Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<p>Sky Perfect JSAT operates Japan’s only direct-to-home (DTH) video service and is Asia’s largest satellite operator. As a well-known consumer-facing service, the former is better known and has often driven sentiment but the key to unlock value may be in the latter as the space industry expands. An increase in space industry investment brings new opportunities but also heightened competition from low-earth satellite fleets albeit at less intensity than its global peers. On balance, we think the changes are positive and we initiate coverage at Buy with a ¥640 FY21-end target price.</p>

Sky Perfect JSAT operates Japan’s only direct-to-home (DTH) video service and is Asia’s largest satellite operator. As a well-known consumer-facing service, the former is better known and has often driven sentiment but the key to unlock value may be in the latter as the space industry expands. An increase in space industry investment brings new opportunities but also heightened competition from low-earth satellite fleets albeit at less intensity than its global peers. On balance, we think the changes are positive and we initiate coverage at Buy with a ¥640 FY21-end target price.

Sky Perfect JSAT - Upside Potential in Space Business (Initiation of Coverage)

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/610/original/2019-05-02_15-37-25.png?1556779059" class="editor-image img-responsive" data-smartkarma-image-id="86610"></figure><p>Source: Japan Analytics</p>
</div><div class="content-caption">This update on <a href="https://www.smartkarma.com/entities/8197" target="_blank" data-smartkarma-citation="entities:8197:1">CyberAgent Inc (4751 JP)</a> should be read in conjunction with our earlier Insight <a href="https://www.smartkarma.com/insights/cyberagent-tumbling-dice" target="_blank" data-smartkarma-citation="insights:27690">CyberAgent: Tumbling Dice</a>. </div><p><strong>RECORD SALES</strong> - As the company never tires of pointing out, CyberAgent's revenues continue to grow apace. The interim quarter saw a record amount of revenue in any quarter of ¥117b, an increase of 7% year-on-year and a record amount for any trailing-twelve-month (TTM) period of ¥440b, 10% above the level reached in FY18-Q2. The IR materials describe this achievement as <em>'reaching cruising speed again'</em>, although from the TTM chart above it is hard to see when there was any deceleration. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/616/original/2019-05-02_15-56-10.png?1556780188" class="editor-image img-responsive" data-smartkarma-image-id="86616"></figure><div class="content-caption">Source: CyberAgent</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/086/614/original/2019-05-02_15-35-10.png?1556779655" class="editor-image img-responsive" data-smartkarma-image-id="86614"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>DON'T LOOK ANY FURTHER</strong> - The further down the Income Statment one travels, the less appealing the picture. The company likes to present its profitability in terms of what it describes as 'existing business, excluding investment development'. The latter has produced over ¥20b in one-off gains over the last five years, which have helped offset nearly ¥62b in 'up-front investment in the AbemaTV business' which will presumably cease not to exist if and when it turns a profit. Even using CyberAgent's logic, the second quarter was the third straight quarter of declining year-on-year profitability. Shareholders meanwhile have to make do with what is generated at the true bottom-line of the Income Statement - Comprehensive Income which saw an increase of just ¥3.2b in the quarter, 24% of 'adjusted' profits.  <strong>CyberAgent's Shareholders' Equity (including Other Comprehensive Income) is ¥358m lower than at FY17-Q4 and has declined by 4% since peaking in FY18-Q3.  It is no surprise therefore that the company's PBR has declined by a third in less than a year, although it is still 39% above the FY17-Q4 low.  </strong></p><div class="content-highlight"><p>In the<strong> DETAIL</strong> section below, we shall cover the interim results in more detail and update the implied valuation for the AbemaTV business. In keeping with the previous report, we provide this brief musical interlude from <strong>M People</strong> in Berlin.</p></div><p><iframe src="https://www.youtube.com/embed/IwBCyvBMgjQ" width="1280" height="720" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>


