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.

Event-Driven

<ul>
<li>AGC, the Japanese manufacturer of glass, electronics, chemicals and ceramics announced on Tuesday (17th March) that it has launched a voluntary tender offer to buy all of the ordinary shares of Molecular Medicine S.p.A. (Molmed).</li>
<li>Molmed is a clinical stage biotechnology company engaged in the research and development of gene and cell therapies and also offers GMP services for the development and manufacturing of gene &amp; cell therapies for third parties and/or in partnership at its authorized facilities.</li>
<li>AGC has offered to buy Molmed’s shares at EUR0.518 per share which values the offer at EUR240m. Molmed’s shares closed at EUR0.26 per share at the close of Monday’s trading, and the offer implies a 100% premium on the biotech company’s last closed price.</li>
</ul>


AGC, the Japanese manufacturer of glass, electronics, chemicals and ceramics announced on Tuesday (17th March) that it has launched a voluntary tender offer to buy all of the ordinary shares of Molecular Medicine S.p.A. (Molmed).
Molmed is a clinical stage biotechnology company engaged in the research and development of gene and cell therapies and also offers GMP services for the development and manufacturing of gene &amp; cell therapies for third parties and/or in partnership at its authorized facilities.
AGC has offered to buy Molmed’s shares at EUR0.518 per share which values the offer at EUR240m. Molmed’s shares closed at EUR0.26 per share at the close of Monday’s trading, and the offer implies a 100% premium on the biotech company’s last closed price.


Japan’s AGC Launches Voluntary Tender Offer on Italian Biotech Firm Molmed

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Thematic (Sector/Industry)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/740/original/2020-02-07_03-39-22.png?1581019080" class="editor-image img-responsive" data-smartkarma-image-id="116740"></figure><div class="content-caption">Source • Japan Analytics</div>INTO THE 'RED' - As predicted, our Results Score dipped into negative territory yesterday, declining by 56 basis points to -0.21. Of the 65 large-cap results, only ten companies had positive qoq changes in Results Score, while seventeen saw double-digit declines. <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> did well to limit its quarterly year-on-year changes in Revenue and OP to -3%, and they are forecasting similar declines against TTM numbers for the full year. The Forecast/Revision Score added six basis points driven primarily by <a href="https://www.smartkarma.com/entities/shiseido-co-ltd" target="_blank" data-smartkarma-citation="entities:5718:1" rel="noopener">Shiseido (4911 JP)</a> overly optimistic initial forecast for FY2020. 'Mr Market' meanwhile is content to bid up share prices to close to the recent highs, and 8% below the January 2018 peak, when the Results Score was 7.54. <hr>• SECTOR TIMELINE •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/741/original/2020-02-07_03-45-05.png?1581019946" class="editor-image img-responsive" data-smartkarma-image-id="116741"></figure><div class="content-caption">Source • Japan Analytics</div>SECTOR TIMELINE - The majority of Sectors saw lower Results &amp; Revision Scores yesterday, with Food, Beverages &amp; Tobacco being the exception due to <a href="https://www.smartkarma.com/entities/japan-tobacco-inc" target="_blank" data-smartkarma-citation="entities:13498:1" rel="noopener">Japan Tobacco (2914 JP)</a>'s stable topline performance and better-than-expected 2020 forecast. <a href="https://www.smartkarma.com/entities/mitsubishi-heavy-industries" target="_blank" data-smartkarma-citation="entities:13613:1" rel="noopener">Mitsubishi Heavy Industries (7011 JP)</a> decline into the red at the OP level and full-year downward revision took the Machinery Sector lower, while <a href="https://www.smartkarma.com/entities/seibu-holdings-inc" target="_blank" data-smartkarma-citation="entities:458:1" rel="noopener">Seibu (9024 JP)</a> was the negative driver for Multi-Industry. <a href="https://www.smartkarma.com/entities/terumo-corp" target="_blank" data-smartkarma-citation="entities:6708:1" rel="noopener">Terumo (4543 JP)</a> and <a href="https://www.smartkarma.com/entities/olympus-corp" target="_blank" data-smartkarma-citation="entities:356:1" rel="noopener">Olympus (7733 JP)</a> fuelled the decline in Healthcare and <a href="https://www.smartkarma.com/entities/fujifilm-holdings-corp" target="_blank" data-smartkarma-citation="entities:16353:1" rel="noopener">Fujifilm (4901 JP)</a> did the same for Technology Hardware.

