Director, Pearl Hill Advisors

Nicholas Tanner

Director

Pearl Hill Advisors

Equity Bottom-Up

<p>Watches made Y14.4bn out of last year’s total Y21.5bn operating profit. Margins came in at 8.9%. This was a poor year, Y20.5bn (out of a total of Y28.5bn) was initially expected. However after 1Q this has been revised down to Y15bn. The problem first and foremost is with the movement business. This is about 20% of watch sales with OPM of over 20% (level undisclosed). They had expected shipments to be flat after a flat year to 3/16 movement sales fell 15%. High level of inventory in the system…</p>

Watches made Y14.4bn out of last year’s total Y21.5bn operating profit. Margins came in at 8.9%. This was a poor year, Y20.5bn (out of a total of Y28.5bn) was initially expected. However after 1Q this has been revised down to Y15bn. The problem first and foremost is with the movement business. This is about 20% of watch sales with OPM of over 20% (level undisclosed). They had expected shipments to be flat after a flat year to 3/16 movement sales fell 15%. High level of inventory in the system…

Citizen (7762) - At Best a Hold, Little to Attract

Citizen Watch

Citizen (7762) - At Best a Hold, Little to Attract