Heavy Industry's, or MHI's, strategy briefing revealed robust profit growth targets in all three divisions, led partly by cutting costs, but we are less optimistic about it. MHI is targeting an operating profit of JPY 350 billion in fiscal 2020 (year ending March 2021), a 59% year-over-year jump over fiscal 2019's JPY 220 billion. Much of the increase comes from a margin improvement. We have given MHI some benefit of the doubt but our revised fiscal 2020 operating profit forecast of J...
Mitsubishi Heavy Industry's, or MHI's, confirmed acquisition of Bombardier's commercial regional jet, or CRJ, business for USD 750 million affirms our prior expectation that the deal would have a relatively minor impact on MHI. CRJ is a mature business and we see little growth, adding only around JPY 3 billion operating profit to our midcycle forecast. The purchase, we think could, however, help add expertise and a distribution and support network to boost MHI's own regional jet program. As a re...
Mitsubishi Heavy Industry's, or MHI's, confirmed acquisition of Bombardier's commercial regional jet, or CRJ, business for USD 750 million affirms our prior expectation that the deal would have a relatively minor impact on MHI. CRJ is a mature business and we see little growth, adding only around JPY 3 billion operating profit to our midcycle forecast. The purchase, we think could, however, help add expertise and a distribution and support network to boost MHI's own regional jet program. As a re...
Mitsubishi Heavy Industry's, or MHI's, confirmed acquisition of Bombardier's commercial regional jet, or CRJ, business for USD 750 million affirms our prior expectation that the deal would have a relatively minor impact on MHI. CRJ is a mature business and we see little growth, adding only around JPY 3 billion operating profit to our midcycle forecast. The purchase, we think could, however, help add expertise and a distribution and support network to boost MHI's own regional jet program. As a re...
Mitsubishi Heavy Industry's, or MHI's, confirmed acquisition of Bombardier's commercial regional jet, or CRJ, business for USD 750 million affirms our prior expectation that the deal would have a relatively minor impact on MHI. CRJ is a mature business and we see little growth, adding only around JPY 3 billion operating profit to our midcycle forecast. The purchase, we think could, however, help add expertise and a distribution and support network to boost MHI's own regional jet program. As a re...
Global equities nearing potential resistance Helped by support from global central banks and improving trade headlines, critical support levels have held for major global indexes and therefore our outlook remains constructive. At the same time, just because these indexes are not breaking down does not mean they are headed higher. Rather, we believe global equities remain in a state of purgatory and consolidation is likely to continue as several major indexes approach logical resistance... see c...
We're not entirely convinced that Mitsubishi Heavy Industries', or MHI's, acquisition of Bombardier's CRJ business will garner positive economic profit to MHI. Nonetheless, we think the move, which is currently in advanced negotiations, will help save MHI's regional jet business by giving them access to engineering expertise and could ensure that the MRJ gets airborne. It is unlikely that the deal is accretive given the CRJ's ongoing losses but this will depend on the price paid by MHI and if th...
We're not entirely convinced that Mitsubishi Heavy Industries', or MHI's, acquisition of Bombardier's CRJ business will garner positive economic profit to MHI. Nonetheless, we think the move, which is currently in advanced negotiations, will help save MHI's regional jet business by giving them access to engineering expertise and could ensure that the MRJ gets airborne. It is unlikely that the deal is accretive given the CRJ's ongoing losses but this will depend on the price paid by MHI and if th...
Global equities consolidating We remain constructive on global equities as the MSCI ACWI, ACWI ex-U.S., and EAFE indexes consolidate above their respective 200-day moving averages. On the other hand, the MSCI EM index is breaking below its 200-day moving average and is flirting with a breakdown below 56,000 support (local currency). Weakness within EM raises concerns that global equities may also succumb to weakness... see charts below. • Global equities consolidating. We take a look at the...
Mitsubishi Heavy Industries', or MHI’s, working capital and free cash flow improvement appears to be have exceeded expectations but we think this is mainly due to accounting changes and timing factors. The adoption of IFRS has halved inventory with, we suspect, the other half reflected as contract assets. We continue to include this into our inventory line for our cash flow forecast. Also, the company is accounting for assets related to its troubled South African power plant as indemnification...
Mitsubishi Heavy Industries', or MHI’s, working capital and free cash flow improvement appears to be have exceeded expectations but we think this is mainly due to accounting changes and timing factors. The adoption of IFRS has halved inventory with, we suspect, the other half reflected as contract assets. We continue to include this into our inventory line for our cash flow forecast. Also, the company is accounting for assets related to its troubled South African power plant as indemnification...
Mitsubishi Heavy Industries’, or MHI’s, third-quarter performance continues the trend seen in the first half of their fiscal 2018 (year ending March 2019) with core operations’ profit improving but with slipping new orders reflecting a continued challenging business environment. The firm's fiscal 2018 profit guidance is unchanged but has unsurprisingly lowered new orders expectations. Since we had already factored in slow revenue growth averaging 1.8% in our five-year projection, our profi...
Mitsubishi Heavy Industries’, or MHI’s, third-quarter performance continues the trend seen in the first half of their fiscal 2018 (year ending March 2019) with core operations’ profit improving but with slipping new orders reflecting a continued challenging business environment. The firm's fiscal 2018 profit guidance is unchanged but has unsurprisingly lowered new orders expectations. Since we had already factored in slow revenue growth averaging 1.8% in our five-year projection, our profi...
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