Pan-Asia Tactical Market Calls (Quant-Driven), MRM Research

Nico Rosti

Pan-Asia Tactical Market Calls (Quant-Driven)

MRM Research

Quantitative Research

Equity Derivatives

<ul>
<li>The <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 INDEX</a> fell -5.77% during July and August (CC=-2). Currently the index is down for September: this month's negative Close would be = <strong>CC=-3</strong>, a strong <strong>LONG</strong> signal.</li>
<li>The index reached a low = 31275.25 in August, right in the middle of the 32391-30600 support price band indicated in our <a href="https://www.smartkarma.com/insights/eqd-nikkei-225-nky-monthly-trajectories" target="_blank" rel="noopener">previous MONTHLY Trajectories Analysis</a>,  50%-75% reversal probability.</li>
<li>LONG Support levels are confirmed, in this insight we will analyze the new, re-calculated Resistance levels, to evaluate how far/how long the index could rise, if it rallies.</li>
</ul>


The Nikkei 225 INDEX fell -5.77% during July and August (CC=-2). Currently the index is down for September: this month's negative Close would be = CC=-3, a strong LONG signal.
The index reached a low = 31275.25 in August, right in the middle of the 32391-30600 support price band indicated in our previous MONTHLY Trajectories Analysis,  50%-75% reversal probability.
LONG Support levels are confirmed, in this insight we will analyze the new, re-calculated Resistance levels, to evaluate how far/how long the index could rise, if it rallies.


EQD | Nikkei 225 (NKY) MONTHLY Trajectories Analysis

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/olympus-corp" target="_blank" data-smartkarma-citation="entities:356:1" rel="noopener">Olympus Corp (7733 JP)</a> announced muted Q1FY24 result. Revenue increased 8% YoY to ¥208B, while operating profit declined 50% YoY to ¥22B. A one-time gain has inflated the net profit.</li>
<li>Revenue missed about 3% compared to the plan. Product shipment hold and parts supply shortages represented about 1.5% points out of the total miss of 3%.</li>
<li>Olympus has reiterated FY24 guidance and expects FY24 revenue of ¥914B (+4% YoY) and operating profit of ¥163B (-13% YoY). In FY23, the company missed operating profit guidance.</li>
</ul>



Olympus Corp (7733 JP) announced muted Q1FY24 result. Revenue increased 8% YoY to ¥208B, while operating profit declined 50% YoY to ¥22B. A one-time gain has inflated the net profit.
Revenue missed about 3% compared to the plan. Product shipment hold and parts supply shortages represented about 1.5% points out of the total miss of 3%.
Olympus has reiterated FY24 guidance and expects FY24 revenue of ¥914B (+4% YoY) and operating profit of ¥163B (-13% YoY). In FY23, the company missed operating profit guidance.


Olympus Corp (7733 JP): Slow Start of FY24; Unfavorable Macro Backdrop Continues to Hurt Business

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, 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.

<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>The <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> rallied +27% in the first 6 months of 2023. 6 months closed up, July closed (barely) down. The index can rise further in Aug/Sep.</li>
<li>If August is down, a LONG opportunity: look at support prices between 32391 and 30600,  good probability to see the market going higher from there.</li>
<li>If rallying in August, Nikkei could rise between +1.73% (33745) and +3.29% (34265). Continuation of the rally into September could reach higher prices but will encounter resistance at +8.29% (35922).</li>
</ul>


The Nikkei 225 (NKY INDEX) rallied +27% in the first 6 months of 2023. 6 months closed up, July closed (barely) down. The index can rise further in Aug/Sep.
If August is down, a LONG opportunity: look at support prices between 32391 and 30600,  good probability to see the market going higher from there.
If rallying in August, Nikkei could rise between +1.73% (33745) and +3.29% (34265). Continuation of the rally into September could reach higher prices but will encounter resistance at +8.29% (35922).


EQD | Nikkei 225 (NKY) MONTHLY Trajectories

<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

Japan

OLYMPUS CORPORATION manufactures optoelectronic products.  The Company's products include cameras, video sets, endoscopes for medicine and industrial use, microscopes, analytical equipment, office communication systems, laseroptical scanners, and ionic printers.

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Olympus Corp (7733 JP)

EQD | Nikkei 225 (NKY) MONTHLY Trajectories Analysis

The Nikkei 225 INDEX fell in July/August. Currently down also in September, could reach OVERSOLD condition. Newly-generated resistance levels are...

Nico Rosti