What's up in Japan | 4Q20 review
Updated: May 5, 2021
๐ฏ๐ต Whatโs up in Japan? ๐ฏ๐ต
A review of the major headlines and developments in Japan over the fourth quarter of 2020.
๐ฏ๐ต Whatโs up in Japan? ๐ฏ๐ต
Week ending 11 Dec, 2020 (๐น NKY -0.4% )
STIMULUS #3. GREEN AND DIGITAL. Hot on the heels of two earlier supplementary budgets, the third stimulus package is a further $300b, taking the total stimulus this year to almost 17% of GDP.
GREEN TECH. 88 Japanese companies have formed JH2A, an body that works to ensure that Japan leads the world in the use of hydrogen #zeroemissions
SOLID STATE BATTERIES. VWโs QuantumScape said its solid state batteries allow a car to charge to 80% of its full capacity in 15 mins. Toyota claims that its newly developed batteries enable a maximum EV range of 500km in one full charge and a 0 to 100% charging time of just 10 mins
MORE ON SOLID STATE. Toyota taking the lead. Small cap plays include Ohara (5218), Mitsui Kinzoku (5706), and Sannoh Industrial (6584)
GREATER DIVERSITY. Companies will be encouraged to set voluntary targets for diversity - women & foreigners - in the new CorpGov Code (Spring 2021).
GOVERNANCE WORKING. Facing a shareholder revolt, Fujitec, announced a treasury share cancellation, new strategic direction, and improved (slightly) governance
VALUING JP IP. The popular manga series "Demon Slayer: Kimetsu no Yaiba" has generated an economic impact of at least $2.5b
JAPAN VACCINE DEVELOPMENT LAGGARD. Lack of government support and inadequate scale of Japan Pharmas cited as causes.
โ Links to the above stories can be found ๐๐๐
Demon Slayer
Diversity
Hydrogen
https://global.toyota/en/newsroom/corporate/34409857.html
Stimulus
https://www.ft.com/content/2c927471-849c-4635-8844-31b12b91b613
Solid State
https://www.topgear.com.ph/news/technology-news/toyota-solid-state-battery-a4354-20201210
Why Japan is largely a spectator in the coronavirus vaccine race
https://www.japantimes.co.jp/news/2020/12/11/business/japan-slow-corona-vaccine/
Ohara
https://www.nikkei.com/article/DGXZASFL10HHL_Q0A211C2000000
Why Japan is largely a spectator in the coronavirus vaccine race
https://www.japantimes.co.jp/news/2020/12/11/business/japan-slow-corona-vaccine/
๐ฏ๐ต Whatโs up in Japan? ๐ฏ๐ต
Week ending 4 Dec, 2020 (๐น NKY +0.4%)
BRAIN DRAIN ๐คฏ: Japan is struggling to retain homeground talent in science as China makes attractive offers on compensation and conditions to Japanese researchers. EMPLOYEE SHARING is taking off as Japanese companies are becoming more flexible and starting to share workers.
DIVERSITY TARGETS ๐คฆโโ๏ธ: A mere 8% of senior execs are female in Japan, missing the Government target of 10%. Japan is far behind global peers.
SUGA TALKS: Spend $10b on digitalization of economy and $20b on shift to carbon neutral. These two key planks of policy will continue to drive stock selection.
MOBILE PRICE CUTS: Docomo finally bows to pressure from Suga in long-running fight to lower Japanโs expensive mobile data plans ๐ช
JAPAN EVs ๐: Government likely to ban sale of gasoline cars by mid-2030โs following other developed nationsโ carbon neutral pledges
SOFTBANK: As Softbank closes controversial Call option positions, a more interesting acquisition of Sinch for $700m - a global leader in B2C mobile customer engagement.
IPO WATCH: Keeping an eye on PLAID (4165), set to IPO on the TSE Mothers Exchange on 17 Dec. They know who is coming and what they are doing on your website! ๐
โ Links to the above stories can be found ๐๐๐
BRAIN DRAIN.