Source • Japan AnalyticsINTO THE 'RED' - As predicted, our Results Score dipped into negative territory yesterday, declining by 56 basis points to -0.21. Of the 65 large-cap results, only ten companies had positive qoq changes in Results Score, while seventeen saw double-digit declines. Toyota Motor (7203 JP) did well to limit its quarterly year-on-year changes in Revenue and OP to -3%, and they are forecasting similar declines against TTM numbers for the full year. The Forecast/Revision Score added six basis points driven primarily by Shiseido (4911 JP) overly optimistic initial forecast for FY2020. 'Mr Market' meanwhile is content to bid up share prices to close to the recent highs, and 8% below the January 2018 peak, when the Results Score was 7.54. • SECTOR TIMELINE •Source • Japan AnalyticsSECTOR TIMELINE - The majority of Sectors saw lower Results &amp; Revision Scores yesterday, with Food, Beverages &amp; Tobacco being the exception due to Japan Tobacco (2914 JP)'s stable topline performance and better-than-expected 2020 forecast. Mitsubishi Heavy Industries (7011 JP) decline into the red at the OP level and full-year downward revision took the Machinery Sector lower, while Seibu (9024 JP) was the negative driver for Multi-Industry. Terumo (4543 JP) and Olympus (7733 JP) fuelled the decline in Healthcare and Fujifilm (4901 JP) did the same for Technology Hardware. 

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 6th February ▲ 2914 4911 6406 ▼ 9024 4901 7951

<ul>
<li>It was reported by Nikkei and several other news media outlets that Fujifilm will be terminating the brand licensing and sales cooperation partnership with Xerox at the end of March 2021.</li>
<li>As a result of the withdrawal from Fuji Xerox partnership, Fujifilm will not be able to sell Xerox branded products in the Asia Pacific region. At the same time, Fujifilm will not have to pay about JPY10bn in license fees it pays annually to Xerox.</li>
<li>Fujifilm later announced that its board of directors have resolved to change the trade name of its subsidiary, Fuji Xerox to FUJIFILM Business Innovation Corp. after the Technology Agreement between Xerox and Fuji expires on March 31, 2021.</li>
<li>As per Fujifilm’s announcement, the company aims to expand into a wide range of business areas going forward such as cloud, AI, artificial intelligence and IoT.</li>
<li>At the same time, the company will work swiftly to strengthen its document and adjacent businesses. The company will continue to engage in the sale of Xerox’s photocopiers and other products even after the expiry of the current agreement.</li>
<li>Fujifilm could enter the US and the European markets with its own brand, while Xerox can engage in selling its own products directly in Asia Pacific thereby the two companies will compete with each other for market share.</li>
</ul>


It was reported by Nikkei and several other news media outlets that Fujifilm will be terminating the brand licensing and sales cooperation partnership with Xerox at the end of March 2021.
As a result of the withdrawal from Fuji Xerox partnership, Fujifilm will not be able to sell Xerox branded products in the Asia Pacific region. At the same time, Fujifilm will not have to pay about JPY10bn in license fees it pays annually to Xerox.
Fujifilm later announced that its board of directors have resolved to change the trade name of its subsidiary, Fuji Xerox to FUJIFILM Business Innovation Corp. after the Technology Agreement between Xerox and Fuji expires on March 31, 2021.
As per Fujifilm’s announcement, the company aims to expand into a wide range of business areas going forward such as cloud, AI, artificial intelligence and IoT.
At the same time, the company will work swiftly to strengthen its document and adjacent businesses. The company will continue to engage in the sale of Xerox’s photocopiers and other products even after the expiry of the current agreement.
Fujifilm could enter the US and the European markets with its own brand, while Xerox can engage in selling its own products directly in Asia Pacific thereby the two companies will compete with each other for market share.


Fujifilm to End Sales Partnership with Xerox in 2021

Equity Bottom-Up

We have been covering Hoya for close to a year and the company’s share price has rallied 71% over the last 12-months to JPY10,450 a share from JPY6,101 a share. While Hoya operates a solid business with good long-term growth potential, we believe, the company is presented with a strong opportunity to grow its earnings over the next 2-3 years driven by its Electronics business, EUV blanks and glass substrates in particular.Hoya is the largest supplier of mask blanks for EUV lithography which has just entered into mainstream production. In addition, we expect the process node migration to continue to drive demand for EUV mask blanks as further miniaturisation of semiconductor chips is not possible without EUV.Hoya has been the only supplier of glass substrates for HDDs and with growing data center capex and increased demand for large data storage, the HDD makers will switch to glass from aluminium and other materials which are currently being used. We expect this to offer growth in earnings for the segment. On the other hand, we expect Hoya’s Life Care business to remain solid and contribute to earnings.

