Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<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 2023 full-year results on 30 January. Results were mixed. Revenues did OK. Net Profit underperformed expectations. 2024 Net Profit Guidance is 1% higher than consensus.</li>
<li>Canon has a 15yr history of one kind of buyback. ¥50bn every time. 19 times in a row. Short (10 weeks max), sharp, executions (executed in 3-5 weeks). Every time. </li>
<li>This time offers a new buyback. ¥100bn. Over the space of a year. That's only 3% of ADV but the shareholder structure is different than you think it is.</li>
</ul>



Canon Inc (7751 JP) announced 2023 full-year results on 30 January. Results were mixed. Revenues did OK. Net Profit underperformed expectations. 2024 Net Profit Guidance is 1% higher than consensus.
Canon has a 15yr history of one kind of buyback. ¥50bn every time. 19 times in a row. Short (10 weeks max), sharp, executions (executed in 3-5 weeks). Every time. 
This time offers a new buyback. ¥100bn. Over the space of a year. That's only 3% of ADV but the shareholder structure is different than you think it is.


Canon (7751) - OK 2023 Results, Better Guidance, Bigger, Longer, Slower Buyback

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, 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.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fujifilm-holdings-corp" target="_blank" data-smartkarma-citation="entities:16353:1" rel="noopener">FUJIFILM Holdings (4901 JP)</a> reported 1QFY03/24 results today. Both revenue and OP increased 5.6% and 5.2% YoY to ¥660.8bn (vs consensus ¥649bn) and ¥52.2bn (vs consensus ¥52.1bn) respectively.</li>
<li>Materials segment’s earnings were negatively impacted during the quarter due to a stagnant semiconductor market, however, we expect segment’s earnings to improve with the completion of Entegris acquisition.</li>
<li>Despite the company successfully transitioning into a healthcare player, Fujifilm is still trading in line with imaging/photocopy players and there is significant upside to the company’s current share price.</li>
</ul>



FUJIFILM Holdings (4901 JP) reported 1QFY03/24 results today. Both revenue and OP increased 5.6% and 5.2% YoY to ¥660.8bn (vs consensus ¥649bn) and ¥52.2bn (vs consensus ¥52.1bn) respectively.
Materials segment’s earnings were negatively impacted during the quarter due to a stagnant semiconductor market, however, we expect segment’s earnings to improve with the completion of Entegris acquisition.
Despite the company successfully transitioning into a healthcare player, Fujifilm is still trading in line with imaging/photocopy players and there is significant upside to the company’s current share price.


Fujifilm: Earnings Beat; Yet to Trade in Line with Healthcare Players

<ul>
<li>During 4QFY03/2023 results release, Nikon announced a medium-term target of revenues of ¥700bn, OPM of 10%+ and ROE of 8%+ by the end of FY2025E (FY ended 31st March 2026).</li>
<li>Our analysis (with conservative assumptions) suggests that the company could easily achieve its medium-term target despite the company expecting to see its earnings declining in FY03/2024E.</li>
<li>Nikon is trading at a discount to its Japanese peers Canon and Konica Minolta and we think the market is clearly undervaluing the company as a pure-play Imaging products player.</li>
</ul>


During 4QFY03/2023 results release, Nikon announced a medium-term target of revenues of ¥700bn, OPM of 10%+ and ROE of 8%+ by the end of FY2025E (FY ended 31st March 2026).
Our analysis (with conservative assumptions) suggests that the company could easily achieve its medium-term target despite the company expecting to see its earnings declining in FY03/2024E.
Nikon is trading at a discount to its Japanese peers Canon and Konica Minolta and we think the market is clearly undervaluing the company as a pure-play Imaging products player.


Nikon: A Reality Check on Nikon’s Medium-Term Management Plan

President, Vision Research

Robert C Prather Jr

President

Vision Research

Vision Research was formed in 2004 with the vision of generating the best possible fundamental analysis and investment research for smid cap US equities. In 2008, we broadened our coverage to include mid/large cap US stocks.  After researching a  few ideas outside the US each year for a number of years, we launched a dedicated non-US equity product at the end of 2015.  This was followed by the introduction of a product focused on IPOs in mid-2017.

Fundamental Insight

<ul>
<li>Large portion of the business is in secular decline and facing pricing pressure</li>
<li>
<a href="https://www.smartkarma.com/entities/ricoh-company-ltd" target="_blank" data-smartkarma-citation="entities:15359:1" rel="noopener">Ricoh Company Ltd (7752 JP)</a> appears to be losing share in a shrinking market</li>
<li>Estimates are above overly optimistic guidance making shares look optically inexpensive</li>
</ul>


Large portion of the business is in secular decline and facing pricing pressure

Ricoh Company Ltd (7752 JP) appears to be losing share in a shrinking market
Estimates are above overly optimistic guidance making shares look optically inexpensive


Ricoh (7752 JP) - Long Term Structural Decliner with a Recent Boost in Inorganic Rev & Profits

<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

Japan

Konica Minolta Inc is mainly engaged in manufacturing office equipment and performance materials. It also operates health care businesses. The Company also makes copiers, personal computer peripherals, optical lenses, and measuring instruments.

Konica Minolta (4902 JP)

Canon (7751) - OK 2023 Results, Better Guidance, Bigger, Longer, Slower Buyback

Canon results were OK but underperformed expectations at the net level. Guidance for 2024 are slightly above consensus. Interesting news is that...

Travis Lundy

Fujifilm: Earnings Beat; Yet to Trade in Line with Healthcare Players

Fujifilm's 1QFY24 earnings beat consensus. The company's transition into a healthcare player is yet to fully pay-off, and we expect recent M&As to...

Shifara Samsudeen, ACMA, CGMA

Nikon: A Reality Check on Nikon’s Medium-Term Management Plan

As Nikon is reporting earnings soon, this insight would help readers have a quick glance at the company's last quarter earnings and whether Nikon...

Shifara Samsudeen, ACMA, CGMA

Ricoh (7752 JP) - Long Term Structural Decliner with a Recent Boost in Inorganic Rev & Profits

A large portion of Ricoh's business is losing market share in an industry that is facing secular declines. Estimates that above optimistic...

Robert C Prather Jr

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