|
Report type: Weekly Strategy |
“”Go To” travel possibilities for GW, Gold and Platinum”
PM Kishida announced on 17/2 that border controls to prevent the influx of the Omicron variant of the coronavirus would be eased in March. It was decided to allow new entries of foreign nationals other than those for tourism purposes, and to raise the cap on the number of people returning or entering the country per day from the current level of about 3,500 to around 5,000. In principle, the seven-day quarantine period at designated facilities or at home will also be shortened. The day after the government’s policy was reported on 15/1, Japan Airlines (9201) and other air transport and travel-related stocks began to be sought after. Overseas, in the US state of California, the requirement to wear masks at outdoor events where more than 5,000 people gather has been lifted as the infection situation is deemed to have improved with the number of hospitalizations due to Covid-19 decreasing. Although a number of prefectures in Japan are extending the “quasi-emergency measures”, in response to the lifting of restrictions overseas, the stock market is expected to take a closer look at travel and leisure-related stocks that have not yet returned to pre-Covid-19 pandemic levels. Let us keep in mind the possibility of the return of “Go To Travel” incentives around the upcoming Golden Week period, before the Upper House election in July.
Among the various assets in the financial markets today, gold price is probably the one that attracts the most attention. Against the backdrop of geopolitical risks related to the recent situation in Ukraine and concerns about inflation following the release of the US Consumer Price Index on 10/2, the CMX gold futures price is showing an upward break from the triangle formation of $1,450 per ounce in March 2020 and $2,074 per ounce in August 2020, with the equilibrium level around $1,800 per ounce at the center of the triangle formation. In particular, the price of gold and US long-term interest rates have generally tended to move in opposite directions since the 21st century, but recently both have been on an upward trend over a certain period of time, even if their daily directions differ. As long as the US Fed does not turn to an aggressive stance of raising and tightening interest rates as it prioritizes inflation control over the economy, a rise in US long-term interest rates will be less likely to be accompanied by a stronger dollar. Stocks that are likely to benefit from higher gold prices will therefore be potential targets.
In addition, platinum (Pt) has traditionally been used mainly as a catalyst for diesel emission control, and the market had been sluggish until mid-December last year due to a slowdown in automobile production caused by a shortage of semiconductor supplies. However, recently demand for use in hydrogen generation and fuel cells to reduce greenhouse gas emissions has been attracting attention. The Biden administration announced on 15/2 that it will invest a total of $9.5 billion to promote hydrogen-related infrastructure needs and support production and storage. In this regard, the price of platinum is also on an upward trend. There may therefore be room for it to regain its luster as a “precious metal” just like gold.
In the 21/2 issue, we will be covering S. Ishimitsu (2750), Nintendo (7974), Unicharm (8113) and TV Tokyo Holdings (9413).
S. Ishimitsu & Co., Ltd (2750) 515 yen (18/2 closing price)
・Founded in Los Angeles in 1906 by Toshio Ishimitsu, who came to the United
States by himself. Company is a beverage and food importer that focuses on
importing and selling coffee. As a long-established green coffee bean trading
company, it has the largest share of the domestic market for commercial use.
・For 9M (Apr-Dec) results of FY2022/3 announced on 10/2, net sales increased by
16.1% to 34.888 billion yen compared to the same period the previous year, and
operating income increased by 32.5% to 837 million yen. Coffee bean futures
prices in the New York market were steady at 226.10 cents per pound at the end
of December, up 86% from the beginning of the year, contributing to increased
revenue from green coffee beans. Coffee beverages for commercial use also
benefited from a review of sales prices.
・For its full year plan, net sales is expected to increase by 12.8% to 45.692 billion
yen compared to the previous year, and operating income to increase by 1.5% to
1.107 billion yen. Annual dividend was revised upward to 14 yen per share
(original plan 12 yen), up 4 yen from the previous forecast. Demand in Europe
and the US has remained strong even while the prolonged disruption in maritime
logistics caused by the Covid-19 pandemic has delayed the arrival of products
from Brazil and other production areas to warehouses in European and US
consumption areas. Company is also developing in Thailand Japanese food
products for commercial use for the ASEAN market. Aiming to expand into third
country exports.
・Founded in 1889 as a manufacturer of “Hanafuta” (Japanese playing cards). Started manufacturing and selling “Karuta” (Japanese traditional playing cards) and western playing cards in 1947. Principal product is a “game console” using a computer. Has a 32% stake in The Pokemon Company, an equity-method affiliate.
・For 9M (Apr-Dec) results of FY2022/3 announced on 3/2, net sales decreased by 6.0% to 1.3202 trillion yen compared to the same period the previous year, and operating income decreased by 9.3% to 472.551 billion yen. The decrease in sales and profit was due to a reactionary decline after the huge hit of “Animal Crossing: New Horizons” in the same period the previous year. Total number of Nintendo Switch units at the end of December surpassed that of Wii with 103.54 million units, up 29.6% from the end of the same period the previous year.