We have been covering Hoya for close to a year and the company’s share price has rallied 71% over the last 12-months to JPY10,450 a share from JPY6,101 a share. While Hoya operates a solid business with good long-term growth potential, we believe, the company is presented with a strong opportunity to grow its earnings over the next 2-3 years driven by its Electronics business, EUV blanks and glass substrates in particular.Hoya is the largest supplier of mask blanks for EUV lithography which has just entered into mainstream production. In addition, we expect the process node migration to continue to drive demand for EUV mask blanks as further miniaturisation of semiconductor chips is not possible without EUV.Hoya has been the only supplier of glass substrates for HDDs and with growing data center capex and increased demand for large data storage, the HDD makers will switch to glass from aluminium and other materials which are currently being used. We expect this to offer growth in earnings for the segment. On the other hand, we expect Hoya’s Life Care business to remain solid and contribute to earnings.

2020 High Conviction: EUV Mask Blanks, Glass Substrates for HDDs Drive Next Phase of Growth for Hoya

The Nikkei reported yesterday that Fujifilm has decided to buy Hitachi’s diagnostic imaging business in order to build the former’s medical business. The Japanese photocopier and camera manufacturer, Fujifilm has been expanding into healthcare as its legacy photocopy business is stagnating. According to Reuters, the deal will be worth around JPY170bn (US$1.56bn) and Fujifilm itself has confirmed the news and will make a disclosure once the deal is decided. Hitachi’s Diagnostic Imaging business develops MRI systems, CT systems, X-Ray and other components. Fujifilm, on the other hand operates in the same diagnostic imaging market with a different set of products such as endoscopes, ultrasound systems and X-Ray imaging. We believe the acquisition will allow the two businesses to operate in the diagnostic imaging market with a large portfolio of products and at the same time share R&amp;D capabilities, marketing and distribution resulting in synergies.We discuss the details below.

The Nikkei reported yesterday that Fujifilm has decided to buy Hitachi’s diagnostic imaging business in order to build the former’s medical business. The Japanese photocopier and camera manufacturer, Fujifilm has been expanding into healthcare as its legacy photocopy business is stagnating. According to Reuters, the deal will be worth around JPY170bn (US$1.56bn) and Fujifilm itself has confirmed the news and will make a disclosure once the deal is decided. Hitachi’s Diagnostic Imaging business develops MRI systems, CT systems, X-Ray and other components. Fujifilm, on the other hand operates in the same diagnostic imaging market with a different set of products such as endoscopes, ultrasound systems and X-Ray imaging. We believe the acquisition will allow the two businesses to operate in the diagnostic imaging market with a large portfolio of products and at the same time share R&amp;D capabilities, marketing and distribution resulting in synergies.We discuss the details below.

Fujifilm to Buy Hitachi’s Diagnostic Imaging Business

Japan

FUJIFILM Holdings Corporation develops, sells and services Imaging, Information, and Document Solutions.  Its products include color films, digital cameras, photofinishing products and equipment.  The Group also manufactures medical and graphic art use equipment and materials, FPD materials, and optical devices, and provides services on office copy machines, printers, and related equipment.

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FUJIFILM Holdings (4901 JP)

Japan’s AGC Launches Voluntary Tender Offer on Italian Biotech Firm Molmed

AGC, the Japanese manufacturer of glass, electronics, chemicals and ceramics announced on Tuesday (17th March) that it has launched a voluntary...

Shifara Samsudeen, FCMA, CGMA

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 6th February ▲ 2914 4911 6406 ▼ 9024 4901 7951

INTO THE 'RED' - As predicted, our Results Score dipped into negative territory yesterday, declining by 56 basis points to -0.21. Of the 65...

Campbell Gunn

Fujifilm to End Sales Partnership with Xerox in 2021

It was reported by Nikkei and several other news media outlets that Fujifilm will be terminating the brand licensing and sales cooperation...

Shifara Samsudeen, FCMA, CGMA

2020 High Conviction: EUV Mask Blanks, Glass Substrates for HDDs Drive Next Phase of Growth for Hoya

We have been covering Hoya for close to a year and the company’s share price has rallied 71% over the last 12-months to JPY10,450 a share from...

Shifara Samsudeen, FCMA, CGMA

Fujifilm to Buy Hitachi’s Diagnostic Imaging Business

The Nikkei reported yesterday that Fujifilm has decided to buy Hitachi’s diagnostic imaging business in order to build the former’s medical...

Shifara Samsudeen, FCMA, CGMA

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