Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Bike Sales Recovery: Shimano’s bike component sales grew 8% year-on-year in Q3, confirming the market has stabilized after six quarters of decline.2. 3. </li>
<li>China Drives Growth: China’s share of Shimano’s bike sales surged to 31% in 1H24, with management projecting strong growth of 30% YoY in 2H.</li>
<li>Improving Profitability: The bike segment’s operating margin rose to 18.6% in Q3, reflecting a strong recovery from last year's lows, with potential for further improvement.</li>
</ul>


Bike Sales Recovery: Shimano’s bike component sales grew 8% year-on-year in Q3, confirming the market has stabilized after six quarters of decline.2. 3. 
China Drives Growth: China’s share of Shimano’s bike sales surged to 31% in 1H24, with management projecting strong growth of 30% YoY in 2H.
Improving Profitability: The bike segment’s operating margin rose to 18.6% in Q3, reflecting a strong recovery from last year's lows, with potential for further improvement.


Shimano (7309) | Bike Sales Rebound as China Fuels Growth

<ul>
<li>Shimano's Q2 results exceeded expectations with revenue and operating profit significantly beating estimates despite a YoY decline.</li>
<li>Full-Year revenue and operating profit guidance were revised upward, reflecting improved performance and aligning with analyst consensus.</li>
<li>Our estimate for FY25 was significantly raised; despite full valuations, further recovery and potential shareholder returns offer continued bullish outlook.</li>
</ul>


Shimano's Q2 results exceeded expectations with revenue and operating profit significantly beating estimates despite a YoY decline.
Full-Year revenue and operating profit guidance were revised upward, reflecting improved performance and aligning with analyst consensus.
Our estimate for FY25 was significantly raised; despite full valuations, further recovery and potential shareholder returns offer continued bullish outlook.


Shimano (7309) | Shifts Gears with Upbeat Guidance

<ul>
<li>Shimano reported a 40% drop in operating profit for 2Q and revised down full year guidance</li>
<li>Bike sales continue to be weak (-19% YoY) in Q2 and 2H outlook is even worse</li>
<li>We expect the share price to sell-off following the guidance cut. The inventory overhang could take a while to resolve</li>
</ul>


Shimano reported a 40% drop in operating profit for 2Q and revised down full year guidance
Bike sales continue to be weak (-19% YoY) in Q2 and 2H outlook is even worse
We expect the share price to sell-off following the guidance cut. The inventory overhang could take a while to resolve


Shimano (7309) | Profit Recovery Derailed

<ul>
<li>Shimano continues to reel from a slowdown in bike and fishing tackle sales post Covid</li>
<li>1Q operating profit beat the analyst consensus, but the upward revision to full year is minor and falls short of street estimates</li>
<li>The stock has priced in an improving outlook. However, valuations are now looking full compared to historical levels. </li>
</ul>


Shimano continues to reel from a slowdown in bike and fishing tackle sales post Covid
1Q operating profit beat the analyst consensus, but the upward revision to full year is minor and falls short of street estimates
The stock has priced in an improving outlook. However, valuations are now looking full compared to historical levels. 


Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>A disastrous election outcome for the LDP may be the end for PM Ishiba</li>
<li>Expect weak yen beneficiaries to gain, but markets overall to be weak as foreigners de-risk on the political instability</li>
<li>Unwitting TSMC exports to Huawei may put the spotlight back on US export restrictions for allies</li>
</ul>


A disastrous election outcome for the LDP may be the end for PM Ishiba
Expect weak yen beneficiaries to gain, but markets overall to be weak as foreigners de-risk on the political instability
Unwitting TSMC exports to Huawei may put the spotlight back on US export restrictions for allies


Japan Morning Connection: Political Bungling Par Excellence

Japan

SHIMANO INC. manufactures and sells products for bicycling, snowboarding, and fishing.  The Company's products include running gears and brake parts for bicycles and rods, reels, and tackles for fishing.  The Company manufactures golf related products as well.  Shimano mainly exports to Asia, Europe, and the United States.

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Shimano Inc (7309 JP)

Shimano (7309) | Bike Sales Rebound as China Fuels Growth

Shimano's bike sales rebound with 8% growth in Q3, driven by China's surge to 31% share and improved profitability with operating margin at 18.6%.

Mark Chadwick

Shimano (7309) | Shifts Gears with Upbeat Guidance

Shimano's Q2 results surpassed expectations, leading to an upward revision in full-year guidance and a bullish outlook for potential shareholder...

Mark Chadwick

Shimano (7309) | Profit Recovery Derailed

We expect the share price to sell-off following the guidance cut. The inventory overhang could take a while to resolve given weak bike sales in Europe

Mark Chadwick

Shimano (7309) | Stuck in a Low Gear

Shimano continues to reel from a slowdown in bike and fishing tackle sales post Covid. Upward revision to full year operating profit and a small...

Mark Chadwick

Japan Morning Connection: Political Bungling Par Excellence

Potential end for PM Ishiba. Expect weak yen beneficiaries to gain but overall market to be weak due to political instability. Unwitting TSMC...

Andrew Jackson

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Shimano (7309) | Bike Sales Rebound as China Fuels Growth

​Shimano's bike sales rebound with 8% growth in Q3, driven by China's surge to 31% share and improved profitability with operating margin at 18.6%.

Mark Chadwick

Shimano (7309) | Shifts Gears with Upbeat Guidance

​Shimano's Q2 results surpassed expectations, leading to an upward revision in full-year guidance and a bullish outlook for potential shareholder...

Mark Chadwick

Shimano (7309) | Profit Recovery Derailed

We expect the share price to sell-off following the guidance cut. The inventory overhang could take a while to resolve given weak bike sales in Europe

Mark Chadwick

Shimano (7309) | Stuck in a Low Gear

Shimano continues to reel from a slowdown in bike and fishing tackle sales post Covid. Upward revision to full year operating profit and a small...

Mark Chadwick

Japan Morning Connection: Political Bungling Par Excellence

​Potential end for PM Ishiba. Expect weak yen beneficiaries to gain but overall market to be weak due to political instability. Unwitting TSMC...

Andrew Jackson

Shimano's bike sales rebound with 8% growth in Q3, driven by China's surge to 31% share and improved profitability with operating margin at 18.6%.

Shimano's Q2 results surpassed expectations, leading to an upward revision in full-year guidance and a bullish outlook for potential shareholder...

Potential end for PM Ishiba. Expect weak yen beneficiaries to gain but overall market to be weak due to political instability. Unwitting TSMC...