・Company has adjusted its full-year plan upwards. Net sales is expected to decrease by 6.2% to 1.65 trillion yen (original plan 1.6 trillion yen) compared to the previous year, and operating income to decrease by 12.6% to 560.0 billion yen (original plan 520.0 billion yen). Despite concerns about the impact of semiconductor shortages on hardware production, we expect software download sales to remain strong. The physical sports game “Nintendo Switch Sports” will be released on 29/4. Expectations are high that it will surpass “Wii Sports”, which has sold more than 80 million units in total.
Important Information
This report is prepared and/or distributed by Phillip Securities Research Pte Ltd ("Phillip Securities Research"), which is a holder of a financial adviser’s licence under the Financial Advisers Act, Chapter 110 in Singapore.
By receiving or reading this report, you agree to be bound by the terms and limitations set out below. Any failure to comply with these terms and limitations may constitute a violation of law. This report has been provided to you for personal use only and shall not be reproduced, distributed or published by you in whole or in part, for any purpose. If you have received this report by mistake, please delete or destroy it, and notify the sender immediately.
The information and any analysis, forecasts, projections, expectations and opinions (collectively, the “Research”) contained in this report has been obtained from public sources which Phillip Securities Research believes to be reliable. However, Phillip Securities Research does not make any representation or warranty, express or implied that such information or Research is accurate, complete or appropriate or should be relied upon as such. Any such information or Research contained in this report is subject to change, and Phillip Securities Research shall not have any responsibility to maintain or update the information or Research made available or to supply any corrections, updates or releases in connection therewith.
Any opinions, forecasts, assumptions, estimates, valuations and prices contained in this report are as of the date indicated and are subject to change at any time without prior notice. Past performance of any product referred to in this report is not indicative of future results.
This report does not constitute, and should not be used as a substitute for, tax, legal or investment advice. This report should not be relied upon exclusively or as authoritative, without further being subject to the recipient’s own independent verification and exercise of judgment. The fact that this report has been made available constitutes neither a recommendation to enter into a particular transaction, nor a representation that any product described in this report is suitable or appropriate for the recipient. Recipients should be aware that many of the products, which may be described in this report involve significant risks and may not be suitable for all investors, and that any decision to enter into transactions involving such products should not be made, unless all such risks are understood and an independent determination has been made that such transactions would be appropriate. Any discussion of the risks contained herein with respect to any product should not be considered to be a disclosure of all risks or a complete discussion of such risks.
Nothing in this report shall be construed to be an offer or solicitation for the purchase or sale of any product. Any decision to purchase any product mentioned in this report should take into account existing public information, including any registered prospectus in respect of such product.
Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may provide an array of financial services to a large number of corporations in Singapore and worldwide, including but not limited to commercial / investment banking activities (including sponsorship, financial advisory or underwriting activities), brokerage or securities trading activities. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may have participated in or invested in transactions with the issuer(s) of the securities mentioned in this report, and may have performed services for or solicited business from such issuers. Additionally, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may have provided advice or investment services to such companies and investments or related investments, as may be mentioned in this report.
Phillip Securities Research or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report may, from time to time maintain a long or short position in securities referred to herein, or in related futures or options, purchase or sell, make a market in, or engage in any other transaction involving such securities, and earn brokerage or other compensation in respect of the foregoing. Investments will be denominated in various currencies including US dollars and Euro and thus will be subject to any fluctuation in exchange rates between US dollars and Euro or foreign currencies and the currency of your own jurisdiction. Such fluctuations may have an adverse effect on the value, price or income return of the investment.
To the extent permitted by law, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may at any time engage in any of the above activities as set out above or otherwise hold an interest, whether material or not, in respect of companies and investments or related investments, which may be mentioned in this report. Accordingly, information may be available to Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, which is not reflected in this report, and Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may, to the extent permitted by law, have acted upon or used the information prior to or immediately following its publication. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited its officers, directors, employees or persons involved in the issuance of this report, may have issued other material that is inconsistent with, or reach different conclusions from, the contents of this report.
The information, tools and material presented herein are not directed, intended for distribution to or use by, any person or entity in any jurisdiction or country where such distribution, publication, availability or use would be contrary to the applicable law or regulation or which would subject Phillip Securities Research to any registration or licensing or other requirement, or penalty for contravention of such requirements within such jurisdiction.
This report is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The products mentioned in this report may not be suitable for all investors and a person receiving or reading this report should seek advice from a professional and financial adviser regarding the legal, business, financial, tax and other aspects including the suitability of such products, taking into account the specific investment objectives, financial situation or particular needs of that person, before making a commitment to invest in any of such products.
This report is not intended for distribution, publication to or use by any person in any jurisdiction outside of Singapore or any other jurisdiction as Phillip Securities Research may determine in its absolute discretion.
IMPORTANT DISCLOSURES FOR INCLUDED RESEARCH ANALYSES OR REPORTS OF FOREIGN RESEARCH HOUSE
Where the report contains research analyses or reports from a foreign research house, please note:
