Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS. Beta Roars back as SPX regains 4100 support; All SPX sector positive(ex-Energy); CPI in focus as US 2Yr Yields still at 4.5%; Fed Pause or Acceleration-is the question</li>
<li>JAPAN. NKY Futs +1.0% vs Cash; Yen Weakens to 132.45 vs US;  JGB at 2% next year ? So says Koll; Citizen Watch shakes things up with Massive Buyback</li>
<li>DAILY NUGGET.  Buybacks been been certainly improving in Japan. But this action from Citizen Watch takes it to another level.</li>
</ul>


OVERSEAS. Beta Roars back as SPX regains 4100 support; All SPX sector positive(ex-Energy); CPI in focus as US 2Yr Yields still at 4.5%; Fed Pause or Acceleration-is the question
JAPAN. NKY Futs +1.0% vs Cash; Yen Weakens to 132.45 vs US;  JGB at 2% next year ? So says Koll; Citizen Watch shakes things up with Massive Buyback
DAILY NUGGET.  Buybacks been been certainly improving in Japan. But this action from Citizen Watch takes it to another level.


Good Morning Japan |Beta BACK-Ahead of CPI; Citizen Watch LEADS=>Massive Buyback; Toyota EV Shift?

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> reported 3QFY03/2023 results today. Revenue increased 18% YoY to JPY880.1bn (vs consensus JPY862.0bn) while operating profit for the quarter decreased 12.4% YoY to JPY96.8bn (consensus JPY107.2bn).</li>
<li>Though HR Tech top line grew 24.2% YoY, it declined sequentially while adjusted EBITDA margin of the segment also declined during the quarter.</li>
<li>Recruit’s share price has fallen 24% over the last 12-months and with further weakening of labour markets, there is more room for shares to fall.</li>
</ul>



Recruit Holdings (6098 JP) reported 3QFY03/2023 results today. Revenue increased 18% YoY to JPY880.1bn (vs consensus JPY862.0bn) while operating profit for the quarter decreased 12.4% YoY to JPY96.8bn (consensus JPY107.2bn).
Though HR Tech top line grew 24.2% YoY, it declined sequentially while adjusted EBITDA margin of the segment also declined during the quarter.
Recruit’s share price has fallen 24% over the last 12-months and with further weakening of labour markets, there is more room for shares to fall.


Recruit: HRTech Margins Falling Back to Pre-Covid

<ul>
<li>Recruit's Q3 results are unlikely to move the market. Full year guidance slightly above consensus estimates</li>
<li>Much of the bad news on the labour market and interest rates is now discounted in current valuations</li>
<li>We remain bullish. At 23x PE the stock is trading at a deep discount to its historical 30x</li>
</ul>


Recruit's Q3 results are unlikely to move the market. Full year guidance slightly above consensus estimates
Much of the bad news on the labour market and interest rates is now discounted in current valuations
We remain bullish. At 23x PE the stock is trading at a deep discount to its historical 30x


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>A little over two weeks ago, western media outlets <strong><a href="https://www.ft.com/content/ac43e9dd-1e83-47c7-9401-112964465545" target="_blank" rel="noopener">reported</a></strong> "sources familiar with the matter" said Elliott Management had built a "significant" stake in <a href="https://www.smartkarma.com/entities/dai-nippon-printing-co-ltd" target="_blank" data-smartkarma-citation="entities:19388:1" rel="noopener">Dai Nippon Printing (7912 JP)</a>. </li>
<li>DNP has been a "value name" for years. And years. Lots of cash, lots of real estate, and lots of cross-holdings. DNP had a plan to sell crossholdings, slowly.</li>
<li>DNP <em>had</em> planned a March 9 presentation of its new MTMP. Elliott, reportedly with a little less than 5%, wanted faster. A few weeks later, DNP has responded with faster. </li>
</ul>


A little over two weeks ago, western media outlets reported "sources familiar with the matter" said Elliott Management had built a "significant" stake in Dai Nippon Printing (7912 JP). 
DNP has been a "value name" for years. And years. Lots of cash, lots of real estate, and lots of cross-holdings. DNP had a plan to sell crossholdings, slowly.
DNP had planned a March 9 presentation of its new MTMP. Elliott, reportedly with a little less than 5%, wanted faster. A few weeks later, DNP has responded with faster. 


Dai Nippon Printing (7912) - Activism Results Going Forward Are Complicated

<ul>
<li>OVERSEAS. SPX -1.1% as Fed Hawks rhetoric ratches up; All 11 Sectors -ve as Beta Sold; ALPHABET-7.7% AI fails to impress; Disney +8% after-hours with earnings beat/job cuts. </li>
<li>JAPAN.  NKY Futs -0.8% vs Cash; USDJPY 131.41; Japan looking to ease restrictions for China Inbound;  EARNINGS: Pan Pac/SMM Strong vs weak Subaru which -ve production cut; Toyota out today. </li>
<li>DAILY NUGGETS. EPIC fail from Alphabet's "BARD". Aren't these events supposed to  be choreographed ????</li>
</ul>


OVERSEAS. SPX -1.1% as Fed Hawks rhetoric ratches up; All 11 Sectors -ve as Beta Sold; ALPHABET-7.7% AI fails to impress; Disney +8% after-hours with earnings beat/job cuts. 
JAPAN.  NKY Futs -0.8% vs Cash; USDJPY 131.41; Japan looking to ease restrictions for China Inbound;  EARNINGS: Pan Pac/SMM Strong vs weak Subaru which -ve production cut; Toyota out today. 
DAILY NUGGETS. EPIC fail from Alphabet's "BARD". Aren't these events supposed to  be choreographed ????


Good Morning Japan |Hawks Re-Emerge + Epic "BARD" Fail Sinks Google; Pan Pac Beat/Subaru Miss

Japan

Recruit Holdings Co. Ltd. operates information providing services in human resource, housing, bridal, travel, restaurants, beauty, automobiles, and education and more. The company also operate staffing services and advertising business.

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Recruit Holdings (6098 JP)

Good Morning Japan |Beta BACK-Ahead of CPI; Citizen Watch LEADS=>Massive Buyback; Toyota EV Shift?

JGB at 2% next year ? So says Koll; Citizen Watch shakes things up with Massive Buyback. JGB at 2% next year ? So says Koll; Citizen Watch shakes...

Mark Chadwick

Recruit: HRTech Margins Falling Back to Pre-Covid

We expect Recruit's earnings to see the most impact in FY03/2024E due to slowdown in recruitment markets. Consensus expects top line growth of less...

Shifara Samsudeen, FCMA, CGMA

Recruit (6098 JP) | A Soft-Landing?

The current valuation of 23x PE is way below the median level of 30x. Earnings growth may be unexciting this year, but we think the market has...

Mark Chadwick

Dai Nippon Printing (7912) - Activism Results Going Forward Are Complicated

Elliott built a stake in perennial deep-value name Dai Nippon Printing. DNP responded by saying it will take more aggressive capital action. The...

Travis Lundy

Good Morning Japan |Hawks Re-Emerge + Epic "BARD" Fail Sinks Google; Pan Pac Beat/Subaru Miss

Fed Hawks rhetoric ratches up; ALHABET-7.7% AI fails to impress; . Japan looking to ease restrictions for China Inbound; JAPAN EARNINGS: Pan Pac...

Mark Chadwick

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