Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS:  SPX -0.6% as Tech leads Tuesday's decline; Inflation concerns continue to weigh; UAW vs Detroit Big 3 discussion continue - strike deadline draws close; Fund managers avoid China. </li>
<li>JAPAN:  NKY Futs -0.6% Disc vs Cash; USDJPY 1471; Cabinet reshuffle day - changes in Defense and Foreign Affairs; GTX engine issue shocks Japanese partners;  Street upgrade Galore !</li>
<li>JAPAN X: Reports are that SoftBank is Explores New York Listing for PayPay Amid Rising Tech Valuations. With ARM (effectively) done and dusted, Softie likely turns to a PayPay listing</li>
</ul>


OVERSEAS:  SPX -0.6% as Tech leads Tuesday's decline; Inflation concerns continue to weigh; UAW vs Detroit Big 3 discussion continue - strike deadline draws close; Fund managers avoid China. 
JAPAN:  NKY Futs -0.6% Disc vs Cash; USDJPY 1471; Cabinet reshuffle day - changes in Defense and Foreign Affairs; GTX engine issue shocks Japanese partners;  Street upgrade Galore !
JAPAN X: Reports are that SoftBank is Explores New York Listing for PayPay Amid Rising Tech Valuations. With ARM (effectively) done and dusted, Softie likely turns to a PayPay listing


Ohayo Japan: Tech Leads US Equity Decline; JAPAN X: Softbank's ARM Done(Almost), PayPay IPO Next?

Equity Bottom-Up

<ul>
<li>IHI's share price has declined 16% on news that Pratt &amp; Whitney would need to ground more planes due to problems with its PW1100 turbofan engines</li>
<li>IHI has a 15% share of the revenue and risk from this program. The new engine was expected to be a major earnings driver over the next several years</li>
<li>We believe that IHI will be forced to revise down OP guidance to a loss. The bigger impact could be on FCF and future capex plans. </li>
</ul>


IHI's share price has declined 16% on news that Pratt &amp; Whitney would need to ground more planes due to problems with its PW1100 turbofan engines
IHI has a 15% share of the revenue and risk from this program. The new engine was expected to be a major earnings driver over the next several years
We believe that IHI will be forced to revise down OP guidance to a loss. The bigger impact could be on FCF and future capex plans. 


<ul>
<li>OVERSEAS: SPX rebounded on Monday with 9/11 Sectors positive; Tesla up 10% on upgrade from Morgan Stanley; Tech strong ahead of Apple's Event - expectations high; China stablilizing. </li>
<li>JAPAN: NKY Futs -0.1% vs Cash; USDJPY 146.6; JP yields rise; yen strengthens and Banks Rally as Ueda hints at normalization; This time is different:  WSJ on Japan </li>
<li>JAPAN X: Japan Equities: Is This Rally Different? We generally worry when the FT, WSJ jump on the Japan bandwagon - generally the top. However, the hard data is supportive..</li>
</ul>


OVERSEAS: SPX rebounded on Monday with 9/11 Sectors positive; Tesla up 10% on upgrade from Morgan Stanley; Tech strong ahead of Apple's Event - expectations high; China stablilizing. 
JAPAN: NKY Futs -0.1% vs Cash; USDJPY 146.6; JP yields rise; yen strengthens and Banks Rally as Ueda hints at normalization; This time is different:  WSJ on Japan 
JAPAN X: Japan Equities: Is This Rally Different? We generally worry when the FT, WSJ jump on the Japan bandwagon - generally the top. However, the hard data is supportive..


Ohayo Japan:  SPX Rebounds - Tesla Leads; JAPAN X: Japan Equities: Is This Rally Different?

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>Japan Industrial Partners (JIP) will launch the <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a> tender offer of JPY4,620 per share from 8 August to 20 September.</li>
<li>The Board has reaffirmed its recommendation to accept the offer. JIP’s inability to raise its bid is used as an excuse to ignore the material peer rerating and unattractive terms.</li>
<li>The 1Q results undermine the Board’s view of an overstated DCF and show its unwillingness to entertain a potential Kioxia merger as a superior alternative, increasing deal risks. </li>
</ul>


Japan Industrial Partners (JIP) will launch the Toshiba Corp (6502 JP) tender offer of JPY4,620 per share from 8 August to 20 September.
The Board has reaffirmed its recommendation to accept the offer. JIP’s inability to raise its bid is used as an excuse to ignore the material peer rerating and unattractive terms.
The 1Q results undermine the Board’s view of an overstated DCF and show its unwillingness to entertain a potential Kioxia merger as a superior alternative, increasing deal risks. 


