Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Securities analyst covering electronics, precision equipment & robotics, engineering, construction, transport and other sectors for more than 25 years in Japan and 3 years in Korea. Permanent resident of Japan.

Senior Technology Analyst, Japanese Equities

Misumi Group (9962 JP): Upward Revision Ahead After Strong 3Q Results

🇯🇵 JAPAN • Revisions 03/​​​​​​25 > Misumi & J. Front Retailing

Yaskawa – Overvalued, But Is It Time to Long Yaskawa, Short Fanuc Again?

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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

On February 2, we wrote <a href="https://www.smartkarma.com/insights/misumi-group-9962-jp-upward-revision-ahead-after-strong-3q-results" target="_blank" data-smartkarma-citation="insights:47529" rel="noopener">Misumi Group (9962 JP): Upward Revision Ahead After Strong 3Q Results</a> . This was realized on March 25, when management raided sales guidance for FY Mar-21 by 3.0%, operating profit guidance by 29.2% and net profit guidance by 7.4%. The upward revision was based on strong sales in China and efficiency gains at the operating level, with the gain in net profit reduced by impairment charges. The share price also peaked on February 2, at ¥3,655. It then dropped by 16% to ¥3,075 on March 11 before rebounding. On Friday, March 26, it was up 2.1% to ¥3,335.As Campbell Gunn wrote in <a href="https://www.smartkarma.com/insights/japan-revisions-03-25-misumi-j-front-retailing" target="_blank" data-smartkarma-citation="insights:49676" rel="noopener">🇯🇵 JAPAN • Revisions 03/​​​​​​25 &gt; Misumi &amp; J. Front Retailing</a> , the market reaction to this announcement could well be muted, particularly given the very modest revision to net income relative to the TTM results. It was.Misumi Group should continue to benefit from a recovery in demand for factory automation equipment, but with the shares selling at 59x management's new EPS guidance for FY Mar-21, this prospect is largely in the price.Rather than hope for multiple expansion in a rising interest rate environment, we favor Mio Kato's pair trade: <a href="https://www.smartkarma.com/insights/yaskawa-overvalued-but-is-it-time-to-long-yaskawa-short-fanuc-again" target="_blank" data-smartkarma-citation="insights:47187" rel="noopener">Yaskawa – Overvalued, But Is It Time to Long Yaskawa, Short Fanuc Again?</a>

On February 2, we wrote Misumi Group (9962 JP): Upward Revision Ahead After Strong 3Q Results . This was realized on March 25, when management raided sales guidance for FY Mar-21 by 3.0%, operating profit guidance by 29.2% and net profit guidance by 7.4%. The upward revision was based on strong sales in China and efficiency gains at the operating level, with the gain in net profit reduced by impairment charges. The share price also peaked on February 2, at ¥3,655. It then dropped by 16% to ¥3,075 on March 11 before rebounding. On Friday, March 26, it was up 2.1% to ¥3,335.As Campbell Gunn wrote in 🇯🇵 JAPAN • Revisions 03/​​​​​​25 &gt; Misumi &amp; J. Front Retailing , the market reaction to this announcement could well be muted, particularly given the very modest revision to net income relative to the TTM results. It was.Misumi Group should continue to benefit from a recovery in demand for factory automation equipment, but with the shares selling at 59x management's new EPS guidance for FY Mar-21, this prospect is largely in the price.Rather than hope for multiple expansion in a rising interest rate environment, we favor Mio Kato's pair trade: Yaskawa – Overvalued, But Is It Time to Long Yaskawa, Short Fanuc Again? 

Misumi Group (9962): Muted Response to Upward Revision