Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In early February 2022, Silchester International Investors (according to its website) sent letters to four low-ROE-earning Japanese regional banks proposing a new dividend policy.</li>
<li>The management and boards of each bank rejected the policy proposal though two of the four had upped their proposed dividend or changed policy prior, and two upped it afterwards.</li>
<li>While <a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto (8369 JP)</a> is the biggie, <a href="https://www.smartkarma.com/entities/shiga-bank-ltd" target="_blank" data-smartkarma-citation="entities:18665:1" rel="noopener">Shiga Bank (8366 JP)</a> is another one with significant equity holdings. </li>
</ul>


In early February 2022, Silchester International Investors (according to its website) sent letters to four low-ROE-earning Japanese regional banks proposing a new dividend policy.
The management and boards of each bank rejected the policy proposal though two of the four had upped their proposed dividend or changed policy prior, and two upped it afterwards.
While Bank of Kyoto (8369 JP) is the biggie, Shiga Bank (8366 JP) is another one with significant equity holdings. 


JAPAN ACTIVISM:  Silchester Goes After Shiga Bank

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>Founder and Chairman Nagamori has reappointed himself CEO, obscuring the reasons why Nidec's share price has declined.</li>
<li>Quarterly earnings should recover, but strategic investments look three years into the future while materials costs rise and the economic situation deteriorates.</li>
<li>Rising interest rates and compression of valuation multiples are likely to dampen the share price. Look to the long term without expecting a return to the glory days. </li>
</ul>


Founder and Chairman Nagamori has reappointed himself CEO, obscuring the reasons why Nidec's share price has declined.
Quarterly earnings should recover, but strategic investments look three years into the future while materials costs rise and the economic situation deteriorates.
Rising interest rates and compression of valuation multiples are likely to dampen the share price. Look to the long term without expecting a return to the glory days. 


Japan Specialist

Mark Chadwick

<ul>
<li>Nidec is the best stock in Japan to play the rising adoption of EVs</li>
<li>The company is already dominating the largest E-Axle market in the world and will benefit from growing economies of scale</li>
<li>We think the company can hit its mid-term targets and see over 30% upside for the stock</li>
</ul>


Nidec is the best stock in Japan to play the rising adoption of EVs
The company is already dominating the largest E-Axle market in the world and will benefit from growing economies of scale
We think the company can hit its mid-term targets and see over 30% upside for the stock


Nidec (6594 JP) | The Second Coming of Nagamori

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

<ul>
<li>Nidec earnings were worse than we feared as 4Q OP was just ¥36.9bn below even our ¥40bn estimate and far below consensus at ¥48.5bn. </li>
<li>This was despite a 4.9% top line beat and there were some signs of kitchen sinking in our view. </li>
<li>Nevertheless, guidance for ¥210bn in OP next year, while below consensus, still feels aggressive in our view.</li>
</ul>


Nidec earnings were worse than we feared as 4Q OP was just ¥36.9bn below even our ¥40bn estimate and far below consensus at ¥48.5bn. 
This was despite a 4.9% top line beat and there were some signs of kitchen sinking in our view. 
Nevertheless, guidance for ¥210bn in OP next year, while below consensus, still feels aggressive in our view.


Nidec – Small Precision Motors and Automotive Concerning

<ul>
<li>Consensus expectations for Nidec have drifted towards more reasonable levels in the last few months and a guidance miss is now baked in. </li>
<li>However, our data analysis suggests that while revenue may exceed consensus expectations OP could miss. </li>
<li>Guidance on the other hand could be strong, but with multiples elevated that does not mean there is upside risk here.</li>
</ul>


Consensus expectations for Nidec have drifted towards more reasonable levels in the last few months and a guidance miss is now baked in. 
However, our data analysis suggests that while revenue may exceed consensus expectations OP could miss. 
Guidance on the other hand could be strong, but with multiples elevated that does not mean there is upside risk here.


Nidec – Weakness Should Be Understood but Downside Risk at Earnings Remains

Japan

NIDEC CORPORATION is the world's leading manufacturer of small precision motors mainly used in HDD and optical disk drives. The company has extended its focus to the home appliance and automotive markets. NIDEC is active in M&A and its subsidiaries include the world's leading manufacturers of LCD panel handling robots and camera shutters.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Nidec Corp (6594 JP)

JAPAN ACTIVISM: Silchester Goes After Shiga Bank

Silchester Int'l Investors has written letters to four regional banks where it holds large stakes. The goal appears to be to urge public debate of...

Travis Lundy

Nidec (6594 JP): Structural Problems

Chairman Nagamori has demoted his CEO and taken back control, underlining the Key Man Problem and obscuring structural difficulties. Growth should...

Scott Foster

Nidec (6594 JP) | The Second Coming of Nagamori

Nidec is the best stock in Japan to play the rising adoption of EVs. The company already dominates the largest market in the world for e-Axles. We...

Mark Chadwick

Nidec – Small Precision Motors and Automotive Concerning

Nidec earnings were worse than we feared as 4Q OP was just ¥36.9bn below even our ¥40bn estimate and below consensus at ¥48.5bn. Guidance for...

Mio Kato

Nidec – Weakness Should Be Understood but Downside Risk at Earnings Remains

Our data analysis suggests that Nidec revenue may exceed consensus expectations while OP could miss. Guidance on the other hand could be strong,...

Mio Kato

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)