Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>NIdec's full year FY3/23 operating profit declined 41% to Y100b, far short of analyst estimates</li>
<li>However, FY3/24 corporate guidance for Y220b in operating profit is very bullish and assumes a V-shaped recovery in margins</li>
<li>Given the macro outlook and lack of clarity on the restructuring charges, we prefer to remain cautious. </li>
</ul>


NIdec's full year FY3/23 operating profit declined 41% to Y100b, far short of analyst estimates
However, FY3/24 corporate guidance for Y220b in operating profit is very bullish and assumes a V-shaped recovery in margins
Given the macro outlook and lack of clarity on the restructuring charges, we prefer to remain cautious. 


Nidec (6594) | Remain Cautious Despite Bullish Guidance

<ul>
<li>We do not expect any major surprises when Nidec reports FY3/23 earnings on 24 April</li>
<li>However, we believe that there is a significant risk that the company will guide below analyst consensus for FY3/24</li>
<li>We are bearish going into results. After that, there could be an opportunity to turn bullish again on FY3/25 PE of 14x</li>
</ul>


We do not expect any major surprises when Nidec reports FY3/23 earnings on 24 April
However, we believe that there is a significant risk that the company will guide below analyst consensus for FY3/24
We are bearish going into results. After that, there could be an opportunity to turn bullish again on FY3/25 PE of 14x


Thematic (Sector/Industry)

<ul>
<li>OVERSEAS. US Equities down again as Bostic, Kaskari call for higher rates; US10 Yr touches 4%; China Drives Energy and Materials Bid; Awaiting TESLA IR Day (as we write)</li>
<li>JAPAN. NKY Futs flat vs Cash; USDJPY 136.2 flat; Japan caught btw US rate hike Narrative vs China Recovery;  JP firms to hire more; ARM listing: UK loses to US</li>
<li>NUGGET.  As Tesla's Investor day in Focus;  Time to Refocus on their premier US battery supplier Panasonic, and the MASSIVE impact that IRA will have on earnings</li>
</ul>


OVERSEAS. US Equities down again as Bostic, Kaskari call for higher rates; US10 Yr touches 4%; China Drives Energy and Materials Bid; Awaiting TESLA IR Day (as we write)
JAPAN. NKY Futs flat vs Cash; USDJPY 136.2 flat; Japan caught btw US rate hike Narrative vs China Recovery;  JP firms to hire more; ARM listing: UK loses to US
NUGGET.  As Tesla's Investor day in Focus;  Time to Refocus on their premier US battery supplier Panasonic, and the MASSIVE impact that IRA will have on earnings


Good Morning Japan |Down as Fed Hawks Soar; China Drives Resources; Tesla IR Day; NUGGET: Panasonic

<ul>
<li>OVERSEAS.  SPX Gains (barely) after a brutal week; Durable Goods Ex-Transport point to economic resilience;  Beta/Growth&gt; Value as Cyclicals rebound; JPM Quant Sees $50bn Selling if SPX breeches 3940</li>
<li>JAPAN. NKY Futs +0.4% vs Cash; USDJPY 136.2; BOJ Gov Designate Ueda says no change to Easing for now; Japan Post Massive X-Share $9bn sale of Sub shares; Auto Upgrades</li>
<li>NUGGETS NUGGET. Nidec's E-Axle Future may rest with the Europeans, not the Chinese !</li>
</ul>


OVERSEAS.  SPX Gains (barely) after a brutal week; Durable Goods Ex-Transport point to economic resilience;  Beta/Growth&gt; Value as Cyclicals rebound; JPM Quant Sees $50bn Selling if SPX breeches 3940
JAPAN. NKY Futs +0.4% vs Cash; USDJPY 136.2; BOJ Gov Designate Ueda says no change to Easing for now; Japan Post Massive X-Share $9bn sale of Sub shares; Auto Upgrades
NUGGETS NUGGET. Nidec's E-Axle Future may rest with the Europeans, not the Chinese !


