HONG KONG (Reuters Breakingviews) - The passing of Lotte’s patriarch sets the stage for a turnaround. Battered shares in the listed units of the South Korean retail-to-chemical conglomerate rallied on Monday after Shin Kyuk-ho died at 98. That may reflect investors' hopes that his younger son, group chairman Shin Dong-bin, will accelerate a restructuring. A respite from political, legal and family spats gives him room to manoeuvre, and less excuse for delay.
HONG KONG (Reuters Breakingviews) - Chinese talent will help a top soccer team score multiple goals in 2020. Super-clubs like Manchester United need to tap new income streams as growth slows in sales of European broadcast rights, a traditional cash cow. Signing a player from the People’s Republic, where as many as 300 million people watch the sport, could be one way to plump up the top line.
HONG KONG (Reuters Breakingviews) - Tokyo will top the sporting podium in 2020. Host cities for the summer Olympics are often saddled with large debts, and cases of mismanagement have stretched from Montreal to Rio de Janeiro. Yet Japan is setting new standards in sponsorship and sustainability. Add on a boost from short-term stimulus, and the Land of the Rising Sun is set to bring home host gold.
HONG KONG (Reuters Breakingviews) - For most investors, allocating funds toward companies that adopt strong environmental, social and governance practices is a relatively abstract matter of box-ticking. Not so for the employee-owners of New Belgium, a craft brewery in Colorado. The decision on whether to sell their shares to Japanese brewer Kirin Holdings is a microcosmic test of ESG bona fides.
HONG KONG (Reuters Breakingviews) - It promises all the highs and lows of a real gold rush. Canaan, a Chinese company and the world’s second biggest maker of hardware used to mine bitcoin, has filed for an initial public offering in New York. It’s looking to raise $400 million, according to Reuters, after aborting two attempts to list elsewhere. But its financials and prospects look as volatile as the cryptocurrency itself.
HONG KONG (Reuters Breakingviews) - Hong Kong’s economic travails are an unwelcome guest in the city’s fintech party. Enthusiasm for online-only banks was palpable at the Fintech Week conference. Yet months of political unrest have hit small businesses, and the added risks may delay local launches by the likes of Standard Chartered and Tencent.
HONG KONG (Reuters Breakingviews) - Super Mario is running circles around a Japanese rival. The iconic plumber’s mobile racing hit has helped power up shares of Nintendo by almost 30% this year. Its richer valuation also intensifies the pressure on Sony, which is facing calls to reduce its sprawl. Nintendo has been on an impressive winning streak. Its recently released “Mario Kart Tour” racked up more than 90 million downloads in its first week, industry tracker Sensor Tower estimates. Moreover, a new and smaller version of the popular Switch console, as well as a tie-up with Chinese titan Tencent to enter the world's largest gaming market, should give a boost to Nintendo’s quarterly results due Thursday. Operating profit in the three months to September is expected to rocket up 65% from a year earlier, to 51 billion yen, or $470 million, according to the average of analyst estimates gathered by Refinitiv. That puts $75 billion Sony in danger of falling further behind its nimbler and more focused rival. Nintendo trades at 18 times anticipated earnings for the next 12 months. Sony, by comparison fetches only about 14 times, weighed down by its lower-valued TV, smartphone and camera businesses, as well as a conglomerate discount. Sony boss Kenichiro Yoshida has been reluctant to break up the company. Last month, he shot down a proposal from Dan Loeb’s pushy hedge fund, Third Point, to spin off the chips business and offload its financial unit. Sony called semiconductors a “crucial growth driver” and opted to maintain the structural status quo. In a letter to its investors last week, Third Point said it intends to persist at the Japanese company, “guided by our view that Sony remains one of the most undervalued large capitalization stocks around the world”. The case for a standalone Sony entertainment business, led by its successful PlayStation consoles, is growing. A combined video-games, music and movies enterprise alone could be worth $70 billion, Nomura analysts reckon, based on 2021 forecast numbers. Add in Sony’s other businesses and stakes, and the company currently trades at more than a 25% discount to the estimated sum of its parts. The idea only gets additional fuel from a turbo-charged Nintendo.
HONG KONG (Reuters Breakingviews) - Kirin’s new makeover is only half pretty. The $20 billion Japanese brewer is buying 30% of Tokyo-listed cosmetics and kale-juice maker Fancl for 129 billion yen ($1.2 billion). Moving away from booze and an ageing market makes sense; rivals are doing it too. But paying a multiple of earnings more than twice its own for a minority stake is not a wholesome look.
HONG KONG (Reuters Breakingviews) - If Western economies are at full employment, then why are people still hurting? That is the conundrum David Blanchflower lays out - and endeavours to answer - in his new book. Echoing John Maynard Keynes, the British-American economist contends that the West has still not emerged from the long, dragging “semi-slump” that followed the 2008 financial crisis.
HONG KONG (Reuters Breakingviews) - The global $1 billion competitive video-game market will reach a new level in 2019. Viewership for e-sports tournaments already surpasses that of the Major League Baseball in the United States. China’s gaming titan Tencent will emerge victorious in the People’s Republic – a key e-sports battleground of some 450 million gamers. This will propel the company’s overseas expansion.