Director, Pearl Hill Advisors

Nicholas Tanner

Director

Pearl Hill Advisors

Equity Bottom-Up

<p>Nine-month results (to September) were behind expectations and full year results were revised down as a result, operating profit from Y150bn (+0%) to Y143bn (-5%). The shortfall was mainly due to weaker than expected sales of big bikes in the developed markets, and Europe in particular. The rest of the business continues to do relatively well. After the downward revision on Wednesday the shares fell 15%. They are now off 40% for the year. They trade at book and on 7.5x this year’s earnings. We believe profits will increase next year, perhaps to Y155bn (+8%) and as such believe the shares are now oversold. The company will also benefit significantly from a weaker yen.</p>

Nine-month results (to September) were behind expectations and full year results were revised down as a result, operating profit from Y150bn (+0%) to Y143bn (-5%). The shortfall was mainly due to weaker than expected sales of big bikes in the developed markets, and Europe in particular. The rest of the business continues to do relatively well. After the downward revision on Wednesday the shares fell 15%. They are now off 40% for the year. They trade at book and on 7.5x this year’s earnings. We believe profits will increase next year, perhaps to Y155bn (+8%) and as such believe the shares are now oversold. The company will also benefit significantly from a weaker yen.

Yamaha Motor (7272) Way Oversold During October Sell Off. BUY Now