Next week's 5 stocks

(4410) Halima Chemicals Group

From Shikiho: Industry: Chemicals.

【Features】Pioneer in rosin raw material chemicals. High market shares in paper chemicals and tall oil. Rotor Co. is Rosin products’ affiliate in the United States.

【Profit decline narrowed】Domestic resins and European/US adhesives raw materials costs exceeded expectations in the first half. Paper chemicals also improving with a Southeast Asia–US focus. The company’s operating profit increase forecast assumes improved profitability in the second half. In the first half, equity-method affiliates benefited from higher raw material prices. 75th anniversary gifts.

【M&A】This term’s consolidated soldering materials business bought for about 5 billion yen. If the same amount, we will continue to consider opportunistically. Planning a second mega solar power plant near the Akashi Manufacturing Plant to offset global warming gas.

Announcement on August 1, 2022. For the fiscal year ending March 2023, the forecast is operating profit of 2.70 billion yen, down 16.9% year-on-year, ordinary profit of 3.40 billion yen, down 1.0%, forecasting declines in both revenue and profit.

From the peak before the COVID era of 1,366 yen on October 30, 2019, the low of 737 yen (closing price 787 yen) on March 13, 2020, led to a rapid rebound to 1,248 yen by March 27. Subsequently fell to 878 yen on May 7, then rebounded to 1,089 yen on June 17, fluctuated around until 1,176 yen on September 28. After this peak, it dropped to 931 yen on November 6 and, with 1,150 yen on December 15 forming a second top, entered a downtrend (B). In this downtrend (B), in 2022, it hit two bottoms at 756 yen on April 27 and 746 yen on July 1, then rose to 955 yen on September 14 and 841 yen on September 28, trading in a range.

Buy Point

① 850–870 yen

② 820–840 yen

Take Profit

In case ①: 930–980 yen

If it drops to ②: 910–950 yen

Stop Loss

Not at present

(7467) Hagiwara Electric Holdings

From Shikiho: Industry: Wholesale.

【Features】Nagoya-based distributor of semiconductors and electronics components and devices. Automotive sector accounts for about 90%. FA equipment manufacturing division co-managed.

【Slight Pause】Core Device business expands with embedded software for the semiconductor industry. Solutions business grows for IT systems. But industrial machinery for automotive sector will decline in the second half due to reduced production by OEMs. High logistics costs hurt, but currency depreciation effects provide some offset; operating profit is expected to be flat.

【Business关系】With the transfer of trade channels for customers, seize opportunities and acquire new clients. Strengthen sales to conveyor equipment manufacturers for automotive-related devices.

Announcement on August 10, 2022. For the fiscal year ending March 2023, forecast is operating profit down 1.3% to 4.30 billion yen, ordinary profit down 2.0% to 4.25 billion yen, expecting declines in both revenue and profit.

From the COVID-era high of 2,822 yen on January 6, 2020, the price corrected to 1,836 yen on March 13 and 1,857 yen on August 3 forming a double bottom and then rose, reaching an intra-year high of 2,830 yen on March 19, 2021. This marked a shift to a downtrend (A). Within this downtrend (A), 1,903 yen on January 27, 2022, 1,847 yen on May 12, and 1,893 yen on June 20 formed triple bottoms before rebounding. It surged to 2,317 yen on August 15 (closing price) and then moved up in steps to a peak of 2,365 yen on August 31, then turned to a selling signal at 2,281 yen on September 2, fell to 2,069 yen on October 13, and then consolidated with a short-term buying signal at 2,189 yen on October 26.

Buy Point

① 2,100–2,160 yen

② 2,030–2,070 yen

Take Profit

① 2,300–2,350 yen

Stop Loss

Not at present

(5471) Daido Special Steel

From Shikiho: Industry: Steel.

【Features】Largest in the world as a special steel specialist. Main supplier for automobiles including Nissan, Honda. Expanding high-grade steel. Closely allied with Nippon Steel & Sumitomo Metal.

【Flat Trend】Automotive production cuts may be prolonged, but demand from semiconductors and industrial machinery grows. While price hikes progressed, raw material scrap collapsed, improving gross margin in the first half. In the second half, even with price adjustments and higher fuel/power costs, operating profit remains flat.

【Low-Carbon】Issued a 10 billion yen transition bond in September to fund decarbonization investments in manufacturing processes. Established a joint research base with Tohoku University on high-functional soft magnetic materials to meet rising demand for electric vehicles.

Announcement on October 28, 2022. For the fiscal year ending March 2023, forecast is operating profit down 8.1% to 34.0 billion yen, ordinary profit down 10.7% to 35.0 billion yen, declines in both revenue and profit.

