Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Equity Bottom-Up

<ul>
<li>Canon was late to market with its 193-nm immersion litho tool developed in 2007 causing it to cede the leading-edge litho race to ASML and, to a lesser extent, Nikon</li>
<li>The company has been working on NanoImprint Lithography as an alternative to EUV since 2004 &amp; was supposedly fast tracked by the acquisition of Molecular Imprints in 2014</li>
<li>Commercial launch was originally slated for 2015. We're still waiting. Why?</li>
</ul>


Canon was late to market with its 193-nm immersion litho tool developed in 2007 causing it to cede the leading-edge litho race to ASML and, to a lesser extent, Nikon
The company has been working on NanoImprint Lithography as an alternative to EUV since 2004 &amp; was supposedly fast tracked by the acquisition of Molecular Imprints in 2014
Commercial launch was originally slated for 2015. We're still waiting. Why?


Canon NanoImprint. EUV Slayer or Damp Squib?

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>10 days ago <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a> announced its 18th ¥50bn buyback in 15yrs. They have a pattern, both in execution and outperformance. </li>
<li>Historically, they are reasonably aggressive. It may pay to observe market data to see when they are done. It may also pay to look at peer outperformance cycles. </li>
<li>Here I look at both - buyback cycle performance and cycle outperformance. Good so far, and now I see a tactical trade but it's not overwhelming.</li>
</ul>


10 days ago Canon Inc (7751 JP) announced its 18th ¥50bn buyback in 15yrs. They have a pattern, both in execution and outperformance. 
Historically, they are reasonably aggressive. It may pay to observe market data to see when they are done. It may also pay to look at peer outperformance cycles. 
Here I look at both - buyback cycle performance and cycle outperformance. Good so far, and now I see a tactical trade but it's not overwhelming.


Assessing the Canon Buyback and Follow-On Performance

<ul>
<li>FY'23 growth forecast increased despite push outs in the EUV order book and lower than expected IBB revenues.</li>
<li>Broad-Based recovery is now looking more like a H1'24 scenario with lingering uncertainty as to how it quickly it will unfold thereafter</li>
<li>System sales to China increased from 8% of revenues in Q1'23 to 24% in Q2'23. Non-China DUV order cancellations are being snapped up by China at an unprecedented rate. </li>
</ul>


FY'23 growth forecast increased despite push outs in the EUV order book and lower than expected IBB revenues.
Broad-Based recovery is now looking more like a H1'24 scenario with lingering uncertainty as to how it quickly it will unfold thereafter
System sales to China increased from 8% of revenues in Q1'23 to 24% in Q2'23. Non-China DUV order cancellations are being snapped up by China at an unprecedented rate. 


<ul>
<li>Last Friday, the FFW changes for the TOPIX July Free Float Weight Review were announced. There have also been other recent announcements creating flows on 30 July.</li>
<li>Some of these other recent announcements represent a possible change in <em>ad hoc</em> methodology.</li>
<li>Total Flow for 30 July is ~$3.3bn a side driven by selling flows (3/4 of the buy flows are reverse funding). $2.1bn of selling is &gt; 3 days ADV.</li>
</ul>


Last Friday, the FFW changes for the TOPIX July Free Float Weight Review were announced. There have also been other recent announcements creating flows on 30 July.
Some of these other recent announcements represent a possible change in ad hoc methodology.
Total Flow for 30 July is ~$3.3bn a side driven by selling flows (3/4 of the buy flows are reverse funding). $2.1bn of selling is &gt; 3 days ADV.


July TOPIX FFW Rebal - Bigger Than Expected

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a>'s unit SBI Regional Bank Holdings KK (SBI 地銀ホールディングス株式会社) today <a href="https://www.sbigroup.co.jp/english/news/pdf/2022/1011_a_en.pdf" target="_blank" rel="noopener">announced</a> it had received FSA authorisation to turn the company into a Bank Holding Company.  </li>
<li>There are some technicalities involved. SBI announced it would buy 2.5mm shares of Shinsei on-market to get to 50.05% by end-March 2023. This will disappoint some, but...</li>
<li>I expect investors should continue to look at the big picture. Technicalities are technicalities. Strategy is strategy. The big picture is unchanged and there isn't <em>that</em> much room to manoeuvre. </li>
</ul>



SBI Holdings (8473 JP)'s unit SBI Regional Bank Holdings KK (SBI 地銀ホールディングス株式会社) today announced it had received FSA authorisation to turn the company into a Bank Holding Company.  
There are some technicalities involved. SBI announced it would buy 2.5mm shares of Shinsei on-market to get to 50.05% by end-March 2023. This will disappoint some, but...
I expect investors should continue to look at the big picture. Technicalities are technicalities. Strategy is strategy. The big picture is unchanged and there isn't that much room to manoeuvre. 


SBI Obtains Approval - Has Plan To Buy 0.965% of Shinsei - It Isn't Strategic, It's Technical

Japan

Canon Inc. is a professional and consumer imaging solutions company and patent-holder of digital imaging technologies. The Company's products include networked multifunction devices, digital and analog copiers, computer peripherals, facsimile machines, image filing systems, camcorders, cameras and lenses, semiconductor, and broadcast and medical equipment.

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Canon Inc (7751 JP)

Canon NanoImprint. EUV Slayer or Damp Squib?

Canon was late to market with its 193-nm immersion litho tool in 2007 and switched horses to back NanoImprint Litho instead.Commercial launch was...

William Keating

Assessing the Canon Buyback and Follow-On Performance

The Canon buyback started 7 trading days ago and is likely nearly done. EPS forecasts are on the up vs peers. Stock is outperforming. There is a...

Travis Lundy

ASML. Sanctions? Moi?

FY'23 growth forecast increased despite push outs in the EUV order book and lower IBB revenues. Semi recovery now a H1'24 scenario with uncertainty...

William Keating

July TOPIX FFW Rebal - Bigger Than Expected

The TOPIX July FFW Review is more interesting than it would appear at first glance. There are some trades to do too. Watch Rakuten, Nippon Paint,...

Travis Lundy

SBI Obtains Approval - Has Plan To Buy 0.965% of Shinsei - It Isn't Strategic, It's Technical

SBI today announced it had received Bank Holding Company approval. To do that, it needs 50+% of votes in Shinsei. Some will misunderstand the news....

Travis Lundy

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