EMPLOYEE SHARING TAKES OFF IN JAPAN.
https://www.nikkei.com/article/DGXMZO66803280Q0A131C2MM8000/
DIVERSITY
SUGA PRESSER
https://mainichi.jp/english/articles/20201205/p2g/00m/0na/014000c
MOBILE CARRIERS BOW - AGGRESSIVE PRICE CUTS - FINALLY
https://www.nikkei.com/article/DGKKZO66833950Q0A131C2MM8000/
JAPAN EVs
SOFTBANK
https://www.reuters.com/article/us-sinch-softbank-idUSKBN28B427
EXCITING NEW IPO - JAPAN DX PLAY
https://press.plaid.co.jp/data/20201112/
๐ฏ๐ต Whatโs up in Japan? ๐ฏ๐ต
Week end 27 November, 2020
One month following Oasisโ calls for an EGM at Tokyo Dome, Mitsui Fudosan has emerged as a โwhite knightโ. Oasis had called for the removal of long-standing Prez & โindependentโ directors. Is $1.2b fair value? ๐คซ
More signs of digitalization as SMBC cashiers hand out QR codes rather than yen bills. ๐ง
Japan may be engaging in a great leap into digital transformation, but it seems to have forgotten to safeguard its systems, leaving them wide open to cyber attacks.โ๏ธ
Luckily however, the government is about to provide tax incentives to pursue DXโฆ.companies will have to undergo regular cyber security audits.
Activist investors promise to make life hell for Japan's CEOs...but,erm, see number one.โซ
There is still a long way to go for hydrogen to justify the hype as the next big thing in transportationโฆ.Asia focused, but ditto for Japan.
Re-alignment of regional banks is one of PM Sugaโs key policies. New laws put into place to skirt anti-monopoly concerns. Good ๐บ in the link ๐
โ Links to the above stories can be found ๐๐๐
Nikkei on Tokyo Dome
Oasis on Tokyo Dome
https://www.abettertokyodome.com/introduction
Reuters on Mitsui ToB
Japan Times on Digital Banking
NHK on CrowdStrikeโs rather shocking findings
https://www3.nhk.or.jp/nhkworld/en/news/20201126_31/
Nikkei on tax incentives for DX transformers
https://www.nikkei.com/article/DGKKZO66619910V21C20A1EE8000
Board Prospects on activism
http://news.boardprospects.com/articles/4630017/activist-investors-promise-to-make-life-hell-for-j/
WSJ on the hydrogen economy
https://www.wsj.com/articles/asias-hydrogen-fuel-future-may-be-coalescing-11606135841
NHK Video explaining regional banks and non-banks
https://www3.nhk.or.jp/nhkworld/en/news/videos/20201127204110867/
๐ฏ๐ต Whatโs up in Japan? ๐ฏ๐ต
Week end 20 November, 2020 (๐น NKY -1.5%)
Coronavirus cases hit a record daily high of 2,427โฆ.The Go To Travel domestic tourism campaign may be suspended. Olympic games 2021, discuss?
Japan to invite bids for offshore wind plants off Chiba and Akita...yes, get on with it.
Japanโs new Digital Ministry to nab 150 IT engineers from the private sector. Wonder if they will use TechnoPro or Altech to source the talent?
Asia mega trade deal as Asia becomes the worldโs torchbearer for free trade. The catchily-named RCEP will eliminate 86% of tariffs on Japan exports to China.
Kerching: KKR and Rakuten to invest in supermarket, Seiyu. Hitachi Metals also on the chopping block as Hitachi continues to unlock value ๐
Amazon to start selling prescription drugs to Prime customers...Japan drugstore stocks = placebo
If you are not up to speed on 5Gโฆ.then fuhgeddaboudit. 6G is the next big thing and NTT wants to be top dog. ๐ถ
Will Daikin investors get cold feet as Elon Musk eyes the HVAC market?
โ Links to the above stories can be found ๐๐๐
https://www.zerohedge.com/technology/amazon-start-selling-prescription-drugs-prime-custtomers
https://www.nikkei.com/article/DGKKZO66190930T11C20A1MM8000/
https://thediplomat.com/2020/11/how-will-japan-reach-its-landmark-zero-carbon-goal/
https://mainichi.jp/english/articles/20201116/p2g/00m/0bu/070000c
https://www.japantimes.co.jp/opinion/2020/11/19/editorials/rcep-big-numbers-bigger-potential/
https://asia.nikkei.com/Business/Telecommunication/NTT-goes-all-in-on-6G-for-return-to-global-stage
https://www.inverse.com/innovation/tesla-air-conditioner-elon-musk-sure-would-love-to-take-on-hvac
๐ฏ๐ต Whatโs up in Japan? ๐ฏ๐ต
Week end 20 November, 2020 (๐น NKY +4.2%)
In the week when Pfizer announced a vaccine: Japan registered 1,705 new COVID cases, a new record. Third ๐
We are going to hear a lot more about the 'Quad'. Australian Prime Minister Scott Morrison will travel to Tokyo next week to meet his Japanese counterpart Yoshihide Suga against the backdrop of increasing tensions with China
Hereโs more about the โQuadโ: Biden affirms security treaty applies to Senkaku Islands in Suga call. China calls US-Japan arrangement a product of the Cold War ๐ฅถ
Some hostile conflicts are good: Shimachu agrees to accept the $2b TOB offer from Nitori, shifting from DCMs offer.
