Japan Specialist

Mark Chadwick

Over 20 years experience in equities and asset management in Asia and Japan. Qualified CFA with experience analyzing companies as a buy-side analyst. In-depth knowledge of company fundamental analysis, corporate governance and valuations.

Equity Bottom-Up

<ul>
<li>Rising memory prices are significantly increasing Switch 2 hardware costs, threatening margin compression below expectations and undermining management’s prior guidance on maintaining stable profitability levels.</li>
<li>Even with potential price hikes, higher ASPs may dampen unit demand, reducing operating leverage and forcing consensus earnings cuts across FY3/27–28 as hardware profitability deteriorates.</li>
<li>Valuation remains stretched relative to historical norms, leaving limited downside protection if earnings reset lower and increasing vulnerability to sentiment reversals amid uncertain cost trajectories.</li>
</ul>


Rising memory prices are significantly increasing Switch 2 hardware costs, threatening margin compression below expectations and undermining management’s prior guidance on maintaining stable profitability levels.
Even with potential price hikes, higher ASPs may dampen unit demand, reducing operating leverage and forcing consensus earnings cuts across FY3/27–28 as hardware profitability deteriorates.
Valuation remains stretched relative to historical norms, leaving limited downside protection if earnings reset lower and increasing vulnerability to sentiment reversals amid uncertain cost trajectories.


Nintendo

Nintendo (7974) | Profitability at Risk