Daily BriefsJapan

Japan: Tokyo Electron, Kirin Holdings, Lasertec Corp, TeamSpirit Inc, Softbank Group and more

In today’s briefing:

  • StubWorld: TBS/Tokyo Electron, Intouch/Gulf, Jardines’ Buybacks
  • Kirin: An Asset Write-Down/Disposal Could Be Pending for the Military Linked Myanmar JV
  • Lasertec (6920 JP): Overbought, Take Profits
  • Japan Small Cap Growth: TeamSpirit (4397) – Expect Brighter Second Half
  • Morning Views Asia: China Fortune Land, China SCE, Softbank Group

StubWorld: TBS/Tokyo Electron, Intouch/Gulf, Jardines’ Buybacks

By David Blennerhassett

This week in StubWorld …

Preceding my comments on these holdcos are the weekly setup/unwind tables for Asia-Pacific Holdcos.

These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold – the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent – of at least 20%.


Kirin: An Asset Write-Down/Disposal Could Be Pending for the Military Linked Myanmar JV

By Oshadhi Kumarasiri

Last week, Kirin Holdings (2503 JP)announced that the independent assessment of its Myanmar JV partner, Myanmar Economic Holdings (MEHL), failed to produce any results due to the lack of access to a sufficient amount of MEHL’s information. Kirin is expected to provide an action plan to resolve the issues relating to the Myanmar JV in April 2021. We believe the April 2021 action plan could be accompanied by an asset write-down and therefore suggests taking some money off Kirin before the April 2021 announcement.


Lasertec (6920 JP): Overbought, Take Profits

By Scott Foster

Lasertec has produced stupendous results, but is it worth 104x management’s EPS guidance for FY Jun-21 and 96x cash flow per share? As the company aims to more than double R&D spending to 12% of sales, we think a substantial amount of short-term profit is likely to be traded for long-term sales growth, and that the shares are due for some profit taking.

In 🇯🇵 JAPAN • New Post Bubble $ High + Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​08 , Campbell Gunn writes that: As the market factors in the possibility of a return to commodity inflation and digests another State of Emergency, the Technology Hardware Sector joins Electrical Equipment and Machinery in Overbought territory. 

Management is guiding for flat orders this fiscal year and while this is probably conservative, it would be not be inconsistent with the orders trend in recent years. New orders jumped 80% in FY Jun-20, but were up only 4% the year before.

Lasertec’s fundamentals are sound. This is a trading idea.


Japan Small Cap Growth: TeamSpirit (4397) – Expect Brighter Second Half

By Mark Chadwick

Q1 trading update 

TeamSpirit Inc (4397 JP)  released Q1 results on 12 Jan, which were generally in line with previously released guidance for the full year. Covid restrictions continue to be a negative headwind on contracting new clients, which is impacting top line growth rates.  This seems especially true of small and mid-sized companies, where growth has stalled badly, and we believe competition may be heating up in that segment. In response, Team Spirit is shifting its sales focus towards larger enterprises and this mix improvement is a bright spot in the Q1 report, with the number of enterprise licences jumping 44% YoY. The share price remains around 30% below its 52-week high.  

Million Yen
1Q20
2Q20
3Q20
4Q20
1Q21
Sales
552
606
631
654
671
Sales growth 
40%
35%
39%
26%
22%
Operating Profit
44
84
106
50
71
Operating margin
8%
14%
17%
8%
11%
Net Income
14
42
55
142
36

 


Morning Views Asia: China Fortune Land, China SCE, Softbank Group

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.


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