Toshiba (6502 JP): Tender Offer Launches, 1Q Results Increase Deal Risks

<ul>
<li>OVERSEAS.  SPX500 fell on Friday, and closed -2.3%WoW;  July jobs report showed cooling in the labor market;  Apple -4.8% weighed on market sentiment; Reports that Buffet buying short dated UST.</li>
<li>JAPAN. NKY Futures -0.8% vs Cash; USDJPY 141.8; Strong JP earning season so far- NP +20%YoY; Investors favor Japan&gt;  China;  Oasis's Fischer says still more to be done with Governance.</li>
<li>NUGGET. Honda is ahead of their motorcycle electrification strategy vs Japanese competitors.  With the #1 global share and 2.7 trillion yen in sales, they CANNOT afford to be left behind.</li>
</ul>


OVERSEAS.  SPX500 fell on Friday, and closed -2.3%WoW;  July jobs report showed cooling in the labor market;  Apple -4.8% weighed on market sentiment; Reports that Buffet buying short dated UST.
JAPAN. NKY Futures -0.8% vs Cash; USDJPY 141.8; Strong JP earning season so far- NP +20%YoY; Investors favor Japan&gt;  China;  Oasis's Fischer says still more to be done with Governance.
NUGGET. Honda is ahead of their motorcycle electrification strategy vs Japanese competitors.  With the #1 global share and 2.7 trillion yen in sales, they CANNOT afford to be left behind.


Ohayo Japan| SPX -2.3%WoW; Buffett Buying UST; NUGGET:Motorcycle Electrification - Honda Roars Ahead

Japan

IHI Corporation manufactures heavy machinery. The Company produces aircraft jet engines, rocket propulsion systems, and ships for military and commercial use. Ishikawajima-Harima also constructs petroleum refineries and nuclear power plants.

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IHI Corp (7013 JP)

Ohayo Japan: Tech Leads US Equity Decline; JAPAN X: Softbank's ARM Done(Almost), PayPay IPO Next?

SPX declines lead by Tech; JAPAN: NKY Futs -0.6% Disc vs Cash; USDJPY 1471; Cabinet reshuffle day - changes in Defense and Foreign Affairs; GTX...

Mark Chadwick

IHI (7013) | Brace for a ¥130b Charge

IHI's share price drops 16% as Pratt & Whitney's engine issues impact revenue and earnings projections, leading to potential losses and impact on...

Mark Chadwick

Ohayo Japan: SPX Rebounds - Tesla Leads; JAPAN X: Japan Equities: Is This Rally Different?

SPX rebounds with Tesla leading; NKY Futs -0.1% vs Cash; USDJPY 146.6; JP yields rise; yen strengthens and Banks Rally as Ueda hints at...

Mark Chadwick

Toshiba (6502 JP): Tender Offer Launches, 1Q Results Increase Deal Risks

The 1Q results undermine the Board’s view of an overstated DCF and show its unwillingness to entertain a potential Kioxia merger as a superior...

Arun George

Ohayo Japan| SPX -2.3%WoW; Buffett Buying UST; NUGGET:Motorcycle Electrification - Honda Roars Ahead

JAPAN. NKY Futures -0.8% vs Cash; USDJPY 141.8; Strong JP earning season so far- NP +20%YoY; Global Investors favor Japan over China; Oasis's...

Mark Chadwick

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52-week Range

Market Cap (USDm)

P/E

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Ohayo Japan: Tech Leads US Equity Decline; JAPAN X: Softbank's ARM Done(Almost), PayPay IPO Next?

SPX declines lead by Tech; JAPAN: NKY Futs -0.6% Disc vs Cash; USDJPY 1471; Cabinet reshuffle day - changes in Defense and Foreign Affairs; GTX...

Mark Chadwick

IHI (7013) | Brace for a ¥130b Charge

​IHI's share price drops 16% as Pratt & Whitney's engine issues impact revenue and earnings projections, leading to potential losses and impact on...

Mark Chadwick

Ohayo Japan: SPX Rebounds - Tesla Leads; JAPAN X: Japan Equities: Is This Rally Different?

SPX rebounds with Tesla leading; NKY Futs -0.1% vs Cash; USDJPY 146.6; JP yields rise; yen strengthens and Banks Rally as Ueda hints at...

Mark Chadwick

Toshiba (6502 JP): Tender Offer Launches, 1Q Results Increase Deal Risks

The 1Q results undermine the Board’s view of an overstated DCF and show its unwillingness to entertain a potential Kioxia merger as a superior...

Arun George

Ohayo Japan| SPX -2.3%WoW; Buffett Buying UST; NUGGET:Motorcycle Electrification - Honda Roars Ahead

JAPAN. NKY Futures -0.8% vs Cash; USDJPY 141.8; Strong JP earning season so far- NP +20%YoY; Global Investors favor Japan over China; Oasis's...

Mark Chadwick

IHI's share price drops 16% as Pratt & Whitney's engine issues impact revenue and earnings projections, leading to potential losses and impact on...