Source: Japan Analytics
This update on CyberAgent Inc (4751 JP) should be read in conjunction with our earlier Insight CyberAgent: Tumbling Dice. RECORD SALES - As the company never tires of pointing out, CyberAgent's revenues continue to grow apace. The interim quarter saw a record amount of revenue in any quarter of ¥117b, an increase of 7% year-on-year and a record amount for any trailing-twelve-month (TTM) period of ¥440b, 10% above the level reached in FY18-Q2. The IR materials describe this achievement as 'reaching cruising speed again', although from the TTM chart above it is hard to see when there was any deceleration. Source: CyberAgentSource: Japan AnalyticsDON'T LOOK ANY FURTHER - The further down the Income Statment one travels, the less appealing the picture. The company likes to present its profitability in terms of what it describes as 'existing business, excluding investment development'. The latter has produced over ¥20b in one-off gains over the last five years, which have helped offset nearly ¥62b in 'up-front investment in the AbemaTV business' which will presumably cease not to exist if and when it turns a profit. Even using CyberAgent's logic, the second quarter was the third straight quarter of declining year-on-year profitability. Shareholders meanwhile have to make do with what is generated at the true bottom-line of the Income Statement - Comprehensive Income which saw an increase of just ¥3.2b in the quarter, 24% of 'adjusted' profits.  CyberAgent's Shareholders' Equity (including Other Comprehensive Income) is ¥358m lower than at FY17-Q4 and has declined by 4% since peaking in FY18-Q3.  It is no surprise therefore that the company's PBR has declined by a third in less than a year, although it is still 39% above the FY17-Q4 low.  In the DETAIL section below, we shall cover the interim results in more detail and update the implied valuation for the AbemaTV business. In keeping with the previous report, we provide this brief musical interlude from M People in Berlin.

4751 🇯🇵 CyberAgent • Interim Update - Don't Look Any Further

Equity Analyst, LightStream Research

Supun Walpola

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.

<p><span lang="EN-GB">Toyota’s current dividend and buyback yields are 3.1% and 2.1% respectively (at the current market price of JPY7,199 as of 22<sup>nd</sup> June 2018) bringing Toyota’s current cash yield (dividend yield plus buyback yield) to 5.2%. Toyota’s cash yield has been above the 5% mark consistently since FY03/15.</span></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/055/962/original/Toyota.PNG?1529972342" class="editor-image img-responsive" data-smartkarma-image-id="55962"></figure><div class="content-remarks"><p><em>Source: Capital IQ and LSR Calculations</em></p></div><p><strong>We find Toyota’s high cash yield attractive as markets head towards bear territory.</strong> Toyota is in the higher end of the dividend yield spectrum among the Nikkei 225…</p>

Toyota’s current dividend and buyback yields are 3.1% and 2.1% respectively (at the current market price of JPY7,199 as of 22nd June 2018) bringing Toyota’s current cash yield (dividend yield plus buyback yield) to 5.2%. Toyota’s cash yield has been above the 5% mark consistently since FY03/15.Source: Capital IQ and LSR CalculationsWe find Toyota’s high cash yield attractive as markets head towards bear territory. Toyota is in the higher end of the dividend yield spectrum among the Nikkei 225…

Toyota for Bears: How Attractive Are Income Yields?

Japan

SKY Perfect JSAT Holdings, Inc. is a holding company, which manages financial operations for its subsidiaries. As a group, the Company provides broadcasting and data transmission services via satellites. SKY Perfect JSAT delivers digital TV programs including movies, music, sports and entertainment to its subscribers.

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Sky Perfect Jsat (9412 JP)

Sky Perfect JSAT - Upside Potential in Space Business (Initiation of Coverage)

Sky Perfect JSAT is better known for its direct broadcast satellite (DBS) video business but the space business represents more value and has been...

Kirk Boodry

4751 🇯🇵 CyberAgent • Interim Update - Don't Look Any Further

RECORD SALES - As the company never tires of pointing out, CyberAgent's revenues continue to grow apace. The interim quarter saw a record amount of...

Campbell Gunn

Toyota for Bears: How Attractive Are Income Yields?

Toyota’s current dividend and buyback yields are 3.1% and 2.1% respectively (at the current market price of JPY7,199 as of 22nd June 2018) bringing...

Supun Walpola

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