Tokyo Market Summary: Nikkei Average Rebounds Japan Recognizes Importance of Investing in “Sovereign AI Capabilities” - NVIDIA CEO

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Undervalued stocks, the next issue is diversification review
Over the past 20 years, Japanese companies have greatly increased their performance, but profitability is still low compared to Western companies. In terms of return on equity (ROE) of major companies, Japan remains at 9% compared to 19% in the US and 15% in Europe (factset, 2023). One reason is the low profitability of diversified enterprises.

Japan recognizes the importance of investing in “sovereign AI capabilities” - NVIDIA CEO
Major US semiconductor company $NVIDIA(NVDA.US)$Chief Executive Officer Jenson Huang (CEO) of on the 1st expressed the view that demand for the company's products will increase as countries around the world aim to build and operate artificial intelligence (AI) infrastructure in their own countries. In an interview with Bloomberg Television, Juan said that countries such as India, Japan, France, and Canada are talking about the importance of investing in “sovereign AI capabilities.”

Toyota shortens factory operation by 30 minutes a day and secures time for inspections, training, etc.
$Toyota Motor(7203.JP)$For domestic finished car factories, operations to shorten the upper limit of operating hours by an average of about 30 minutes per day began in February. High levels of production are continuing along with the recovery of semiconductor shortages, easing the burden on the site and making it possible to secure time for inspections, training, etc.

DOCOMO's communication quality improvement “90% or more completed” package blockage resolved
NTT DOCOMO revealed on the 2nd that it had completed efforts on centralized measures related to improving the quality of data communication with 90% or more. Since 2023, DOCOMO has had a problem called a “package jam,” where the speed of data communication declines mainly in urban areas such as the 23 wards of Tokyo, Osaka, and Nagoya. There are still places inside buildings where it is difficult to connect, etc., and they are in a hurry to respond.

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Denso lowers earnings forecasts due to fuel pump recalls - fluctuating trust
Denso recorded expenses associated with recalls (free repairs/collections) that expand due to fuel pump defects manufactured by the company, and lowered its operating profit forecast for the current fiscal year (fiscal year ending 2024/3) by 21% from the previous plan. According to the company's announcement on the 2nd, the operating profit plan for the current fiscal year was revised downward from the previous 630 billion yen to 495 billion yen, an increase of 16% from the previous fiscal year. It is far below the market forecast of 619.9 billion yen.

Aisin's net profit falls by 50 billion yen due to US recall, quality costs
$Toyota Motor(7203.JP)$Of the system $Aisin(7259.JP)$On the 2nd, it was announced that the consolidated net profit (international accounting standards) forecast for the fiscal year ending 2024/3 is likely to be 90 billion yen, 2.4 times the previous fiscal year. It was 50 billion yen lower than the previous forecast. Since Toyota reported a recall (collection/free repair) of approximately 1 million units in the US with sensors for airbags manufactured by a US subsidiary, quality-related expenses were recorded at 63 billion yen in operating profit and loss for the fiscal year ending 23/10-12.

H2O Retailing - sharp rise in total sales of all stores in January increased 16%
$H2O Retailing(8242.JP)$has skyrocketed. The company announced on the 1st that total sales for all stores in the department store business in January were up 16.2% from the same month last year in preliminary figures. It was the beginning of the year without various restrictions due to the COVID-19 pandemic, and the first sales were generally strong at each store. Above all, the Hanshin Umeda Main Store, where customer awareness of rebuilding was raised due to large-scale sales related to the Hanshin Tigers the previous year, and Kobe Hankyu, where the entire building was renovated, etc., increased by 2 digits.

Hulic invests in housing for the elderly with an overseas investment quota of 50 billion yen
$Hulic(3003.JP)$On the 2nd, it was announced that an investment quota of up to 50 billion yen has been set for overseas businesses. First, we will expand investment in housing development projects for the elderly in the United States. Until now, we have expanded our business centered on domestic offices, etc., but we are preparing for a contraction in the real estate market due to population decline. Grow overseas business to a scale of 10 billion yen on an ordinary profit basis.

Tencent and Nexon stock prices soar - China approves long-awaited mobile games
With Tencent Holdings (Tencent), a major Chinese internet company $NEXON(3659.JP)$The stock price skyrocketed on the 2nd. The Chinese authorities have approved “Dungeon Yoru: Origins” in the mobile title “Arad Senki,” which had not been approved by the Chinese authorities for several years.