Equity Analyst, LightStream Research

Farha Sabri

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

Sony has revealed that it will be acquiring Insomniac Games, the developers of 2018's Spider-Man game which was one of the best-selling titles of the year.  Following this, news also broke out about a possible end to the Sony-Disney movie partnership which may result of the Spider-Man character not appearing in Disney's MCU movies and vice versa.  In our opinion, the break up of the partnership does not have too many negatives since Sony still has rights to a well known, popular, family friendly character and Sony Pictures does have the expertise to build on this even without Disney's aid. If Sony can position itself as the go to destination for superhero/fantasy escapism and tie this into the gaming franchise this would address the concerns about the long-term outlook for the Pictures business and could have a significant impact on the company’s bottom line.

Sony has revealed that it will be acquiring Insomniac Games, the developers of 2018's Spider-Man game which was one of the best-selling titles of the year.  Following this, news also broke out about a possible end to the Sony-Disney movie partnership which may result of the Spider-Man character not appearing in Disney's MCU movies and vice versa.  In our opinion, the break up of the partnership does not have too many negatives since Sony still has rights to a well known, popular, family friendly character and Sony Pictures does have the expertise to build on this even without Disney's aid. If Sony can position itself as the go to destination for superhero/fantasy escapism and tie this into the gaming franchise this would address the concerns about the long-term outlook for the Pictures business and could have a significant impact on the company’s bottom line.

The Future of Sony’s Spider-Man Franchise: You Win Some, You Lose Some

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

We highlight attractive and actionable themes within developed international markets, including actionable set-ups across among: Non-bank Financials, Japanese Technology stocks, and within European Discretionary, Industrial, Health Care, and Staples sectors.

We highlight attractive and actionable themes within developed international markets, including actionable set-ups across among: Non-bank Financials, Japanese Technology stocks, and within European Discretionary, Industrial, Health Care, and Staples sectors.

Developed International Equity Strategy: Favor EAFE over EM

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Thematic (Sector/Industry)

The whitelist lifting means that Japan is now able to export restrict about 1,200 materials/products to Korea. It is expected that Japan will unveil more details of the next measures on Aug 8. Until then, it's only a guessing game. Even after Aug 8, it is very possible that we won't have any clearer visual on the situation. Probably, this is what the Japanese government wants: creating uncertainties one after another. Nonetheless, we are not short of local speculations about which specific products or materials to be export restricted in the next round. Here are the 4 strong candidates being speculated by local media and industry experts.<ol>
<li>Silicon wafer</li>
<li>Shadow mask (FMM: fine metal mask)</li>
<li>Image sensor</li>
<li>Li-ion battery separator</li>
</ol>

The whitelist lifting means that Japan is now able to export restrict about 1,200 materials/products to Korea. It is expected that Japan will unveil more details of the next measures on Aug 8. Until then, it's only a guessing game. Even after Aug 8, it is very possible that we won't have any clearer visual on the situation. Probably, this is what the Japanese government wants: creating uncertainties one after another. Nonetheless, we are not short of local speculations about which specific products or materials to be export restricted in the next round. Here are the 4 strong candidates being speculated by local media and industry experts.
Silicon wafer
Shadow mask (FMM: fine metal mask)
Image sensor
Li-ion battery separator


Japan's Second Round of Export Restrictions Against Korea: 4 Candidate Products

<ul>
<li>Sony reported 1QFY03/20 earnings on Tuesday, beating consensus estimates at the OP line. Sony’s revenue fell by -1.4% YoY to JPY1,925.7bn YoY while OP surged by 18.4% YoY to JPY230.9bn.</li>
<li>The fall in revenue was a result of a decline in unit sales of consumer electronics. Meanwhile, the rise in OP was mainly a result of strong performance in the sensors business. Imaging sensors have continued to experience increasing demand as the number of cameras per phone increase.</li>
<li>As per consensus, Sony is currently trading at a FY1EV/OP multiple of 8.2x, at a 22% discount to its 3-year historical median FY1EV/OP multiple of 10.6x.</li>
<li>Even though Sony’s Electronics segment’s weakness is a concern we believe the mild pace of decline in Gaming OP, continued growth of music streaming and remarkable strength of the semiconductor business are the bigger stories.</li>
</ul>


Sony reported 1QFY03/20 earnings on Tuesday, beating consensus estimates at the OP line. Sony’s revenue fell by -1.4% YoY to JPY1,925.7bn YoY while OP surged by 18.4% YoY to JPY230.9bn.
The fall in revenue was a result of a decline in unit sales of consumer electronics. Meanwhile, the rise in OP was mainly a result of strong performance in the sensors business. Imaging sensors have continued to experience increasing demand as the number of cameras per phone increase.
As per consensus, Sony is currently trading at a FY1EV/OP multiple of 8.2x, at a 22% discount to its 3-year historical median FY1EV/OP multiple of 10.6x.
Even though Sony’s Electronics segment’s weakness is a concern we believe the mild pace of decline in Gaming OP, continued growth of music streaming and remarkable strength of the semiconductor business are the bigger stories.


Sony Downgrades FY03/20 Revenue Forecast Amidst Predictions of Lacklustre Demand for Electronics

Despite several indexes recently touching new 52+ week highs, broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) remain near logical resistance, and indicators continue to send mixed signals. As a result we are hesitant to get too bullish or bearish. Instead we want to focus on Sector/Group/industry themes where we bottoming price and RS, or attractive pullback opportunities within established price and RS uptrends.  In this report we highlight such opportunities, within the Technology, Consumer Staples and Services Sectors.

Despite several indexes recently touching new 52+ week highs, broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) remain near logical resistance, and indicators continue to send mixed signals. As a result we are hesitant to get too bullish or bearish. Instead we want to focus on Sector/Group/industry themes where we bottoming price and RS, or attractive pullback opportunities within established price and RS uptrends.  In this report we highlight such opportunities, within the Technology, Consumer Staples and Services Sectors.

Global Equity Strategy: Not Too Bullish, Not Too Bearish

Japan

Sony Corporation manufactures audio, home video game consoles, communications, key device and information technology products for the consumer and professional markets.  The Company's other businesses include music, pictures, computer entertainment, and online businesses.

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Sony Corp (6758 JP)

The Future of Sony’s Spider-Man Franchise: You Win Some, You Lose Some

Sony has revealed that it will be acquiring Insomniac Games, the developers of 2018's Spider-Man game which was one of the best-selling titles of...

Farha Sabri

Developed International Equity Strategy: Favor EAFE over EM

We highlight attractive and actionable themes within developed international markets, including actionable set-ups across among: Non-bank...

Vermilion Research

Japan's Second Round of Export Restrictions Against Korea: 4 Candidate Products

The whitelist lifting means that Japan is now able to export restrict about 1,200 materials/products to Korea. It is expected that Japan will...

Sanghyun Park

Sony Downgrades FY03/20 Revenue Forecast Amidst Predictions of Lacklustre Demand for Electronics

Sony reported 1QFY03/20 earnings on Tuesday, beating consensus estimates at the OP line. Sony’s revenue fell by -1.4% YoY to JPY1,925.7bn YoY...

Farha Sabri

Global Equity Strategy: Not Too Bullish, Not Too Bearish

Despite several indexes recently touching new 52+ week highs, broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) remain near logical...

Vermilion Research

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