Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Asics unveils MTP with focus on financial milestones: 7-10% Sales CAGR to 660 billion yen and Operating profit of 80 billion yen by 2026. </li>
<li>The biggest risk to the MTP looks to be market share goals in the US. However, we think overall sales and margin targets are achievable.</li>
<li>The share price is up 80% YTD and stock is no longer cheap. However, plugging in the MTP assumptions into a DCF reveals further 17% upside</li>
</ul>


Asics unveils MTP with focus on financial milestones: 7-10% Sales CAGR to 660 billion yen and Operating profit of 80 billion yen by 2026. 
The biggest risk to the MTP looks to be market share goals in the US. However, we think overall sales and margin targets are achievable.
The share price is up 80% YTD and stock is no longer cheap. However, plugging in the MTP assumptions into a DCF reveals further 17% upside


Asics (7936) | Stepping Ahead with New MTP

<ul>
<li>ASICS reports solid Q3 results, featuring a 14.5% rise in net sales, 31% rise in operating profit, improved gross margin, and digital growth.</li>
<li>ASICS revises FY23 outlook with increased sales and operating profit. New OP guidance of Y52b is inline with consensus</li>
<li>Market to focus on new Mid-Term Plan (end-Nov). Valuation at 16x forecast EBIT still a discount to average 18x multiple.</li>
</ul>


ASICS reports solid Q3 results, featuring a 14.5% rise in net sales, 31% rise in operating profit, improved gross margin, and digital growth.
ASICS revises FY23 outlook with increased sales and operating profit. New OP guidance of Y52b is inline with consensus
Market to focus on new Mid-Term Plan (end-Nov). Valuation at 16x forecast EBIT still a discount to average 18x multiple.


Thematic (Sector/Industry)

<ul>
<li>OVERSEAS: US stocks +0.6% - its all macro at the moment - higher interest rates, oil price volatility; US 30y mortgage rates now at 7.3%; Nike earnings beat </li>
<li>JAPAN: NKY Futures +0.4% vs cash. Toyota Aug production +4%; EPCOs to lower residential electricity prices; Sony's Game unit gets new interim boss. </li>
<li>JAPAN X: Daikin's concerns about the UK Government backtracking on its climate pledge highlight our concerns over heat pump adoption</li>
</ul>


OVERSEAS: US stocks +0.6% - its all macro at the moment - higher interest rates, oil price volatility; US 30y mortgage rates now at 7.3%; Nike earnings beat 
JAPAN: NKY Futures +0.4% vs cash. Toyota Aug production +4%; EPCOs to lower residential electricity prices; Sony's Game unit gets new interim boss. 
JAPAN X: Daikin's concerns about the UK Government backtracking on its climate pledge highlight our concerns over heat pump adoption


Ohayo Japan: Stocks & SOX Higher; JapanX - Delayed UK Climate Plans Threaten Heat Pump Adoption

<ul>
<li>Asics is due to report on 8th August. We expect another strong quarter and guidance revision</li>
<li>Recent results from Nike bode well for Asics – declining inventories and strong top line performance in China</li>
<li>We believe that higher operating margins will be the key stock driver and see 10% upside to fair value</li>
</ul>


Asics is due to report on 8th August. We expect another strong quarter and guidance revision
Recent results from Nike bode well for Asics – declining inventories and strong top line performance in China
We believe that higher operating margins will be the key stock driver and see 10% upside to fair value


Asics (7936) | Q2 Preview; Guidance Revision

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

US Treasury (10 Yr Generic) / Technical Analysis

<ul>
<li>In our two previous Int'l Compass reports (Aug. 18 &amp; 24) we discussed that we were buyers on the pullback to the major $93 support level on MSCI ACWI (ACWI-US).</li>
<li>$93 on ACWI is 1+ year base support and a level that coincides with the 10-month uptrend. We remain bullish as long as the ACWI-US is above $93.</li>
<li>$93 on ACWI-US is likely the low for this pullback as long as the 10-year Treasury yield and DXY can stay below respective resistance levels (4.3%-4.35% and $103.70-$105.70).</li>
</ul>


In our two previous Int'l Compass reports (Aug. 18 &amp; 24) we discussed that we were buyers on the pullback to the major $93 support level on MSCI ACWI (ACWI-US).
$93 on ACWI is 1+ year base support and a level that coincides with the 10-month uptrend. We remain bullish as long as the ACWI-US is above $93.
$93 on ACWI-US is likely the low for this pullback as long as the 10-year Treasury yield and DXY can stay below respective resistance levels (4.3%-4.35% and $103.70-$105.70).


Further Declines in DXY, Sovereign Yields May Provide More Fuel for a Rally in Global Equities

Japan

ASICS CORPORATION manufactures general sporting goods and equipment.  The Company's products, such as athletic shoes and sportswear, are distributed in the United States, Europe, Australia, and Asia.

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ASICS Corp (7936 JP)

Asics (7936) | Stepping Ahead with New MTP

Asics aims for: 7-10% sales growth and 80 bn yen operating profit by 2026. Market share in the US poses a risk, but overall targets seem...

Mark Chadwick

Asics (7936) | Running the Numbers

ASICS reports strong Q3 results with increased sales and profit, and revises outlook for FY23. Market awaits new Mid-Term Plan.

Mark Chadwick

Ohayo Japan: Stocks & SOX Higher; JapanX - Delayed UK Climate Plans Threaten Heat Pump Adoption

US stocks rise despite concerns over higher interest rates; Nike earnings exceed expectations. In Japan, Toyota's production increases and EPCOs...

Mark Chadwick

Asics (7936) | Q2 Preview; Guidance Revision

Nike reported 1Q23 earnings. Revenue +2% to $12.9b (in line ). Gross margin came in at 44.2% (better than expected 43.7%). EPS +1% to $0.94 (far...

Mark Chadwick

Further Declines in DXY, Sovereign Yields May Provide More Fuel for a Rally in Global Equities

We continue to believe $93 on $ACWI is likely the low for this pullback as long as the 10-year Treasury yield $TNX and $DXY can stay below their...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Asics (7936) | Stepping Ahead with New MTP

​Asics aims for: 7-10% sales growth and 80 bn yen operating profit by 2026. Market share in the US poses a risk, but overall targets seem...

Mark Chadwick

Asics (7936) | Running the Numbers

​ASICS reports strong Q3 results with increased sales and profit, and revises outlook for FY23. Market awaits new Mid-Term Plan.

Mark Chadwick

Ohayo Japan: Stocks & SOX Higher; JapanX - Delayed UK Climate Plans Threaten Heat Pump Adoption

​US stocks rise despite concerns over higher interest rates; Nike earnings exceed expectations. In Japan, Toyota's production increases and EPCOs...

Mark Chadwick

Asics (7936) | Q2 Preview; Guidance Revision

Nike reported 1Q23 earnings. Revenue +2% to $12.9b (in line ). Gross margin came in at 44.2% (better than expected 43.7%). EPS +1% to $0.94 (far...

Mark Chadwick

Further Declines in DXY, Sovereign Yields May Provide More Fuel for a Rally in Global Equities

We continue to believe $93 on $ACWI is likely the low for this pullback as long as the 10-year Treasury yield $TNX and $DXY can stay below their...

Vermilion Research

Asics aims for: 7-10% sales growth and 80 bn yen operating profit by 2026. Market share in the US poses a risk, but overall targets seem...

ASICS reports strong Q3 results with increased sales and profit, and revises outlook for FY23. Market awaits new Mid-Term Plan.

US stocks rise despite concerns over higher interest rates; Nike earnings exceed expectations. In Japan, Toyota's production increases and EPCOs...