Japan Experts, Extraordinary Performance, Astris Advisory Japan

Astris Advisory Japan

Japan Experts, Extraordinary Performance

Our Corporate Advisory service is designed to give clients access to a wider range of investors. These include Japan specialists as well as global investors. The goal is to help achieve a fair equity valuation.

Equity Bottom-Up

<ul><li>Reforms transforming returns – Although the demand environment remains somewhat mixed, we believe that demand has bottomed for the key product Electronic Discharge Machines.</li><li>Q1-3 FY12/24 results highlighted that definitive progress is being made in terms of raising returns through structural reforms.</li><li>This focus on raising profitability can be seen through upselling activities and improved factory utilization.</li></ul>

Reforms transforming returns – Although the demand environment remains somewhat mixed, we believe that demand has bottomed for the key product Electronic Discharge Machines.Q1-3 FY12/24 results highlighted that definitive progress is being made in terms of raising returns through structural reforms.This focus on raising profitability can be seen through upselling activities and improved factory utilization.

Sodick (6143 JP) - Key Metrics Point to Recovery and Upside

<ul><li>Q1-2FY12/24 results were a positive surprise in our view.</li><li>Quarterly Q2 FY12/24 OPM of 4% returned to positive territory after four consecutive quarters of losses, driven by a combination of price hikes, revision to the product line-up to improve sales mix, restructuring measures, and sales volume expansion with a marked jump in China demand for electronic discharge machines.</li><li>We believe Sodick has begun to transform to become more resilient and operationally efficient. </li></ul>

Q1-2FY12/24 results were a positive surprise in our view.Quarterly Q2 FY12/24 OPM of 4% returned to positive territory after four consecutive quarters of losses, driven by a combination of price hikes, revision to the product line-up to improve sales mix, restructuring measures, and sales volume expansion with a marked jump in China demand for electronic discharge machines.We believe Sodick has begun to transform to become more resilient and operationally efficient. 

Sodick (6143) - An Upbeat Result Reflecting Transformational Efforts

<ul><li>An uplift in China orders – Q1 FY12/24 results saw a continued decline in sales by 7.4% YoY and 9.3% QoQ.</li><li>However, the core Machine Tools segment saw flat sales QoQ, and order visibility improved with China orders rising by 39.4% QoQ albeit from a low base.</li><li>Cost reduction efforts have commenced and are set to accelerate into Q2 FY12/24 which should improve the scope for profitability, although ultimately this will be sales volume dependent. </li></ul>

An uplift in China orders – Q1 FY12/24 results saw a continued decline in sales by 7.4% YoY and 9.3% QoQ.However, the core Machine Tools segment saw flat sales QoQ, and order visibility improved with China orders rising by 39.4% QoQ albeit from a low base.Cost reduction efforts have commenced and are set to accelerate into Q2 FY12/24 which should improve the scope for profitability, although ultimately this will be sales volume dependent. 

Sodick (6143 JP) - Incremental Progress Is Being Made

<ul><li>Q1-4 FY12/23 results were weaker than our estimates with the company revising down FY guidance.</li><li>Orders for the mainstay electric discharge machines fell 24% YoY in Q4 FY12/23 with China demand remaining sluggish.</li><li>However, there are positive indications that the company aims to transform its business model by conducting cost reductions, streamlining the balance sheet, and bringing greater focus to its business strategy. </li></ul>

Q1-4 FY12/23 results were weaker than our estimates with the company revising down FY guidance.Orders for the mainstay electric discharge machines fell 24% YoY in Q4 FY12/23 with China demand remaining sluggish.However, there are positive indications that the company aims to transform its business model by conducting cost reductions, streamlining the balance sheet, and bringing greater focus to its business strategy. 

Sodick (6143) - Aiming to Revitalize the Business Model

<ul><li>Major change of gameplan – Q1-3 FY12/2023 results were weaker than expected with the company revising down FY guidance, and withdrawing both current medium and long-term plans given highly challenging business conditions.</li><li>An overview plan of structural reforms has been unveiled, focusing on becoming a more resilient and profitable business, realigning product lines, and rebuilding sales and production setups.</li><li>Although an ambitious initiative with a wide scope, we believe that this will have a positive impact of significantly accelerating transformation initiatives, and transitioning the company to a more optimal business model.</li></ul>

Major change of gameplan – Q1-3 FY12/2023 results were weaker than expected with the company revising down FY guidance, and withdrawing both current medium and long-term plans given highly challenging business conditions.An overview plan of structural reforms has been unveiled, focusing on becoming a more resilient and profitable business, realigning product lines, and rebuilding sales and production setups.Although an ambitious initiative with a wide scope, we believe that this will have a positive impact of significantly accelerating transformation initiatives, and transitioning the company to a more optimal business model.

Sodick (6143 JP) - Revisiting the Strategy and Accelerating Structural Reforms

Japan

Sodick Co., Ltd. develops, manufactures, and sells electric machines and equipment.  The Company's product line includes computerized numerical control electrical discharge machine (EDM), super high precision wire cut EDM, CAD/CAM system for mold design and production, injection molding machine, and high speed manual drilling machine.

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Sodick Co Ltd (6143 JP)

Sodick (6143 JP) - Key Metrics Point to Recovery and Upside

Although the demand environment remains somewhat mixed, we believe that demand has bottomed for the key product Electronic Discharge Machines.

Astris Advisory Japan

Sodick (6143) - An Upbeat Result Reflecting Transformational Efforts

Q1-2FY12/24 results were a positive surprise in our view. Quarterly Q2 FY12/24 OPM of 4% returned to positive territory after four consecutive...

Astris Advisory Japan

Sodick (6143 JP) - Incremental Progress Is Being Made

Sodick continues to execute its business transformation efforts, and we believe with a demand recovery scenario the company will be better...

Astris Advisory Japan

Sodick (6143) - Aiming to Revitalize the Business Model

Q1-4 FY12/23 results were weaker than our estimates with the company revising down FY guidance. Orders for the mainstay electric discharge machines...

Astris Advisory Japan

Sodick (6143 JP) - Revisiting the Strategy and Accelerating Structural Reforms

Q1-3 FY12/2023 results were weaker than expected with the company revising down FY guidance, and withdrawing both current medium and long-term...

Astris Advisory Japan

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