Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS:  US Equities rise for the first week in four; Jackson Hole: Powell leaves open possibility of further hikes/ECB's Largarde strikes hawkish tone for EU;  China's Economic Pain to Continue</li>
<li>JAPAN: NKY Futures +0.7% Premium vs Cash; USDJPY 146.4; BOJ's Ueda at Jackson Hole says Japan inflation below target; Kishida's Approval rating improves; Japan to double EV Charging Stations. </li>
<li>JAPAN X: Japan Post Bank's Trillion Yen Boost set to propel the Japan start up ecosystem to new highs - while creating a new revenue stream for the bank.  </li>
</ul>


OVERSEAS:  US Equities rise for the first week in four; Jackson Hole: Powell leaves open possibility of further hikes/ECB's Largarde strikes hawkish tone for EU;  China's Economic Pain to Continue
JAPAN: NKY Futures +0.7% Premium vs Cash; USDJPY 146.4; BOJ's Ueda at Jackson Hole says Japan inflation below target; Kishida's Approval rating improves; Japan to double EV Charging Stations. 
JAPAN X: Japan Post Bank's Trillion Yen Boost set to propel the Japan start up ecosystem to new highs - while creating a new revenue stream for the bank.  


Ohayo Japan|US Equities Gain Post Powell's Speech; JAPAN X: JP Bank's $7bn Boost for Local Startups

<ul>
<li>A sharp reversal for Japanese stocks on Friday ahead of Jackson Hole, after four straight days of gains</li>
<li>Weak PMIs globally point to a cooling of economic activity, but Powell's speech was fixated on inflation</li>
<li>Advantest was slammed 10% on Friday following a reversal in Nvidia shares, which initially spiked on record quarterly earnings. </li>
</ul>


A sharp reversal for Japanese stocks on Friday ahead of Jackson Hole, after four straight days of gains
Weak PMIs globally point to a cooling of economic activity, but Powell's speech was fixated on inflation
Advantest was slammed 10% on Friday following a reversal in Nvidia shares, which initially spiked on record quarterly earnings. 


Japan Weekly | Advantest, Nihon M&A, Sumi Pharm

Equity Bottom-Up

<ul>
<li>Daikin’s air conditioning business continues to benefit from the secular trends of urbanization, climate change, and rising incomes.  </li>
<li>However, the same logic might not apply to heat pumps, which face far more “structural” issues, warranting a lower valuation.</li>
<li>Overall, we believe that Daikin deserves to trade at its historical multiple of 15x EV/EBIT and see 20% downside from here.</li>
</ul>


Daikin’s air conditioning business continues to benefit from the secular trends of urbanization, climate change, and rising incomes.  
However, the same logic might not apply to heat pumps, which face far more “structural” issues, warranting a lower valuation.
Overall, we believe that Daikin deserves to trade at its historical multiple of 15x EV/EBIT and see 20% downside from here.


<ul>
<li>OVERSEAS.  S&amp;P500 Up again, closing +0.4% ahead of Fed and a slew of earnings; Energy, Fincl lead on higher crude px,  Higher UST ylds; Hopes fade for big China stimulus</li>
<li>JAPAN. NKY Fut +0.1% vs Cash; USDJPY 141.4; Hunt for real yields as JP retail bets on high ylding currencies; BOJ may  lift inflation view; TSE ramps up pressure</li>
<li>NUGGET. Tokyo Steel (5423) - First Japan Beneficiary of the Shift to Low Carbon Steel.</li>
</ul>


OVERSEAS.  S&amp;P500 Up again, closing +0.4% ahead of Fed and a slew of earnings; Energy, Fincl lead on higher crude px,  Higher UST ylds; Hopes fade for big China stimulus
JAPAN. NKY Fut +0.1% vs Cash; USDJPY 141.4; Hunt for real yields as JP retail bets on high ylding currencies; BOJ may  lift inflation view; TSE ramps up pressure
NUGGET. Tokyo Steel (5423) - First Japan Beneficiary of the Shift to Low Carbon Steel.


Ohayo Japan|SPX Up Again...On Peak Rates?; NUGGET: Tokyo Steel(5423) - Green Demand Steel a Reality!

<ul>
<li>OVERSEAS. SPX new 52W highs on Bank earnings, AI (thx to MSFT), and Resilient Retail print; MSFT prices Copilot at high end; US bank CEOs showing optimism. </li>
<li>JAPAN. NKY Futures +0.8% vs Cash; USDJPY 138.8; Look for continued follow through in Japan equity bid; Bank bid thematic gaining more traction on BOJ tweak view;   Kishida cabinet reshuffle?</li>
<li>NUGGET. Isuzu(7202) - Big EV Spending but Still looks Cheap at 1x PBR. A 15% FY3/26 ROE as per mid term plan makes this look interesting for LT investors here.</li>
</ul>


OVERSEAS. SPX new 52W highs on Bank earnings, AI (thx to MSFT), and Resilient Retail print; MSFT prices Copilot at high end; US bank CEOs showing optimism. 
JAPAN. NKY Futures +0.8% vs Cash; USDJPY 138.8; Look for continued follow through in Japan equity bid; Bank bid thematic gaining more traction on BOJ tweak view;   Kishida cabinet reshuffle?
NUGGET. Isuzu(7202) - Big EV Spending but Still looks Cheap at 1x PBR. A 15% FY3/26 ROE as per mid term plan makes this look interesting for LT investors here.


Ohayo Japan | Bullish Banks, Ai , US Consumer; NUGGET: Isuzu(7202) - EV Outlook Better for Trucks

Japan

DAIKIN INDUSTRIES, LTD. manufactures air conditioning equipment for household and commercial use.  The Company also produces fluorine chemical products such as fluorinated hydrocarbon gas and shells and warheads for defense industry.

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Daikin Industries (6367 JP)

Ohayo Japan|US Equities Gain Post Powell's Speech; JAPAN X: JP Bank's $7bn Boost for Local Startups

US Market post first gain in 4 weeks; Fed/ECB heads strike hawkish tone at Jackson Hole; NKY Futures +0.7% Premium vs Cash; USDJPY 146.4; BOJ's...

Mark Chadwick

Japan Weekly | Advantest, Nihon M&A, Sumi Pharm

Japan this week: Topix +1.3% at 2,266. Nikkei +0.2% at 31,624, USD/JPY +0.8% at 146.4. The notable loser this week was Advantest, following...

Mark Chadwick

Daikin (6367) | Cooling on Heat Pumps

We are not convinced that heat pumps will command a valuation multiple in line with the more secular air conditioning market. We see 20% downside...

Mark Chadwick

Ohayo Japan|SPX Up Again...On Peak Rates?; NUGGET: Tokyo Steel(5423) - Green Demand Steel a Reality!

SPX up again head of Fed; Earnings. NKY Fut +0.1% vs Cash; USDJPY 141.4; Hunt for real yields as JP retail bets on high ylding currencies; BOJ may ...

Mark Chadwick

Ohayo Japan | Bullish Banks, Ai , US Consumer; NUGGET: Isuzu(7202) - EV Outlook Better for Trucks

US equities hit new highs on bank and AI optimism; NKY Futures +0.8% vs Cash; USDJPY 138.8; Bank bid thematic gaining more traction on BOJ tweak...

Mark Chadwick

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