Amid COVID market plunge, bottomed at 2,810 yen on March 17, 2020, then after a sideways period formed a strong uptrend with a second bottom of 2,940 yen on July 31, 2020, reaching 6,330 yen high on May 11, 2021, then entered a downtrend (A) → (B). In this downtrend, prices hit 3,375 yen on March 9, 2022 and 3,360 yen on April 27, forming two bottoms, then rose above (B) on June 8 to 3,850 yen, fell to 3,355 yen on June 20, rose to 4,030 yen by August 9, then corrected to 3,495 yen on October 3, forming a range and seeking a floor. Today saw a large rise. Waiting for a pullback.

Buy Point

① 3,500–3,600 yen

② 3,350–3,500 yen

Take Profit

Both 3,900–4,200 yen

Stop Loss

If the closing price falls below 3,340 yen, implement a stop loss for now

(3877) Nakagaki Pulp Industry

From Shikiho: Industry: Pulp and paper.

【Features】A paper manufacturer headquartered in Toyama, subsidiary of Oji HD. Manufactures newspaper, printing and packaging papers; power generation is a source of earnings.

【Earnings Decline】Newsprint and printing papers fall in volume; coated paper increases slightly due to substitution for plastics. Power generation saw a rebound. Rising raw material costs since summer press hard, but additional price increases offset; however, profit from non-operating foreign exchange gains.

【Reorganization】From August, prices for printing and information papers rose by over 15%. Testing sale of materials using cellulose nanofibers to protect against pathogens and plants.

Announcement on August 5, 2022. For the fiscal year ending March 2023, forecast is operating profit down 36.2% to 1.50 billion yen, ordinary profit down 44.8% to 1.70 billion yen, declines in both revenue and profit.

From the COVID market decline, bottomed at 1,023 yen on March 13, 2020, then rebound, peaked at 1,588 yen on June 30, then sideways, forming a double top at 1,571 yen on August 18, and a high of 1,535 yen on October 5, turning to a short-term downtrend (A) thereafter. Within this downtrend, hit 1,903 yen on January 27, 2022, 1,847 yen on May 12, 2022, and 1,893 yen on June 20 to break upward, then rallied to 2,317 yen on August 15 before peaking at 2,365 yen on August 31. After a pullback to 2,281 yen on September 2, fell to 2,069 yen on October 13 and consolidated in a range, turning to a short-term “buy” at 2,189 yen on October 26. It then formed a two-point bottom around 1,100–1,121 yen and began to rise again.

Buy Point

890–920 yen

Take Profit

980–1,020 yen

Stop Loss

If the closing price falls below 888 yen, trigger a stop loss

(4031) Katakura Co-op Agriculture

From Shikiho: Industry: Chemicals.

【Features】Originated from Katakura Industries’ fertilizer business. Red Sun R. M. Group. Merged with Coop Chemical, a major fertilizer and chemical products company; fostering chemical products.

【Favorable Turn】Cosmetics ingredients and inorganic materials see a decrease in volume. Fertilizers see a reactionary drop from June price hikes and cost inflation for raw fuels, but government subsidies and price increases cope. Rental income partially recovers. Operating profit improves; no more gains from asset sales and dividend cuts.

【Sustainability】Promoting paste-two-stage fertilization using compost-containing complex fertilizers without relying on plastic-coated fertilizers. Continuing tests with Chinese microbial materials. Finalizing Shibuya Station redevelopment in the second half.

Announcement on August 15, 2022. For the fiscal year ending March 2023, forecast is operating profit up 24.7% to 1.40 billion yen, ordinary profit up 16.0% to 1.40 billion yen, signaling an increase in both revenue and profit.

From COVID market declines, rising trend began at 905 yen on March 13, 2020, forming an uptrend (A) and an uptrend (B) connecting 1,180 yen on January 4, 2021. In this uptrend (B), the high of 1,154 yen on March 25, 2020 was a peak, with 1,050 yen on March 26 as a trough, breaking upward to 1,302 yen on September 30, rising to 1,180 yen on January 4, 2021, and reaching 1,408 yen on March 15. This appears to be a near-term peak, entering a consolidation, dropping to 1,100 yen on December 27 and rising to 1,580 yen on June 2, 2022, before retreating to 1,258 yen on June 20 and rebounding to 1,350 yen on June 29, then falling to 1,171 yen on August 4 and rebounding to 1,343 yen on August 30, forming a double top and dropping to 1,121 yen on October 13. The current near-term low is 1,100–1,121 yen with a rebound.

Buy Point

① 1,150–1,180 yen

② 1,120–1,150 yen

Take Profit

Both 1,300–1,350 yen

Stop Loss

If the closing price falls to 1,100 yen, trigger a stop loss