Japan Inc. net profit is expected to be down 34% from the previous year. However, over 30% of companies have revised up full-year guidance as many are now expecting a significant recovery in the second half of the year.
Tax breaks for lower carbon emission investments. Offshore wind bids are about to kick off for Chiba and Akita.
Fast Forward Money Forward & Freee! Japanโs MoF is reviewing the procedures for paper-based tax treatment in corporate expense reimbursements.
Sony's PlayStation 5 goes on sale, pre-orders overwhelm supply. Retailing at 39,980 yen, you may be lucky to pick one up on Yahoo Auction for 80,000 ๐ฅ
โ Links to the above stories can be found ๐๐๐
Australia PM in Japan
https://japantoday.com/category/politics/Australian-PM-Morrison-to-visit-Japan-next-week
Biden-Suga call
Nitori / Shimachu deal
https://www.dealstreetasia.com/stories/shimachu-nitori-dcms-215451/
Japan corporate profits
https://www.nikkei.com/article/DGKKZO66091450R11C20A1MM8000/
Carbon tax breaks
Wind bids
https://www.japantimes.co.jp/news/2020/11/13/business/applications-wind-power-plants/
Japan MOF tax policy
https://www.nikkei.com/article/DGKKZO65967410X01C20A1MM8000/
๐ฏ๐ต What's up in Japan? ๐ฏ๐ต
Week of 6 November, 2020
1) The Nikkei-225 ended the week at its highest level since the collapse of Japanโs bubble economy in the early 1990s ๐ฅ๐พ
2) Youngsters escaping Tokyo. Third straight month those moving out outnumbered those moving in, the longest run on record, led by people in their 20s and 30s.
3) Telco capex to rise sharply as Softbank and KDDI budget around $20b each to roll out 5G base stations over the next 10 years.
4) Nidec plans $2bn motor factory in Europe as part of wider $10bn investment for EV motor dominance
5) Japan Airlines to raise up to $1.6 billion through a public offering, following a collapse in demand for air transport.
6) The Nuclear agency in Japan reportedly suffered a cyber attack. Corporates will need to step up investment in security as they embrace digital transformation ๐จ
7) Brighter days ahead as many companies beat or raise - Honda, Nintendo Daikin, Kirin, Unicharm and Toyota ๐๐๐
โ Links to the above stories can be found ๐๐๐
Japan Airlines
https://asia.nikkei.com/Business/Transportation/Japan-Airlines-to-raise-up-to-1.6bn-from-share-sale
Market at high
https://www.japantimes.co.jp/news/2020/11/06/business/financial-markets/nikkei-marks-29-year-high/
Japanese fleeing crowded Tokyo
https://uk.reuters.com/article/idUKKBN27K02P
Nidec
5G Spend
https://www.nikkei.com/article/DGKKZO65792470T01C20A1MM8000/
Cyber attack
https://www.silicon.co.uk/e-regulation/legal/japanese-nuclear-regulator-cyber-attack-348775
๐ฏ๐ต What's up in Japan? ๐ฏ๐ต
Week ending October 30, 2020
PM Suga officially unveiled Japanโs new commitment to go carbon neutral by 2050.
Japanese Gov't unveils further action plans to lower mobile phone fees...again.
Toyota (7203) to invest $500m in KDDI to develop 'connected car'.
ANA (9202) and JAL (9201) forecast a combined operating loss of 880 billion yen versus the current 1,400b yen mkt cap. Passenger traffic down 97% YoY in 1H
Sony (6758) close to finalizing a deal to buy US-based anime streaming service Crunchyroll for nearly $1 billion
MHI (7011) spring clean. Will suspend the development of Japan's first domestically produced passenger jet. Will also sell its 50% stake in offshore wind JV to Vestas.
Nitori (9843) to launch a rival takeover bid for Home Centre operator Shimachu (8184)
Bibliography
ANA/JAL
http://www.asahi.com/ajw/articles/13888499
MHI
MHI/vestas
https://www.offshorewind.biz/2020/10/29/vestas-to-take-full-ownership-of-mhi-vestas/.
Mobile fees
https://japantoday.com/category/tech/gov%27t-sets-action-plan-to-lower-mobile-phone-fees.
Nitori
SONY/Crunchyroll
Suga/zero emissions
https://www.japantimes.co.jp/news/2020/10/26/national/politics-diplomacy/sugas-first-diet-speech/.
Toyota/KDDI
https://www.autonews.com/mobility-report/toyota-invest-500-million-kddi-deepen-ties-connected-car.