Good Morning Japan |SPX Holds After Brutal Week; Solid Durable Goods; Japan Post $9bn X-Share Unwind

<ul>
<li>OVERSEAS.  SPX Caps another winning week - now 4/5 for the year;  Blow out Jobs report but Wages slowing - Goldilocks ? Powell speaks this week as DIS, UBER report.</li>
<li>JAPAN.  NKY Futs +0.4% vs Cash; Yen weakens to 132 handle as Amimiya forerunner for BOJ Governor;  Inbound resurgence reflecting in skyrocketing hotel rates;  Earnings this week - Watch Softbank</li>
<li>DAILY NUGGETS. NO ROCKING OF THE BOAT - BOJ Deputy Amamiya is set to take the mantle of leadership at the BOJ.</li>
</ul>


OVERSEAS.  SPX Caps another winning week - now 4/5 for the year;  Blow out Jobs report but Wages slowing - Goldilocks ? Powell speaks this week as DIS, UBER report.
JAPAN.  NKY Futs +0.4% vs Cash; Yen weakens to 132 handle as Amimiya forerunner for BOJ Governor;  Inbound resurgence reflecting in skyrocketing hotel rates;  Earnings this week - Watch Softbank
DAILY NUGGETS. NO ROCKING OF THE BOAT - BOJ Deputy Amamiya is set to take the mantle of leadership at the BOJ.


Good Morning Japan |4 /5 as SPX Weekly Wins Continue;Blow Out NFP Report ! BoJ's Amamiya "THE ONE" ?

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.

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Nidec Corp (6594 JP)

Nidec (6594) | Remain Cautious Despite Bullish Guidance

Nidec announced a 41% decrease in operating profit to Y100b due to structural reform expenses of Y75b. We are sceptical that the company can...

Mark Chadwick

Nidec (6594) | FY3/24 Guidance Risk

We believe that there is a significant risk that Nidec will guide below analyst consensus for FY3/24. We see a V-shaped recovery only in FY3/25

Mark Chadwick

Good Morning Japan |Down as Fed Hawks Soar; China Drives Resources; Tesla IR Day; NUGGET: Panasonic

US down again as US10 Yield touch 4%; Japan caught btw US rate hike Narrative vs China Recovery; JP firms to hire more; ARM listing: UK loses to...

Mark Chadwick

Good Morning Japan |4 /5 as SPX Weekly Wins Continue;Blow Out NFP Report ! BoJ's Amamiya "THE ONE" ?

NKY Futs +0.4% vs Cash; Yen weakens to 132 handle as Amimiya forerunner for BOJ Governor; Inbound resurgence reflecting in skyrocketing hotel...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Nidec (6594) | Remain Cautious Despite Bullish Guidance

Nidec announced a 41% decrease in operating profit to Y100b due to structural reform expenses of Y75b. We are sceptical that the company can...

Mark Chadwick

Nidec (6594) | FY3/24 Guidance Risk

We believe that there is a significant risk that Nidec will guide below analyst consensus for FY3/24. We see a V-shaped recovery only in FY3/25

Mark Chadwick

Good Morning Japan |Down as Fed Hawks Soar; China Drives Resources; Tesla IR Day; NUGGET: Panasonic

US down again as US10 Yield touch 4%; Japan caught btw US rate hike Narrative vs China Recovery; JP firms to hire more; ARM listing: UK loses to...

Mark Chadwick

Good Morning Japan |SPX Holds After Brutal Week; Solid Durable Goods; Japan Post $9bn X-Share Unwind

US stocks hold on to gains after last week's sell off; In Japan, BOJ Gov Designate Ueda says no change to Easing for now; Japan Post Massive X...

Mark Chadwick

Good Morning Japan |4 /5 as SPX Weekly Wins Continue;Blow Out NFP Report ! BoJ's Amamiya "THE ONE" ?

NKY Futs +0.4% vs Cash; Yen weakens to 132 handle as Amimiya forerunner for BOJ Governor; Inbound resurgence reflecting in skyrocketing hotel...

Mark Chadwick