Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Nikkei Index Team has suggested a methodology change to the Nikkei 225 Average.</li>
<li>It involves capping stocks, creating a method for re-weighting once capped then stocks fall, and they recommend changing to a semi-annual Periodic Review - twice a year rather than once.</li>
<li>More interestingly, they also change the "High Liquidity" definition to be related to traded value not volume, which starts to favour higher-market cap stocks with more shares out.</li>
</ul>


The Nikkei Index Team has suggested a methodology change to the Nikkei 225 Average.
It involves capping stocks, creating a method for re-weighting once capped then stocks fall, and they recommend changing to a semi-annual Periodic Review - twice a year rather than once.
More interestingly, they also change the "High Liquidity" definition to be related to traded value not volume, which starts to favour higher-market cap stocks with more shares out.


Nikkei 225 Methodology Change. Again. This Time Better But Still Not Good Enough

<ul>
<li>About 9 days I ago I wrote <a href="https://www.smartkarma.com/insights/renesas-6723-jp-on-top-of-peer-beating-growth-and-valuation-watch-for-buybacks" target="_blank" data-smartkarma-citation="insights:68571" rel="noopener">Renesas (6723 JP) - On Top of Peer-Beating Growth, and Valuation... Watch for Buybacks</a>. Today with Q1 earnings, they announced a ¥200bn buyback. </li>
<li>What appears to be a quite strong Q1 in automotive in both revenues and margins, and decent incremental margins, sees a stronger Q2 forecast (but less good incremental margins).</li>
<li>The Street is well behind guidance, and a buyback at the high end of potential guidance and coming earlier than expected is all to the good. </li>
</ul>


About 9 days I ago I wrote Renesas (6723 JP) - On Top of Peer-Beating Growth, and Valuation... Watch for Buybacks. Today with Q1 earnings, they announced a ¥200bn buyback. 
What appears to be a quite strong Q1 in automotive in both revenues and margins, and decent incremental margins, sees a stronger Q2 forecast (but less good incremental margins).
The Street is well behind guidance, and a buyback at the high end of potential guidance and coming earlier than expected is all to the good. 


Renesas (6723 JP) - Salutary Q1, Strong Q2 Forecast, and a BIG Buyback

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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>Renesas’ 1Q numbers blew away guidance and consensus as revenue beat by 3.4% and adjusted OP beat by 16%. </li>
<li>Revenue growth was strong for both Auto and Industrial with Industrial margins also improving noticeably vs. last Q. </li>
<li>Renesas also announced a rather large buyback which is effectively a repurchase of the INCJ’s stake.</li>
</ul>


Renesas’ 1Q numbers blew away guidance and consensus as revenue beat by 3.4% and adjusted OP beat by 16%. 
Revenue growth was strong for both Auto and Industrial with Industrial margins also improving noticeably vs. last Q. 
Renesas also announced a rather large buyback which is effectively a repurchase of the INCJ’s stake.


Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Thematic (Sector/Industry)

<ul>
<li>The semiconductor market is now 45% above its normal revenue trend.</li>
<li>This situation is driven mostly by today's COVID-related demand changes.</li>
<li>Eventually the market will return to its normal growth, with revenues dropping by over 30%.</li>
</ul>


The semiconductor market is now 45% above its normal revenue trend.
This situation is driven mostly by today's COVID-related demand changes.
Eventually the market will return to its normal growth, with revenues dropping by over 30%.


Semiconductor Revenues Remain Well Above Trend

<ul>
<li>A bit over a year ago <a href="https://www.smartkarma.com/entities/renesas-electronics-corp" target="_blank" data-smartkarma-citation="entities:15933:1" rel="noopener">Renesas Electronics (6723 JP)</a> announced its transaction to buy <a href="https://www.smartkarma.com/entities/dialog-semiconductor-plc-664a1f83-2a21-4690-a91f-fb971832e7ad" target="_blank" data-smartkarma-citation="entities:21607:1" rel="noopener">Dialog Semiconductor (DLG GR)</a> for €4.8bn (roughly ¥624bn) and the transaction closed end-August 2021.</li>
<li>In September, Renesas announced a "Progress Update" covering various business segments, expectations for supply in the sector, and eventual "shareholder return" policy.</li>
<li>This past week the Nikkei carried an article talking about a possible stock buyback later this year. I explore.</li>
</ul>


A bit over a year ago Renesas Electronics (6723 JP) announced its transaction to buy Dialog Semiconductor (DLG GR) for €4.8bn (roughly ¥624bn) and the transaction closed end-August 2021.
In September, Renesas announced a "Progress Update" covering various business segments, expectations for supply in the sector, and eventual "shareholder return" policy.
This past week the Nikkei carried an article talking about a possible stock buyback later this year. I explore.


Renesas (6723 JP) - On Top of Peer-Beating Growth, and Valuation... Watch for Buybacks

Japan

Renesas Electronics Corporation researches, develops, designs and manufactures electronic components such as semiconductors and integrated devices.

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Renesas Electronics (6723 JP)

Nikkei 225 Methodology Change. Again. This Time Better But Still Not Good Enough

The Nikkei proposes changes to the Nikkei 225 methodology. There is a cap, a cap re-mark, and a move to twice-annual reviews. And there is also a...

Travis Lundy

Renesas (6723 JP) - Salutary Q1, Strong Q2 Forecast, and a BIG Buyback

Renesas Q1 salutary, beating estimates. Q2 guidance stronger on top line, not quite as exciting on margin basis suggesting built-in expectations of...

Travis Lundy

Renesas – Like We Said… Accelerating

Renesas earnings continue to accelerate while a discounted buyback of INCJ shares will help boost EPS even further. This remains a key long in the...

Mio Kato

Semiconductor Revenues Remain Well Above Trend

Semiconductors are 45% above their long-term revenue trend. This is poised to continue for the near term, but a big change will occur further out.

Jim Handy

Renesas (6723 JP) - On Top of Peer-Beating Growth, and Valuation... Watch for Buybacks

Renesas (6723) saw INCJ sell down last year. Absorption has been OK not great. The company has hinted at being able to start buybacks, and recent...

Travis Lundy

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