Tokyo Morning Meeting Comment - Mizuho

....20 August 2012Tokyo Morning Meeting CommentCompany NoteShare Price: ¥1,511 (17 Aug)Senior Analyst:Hiroshi SajiIto En (2593)Rating: NeutralPrice objective: ¥1,370Further investment in vending machine operator; focus on Otsuka sales tie-upIto En on 17 August announced that it was increasing its stake in mid-tier vending machineoperator Neos to 46.0% by acquiring 30.0% of the company’s shares from Shintoa, a Kanematsusubsidiary. Ito En aims to improve efficiency by expanding joint procurement and promotingjoint strategies in vending machine operations. The company did not disclose the cost of theacquisition, but it appears to be around ¥2.0b, as Kanematsu on the same day announced thatit expected to book extraordinary gains of ¥2.2b in FY3/13 (Neos was capitalized at ¥80m inFY12/11). Management announced that it expected to make Neos a subsidiary following a thirdpartyallocation of new Neos shares within the year.For reference, please see our daily flash of 20 AugustPrice Objective ChangeShare Price: ¥172 (16 Aug)Analyst:Norimasa ShinyaCosmo Oil (5007)Rating: UnderperformPrice objective: ¥160 ¥140Expecting earnings to remain weak due to uncertain Chiba refinery restartWe are lowering our earnings forecasts for Cosmo Oil, due mainly to a delay in restarting theChiba refinery. Although we expect the company to post a profit at the recurring level in FY3/13thanks to a contribution from oil exploration and production, we expect petroleum products to incurreal losses (excluding inventory valuation gains/losses) for two consecutive years on a prolongedshutdown of the Chiba refinery. The restart time frame for the Chiba refinery is highly uncertain,and we reiterate our Underperform rating.For reference, please see our daily flash of 17 AugustPrice Objective ChangeShare Price: ¥1,041 (16 Aug)Senior Analyst:Hiroshi MatsudaNGK Insulators (5333)Rating: BuyPrice objective: ¥1,100 ¥1,200Reconfirmation that earnings are recovering briskly led by ceramics productsWe continue to expect profit growth at NGK Insulators to recover to double digits in FY3/13 andbeyond as governments around the world impose tougher emission regulations and the overseasmarket for insulators picks up. We assume that the company will restart the production of NASbatteries in 2H FY3/13.For reference, please see our daily flash of 17 AugustForecast RevisionsShare Price: ¥415 (16 Aug)Senior Analyst:Hiroshi MatsudaNichias (5393)Rating: BuyPrice objective: ¥550Expecting slight OP growth in FY3/13 even when considering risk of 2HslowdownsWe believe Nichias will be able to achieve slight YoY OP growth in FY3/13, even when factoringin the risk of a slowdown in 2H in the advanced products and automotive parts segments. Weexpect the company to pay out a per-share annual dividend of ¥14 in FY3/13, ¥2 higher thanthe company’s forecast.For reference, please see our daily flash of 17 AugustPlease refer to page 3 - 4 of this report for important disclosure and analyst certification information.Mizuho Securities Co., Ltd.

.20 August 2012Forecast RevisionsShare Price: ¥2,856 (16 Aug)Senior Analyst:Hidekatsu WatanabeForecast RevisionsShare Price: ¥2,740 (17 Aug)Senior Analyst:Toshio TakahashiHamamatsu Photonics (6965)Rating: NeutralPrice objective: ¥2,800No strong recovery, little slowdown risk; expect shares to stay at current levelWe are making slight adjustments to our forecasts for Hamamatsu Photonics, but our views onthe company remain more or less unchanged. While the earnings outlook remains unclear, weexpect the shares to trend around the current level in the near term..Don Quijote (7532)Rating: BuyPrice objective: ¥4,100For reference, please see our daily flash of 17 AugustStrong earnings in FY6/12, mainly in core business; focusing on more openingsof New Mega Don Quijote formatDon Quijote announced FY6/12 results on 17 August. OP rose 15.7% YoY to a level slightlyexceeding our forecast. We note that the company upwardly revised its earnings targets on 15August. We are making no substantial changes to our earnings estimates, and remain focusedon the potential for an improvement in profit margins and an expansion in earnings as a resultof the company accelerating store openings in the New Mega Don Quijote format. We reiterateour Buy rating.For reference, please see our daily flash of 20 AugustTokyo Morning Meeting Comment 2Mizuho Securities Co., Ltd.

20 August 2012| Companies Mentioned in this ReportCode Company Name Rating Price 8/172593 Ito En Neutral ¥1,5115007 Cosmo Oil Underperform ¥1725333 NGK Insulators Buy ¥1,0425393 Nichias Buy ¥4126965 Hamamatsu Photonics Neutral ¥2,8477532 Don Quijote Buy ¥2,740Note: NR = Not RatedSource: Mizuho Securities Equity ResearchImportant Disclosure Information■■Within the past 12 months, Mizuho Securities Co., Ltd. and / or its affiliate(s) managed or co-managed a public offering of securities of Ito En.Mizuho Securities Co., Ltd. and / or its affiliate(s) received compensation in the past 12 months, or expects to receive or intends toseek compensation in the next 3 months for investment banking services from: Ito En, Cosmo Oil, NGK Insulators, Nichias, HamamatsuPhotonics, Don Quijote.Tokyo Morning Meeting Comment 3Mizuho Securities Co., Ltd.

Tokyo Morning Meeting Comment20 August 2012Mizuho Securities RatingsMizuho Securities investment ratings are based on the following definitions.Ratings and price objectives are based on returns expected over the next 6 -12 months.Buy: Stocks for which our price objective, as of the date it is set, exceeds the share price by 10% or more and which are not classifiedas "Underperform" under the guidelines for distribution of ratings detailed below.Neutral: Stocks for which our price objective, as of the date it is set, is within 10% of the share price (either above or below) and which arenot classified as "Underperform" under the guidelines for distribution of ratings detailed below.Underperform : Stocks for which our price objective, as of the date it is set, falls below the share price by 10% or more or stocks classified as"Underperform" under the guidelines for distribution of ratings detailed below.RS: Rating Suspended - rating and price objective temporarily suspended.NR: No rating - not covered, and therefore not assigned a rating.Guidelines for distribution of ratings: When fewer than 10% of the companies within a defined coverage universe (composed of companies withcommon attributes, covered by one or more analysts) have "Underperform" ratings, "Underperform" ratings are applied to 10% of the companies,rounded to the nearest whole number, beginning with those with the lowest implied upside. (These relative distribution guidelines apply only whenthe coverage universe is composed of six or more companies. There may be periods when the number of companies with “Underperform” ratingstemporarily does not meet these guidelines.)Information can be found on the Mizuho Securities Equity Research website (MizuhoResearchWEB) under “Disclosure Data” as to the proportion of all research ratings published duringthe last quarter that were in rating categories “Buy”, “Neutral”, and “Underperform”, and information on the proportion of companies within each category to which Mizuho Securities providedinvestment banking services during the last 12 months.Analyst CertificationThe research analyst(s) listed on the cover page of this report certifies(y) that the views expressed in this research report accurately reflect analyst's(s') personal views about the subjectsecurity(ies) and issuer(s) and that no part of his/her/their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or views expressed in thisresearch report.DisclaimerThis report has been prepared by Mizuho Securities Co., Ltd. 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