Nippon Investment Bespoke Research UK Ltd

Nippon Investment Bespoke Research UK

Equity Bottom-Up

<ul><li>Daido Steel (5471 JP) produced FY25 (March year-end) 1H OP [IFRS basis] of ¥18,464mil (+1.1% YoY) on sales of ¥284,499mil (+0.4% YoY).</li><li>Both sales and OP surpassed guidance which called for OP of ¥12,500mil (-31.5% YoY) on sales of ¥275,000mil (-3.0% YoY), thanks primarily to stronger than expected demand for ship engine valves in the open die forging business and despite having incurred about ¥2,300mil of costs related to the Superalloy Manufacturing Process Transformation Project, one of the firm’s ongoing strategic investments in the current MTP.</li><li>The Mid-Term Plan [MTP], which ends in FY26, was revised down to reflect (1) a larger than expected decline in steel product sales volumes, (2) sluggish auto production and weaker than expected industrial machinery-related orders and (3) increasing lack of clarity in the business environment.</li></ul>

Daido Steel (5471 JP) produced FY25 (March year-end) 1H OP [IFRS basis] of ¥18,464mil (+1.1% YoY) on sales of ¥284,499mil (+0.4% YoY).Both sales and OP surpassed guidance which called for OP of ¥12,500mil (-31.5% YoY) on sales of ¥275,000mil (-3.0% YoY), thanks primarily to stronger than expected demand for ship engine valves in the open die forging business and despite having incurred about ¥2,300mil of costs related to the Superalloy Manufacturing Process Transformation Project, one of the firm’s ongoing strategic investments in the current MTP.The Mid-Term Plan [MTP], which ends in FY26, was revised down to reflect (1) a larger than expected decline in steel product sales volumes, (2) sluggish auto production and weaker than expected industrial machinery-related orders and (3) increasing lack of clarity in the business environment.

DAIDO STEEL CO., LTD (5471 JP): RESEARCH UPDATE

Global Materials | Industrials | Commodities

Rahul Jain

<ul>
<li>Leading Japanese specialty steelmaker with core exposure to auto, stainless/alloys, magnets, and industrial components.</li>
<li>Mid-Term strategy centers on higher-margin growth products (SPE stainless, magnets, aerospace forgings) supported by new VAR and forging capacity.</li>
<li>Valuations &amp; Risks: Trades at a forward P/E compressing to ~5× by FY28E, but cyclical demand swings and raw material volatility remain key risks.</li>
</ul>


Leading Japanese specialty steelmaker with core exposure to auto, stainless/alloys, magnets, and industrial components.
Mid-Term strategy centers on higher-margin growth products (SPE stainless, magnets, aerospace forgings) supported by new VAR and forging capacity.
Valuations &amp; Risks: Trades at a forward P/E compressing to ~5× by FY28E, but cyclical demand swings and raw material volatility remain key risks.


Daido Steel – Specialty Strength with Strategic Upside

<ul><li>Daido Steel (5471 JP) produced FY24 (March year-end) results full-year OP [IFRS basis] of ¥39,408mil (-6.7% YoY) on sales of ¥574,945mil (-0.6% YoY).</li><li>Due to multiple unknown factors surrounding the business environment such as impact from the US trade tariff policy and volatile FOREX, Daido Steel only released FY25 1H guidance.</li><li>The firm is guiding for 1H OP of ¥12,500mil (-31.5% YoY / -40.9% HoH) on sales of ¥275,000mil (-3.0% YoY / -5.7% HoH).</li></ul>

Daido Steel (5471 JP) produced FY24 (March year-end) results full-year OP [IFRS basis] of ¥39,408mil (-6.7% YoY) on sales of ¥574,945mil (-0.6% YoY).Due to multiple unknown factors surrounding the business environment such as impact from the US trade tariff policy and volatile FOREX, Daido Steel only released FY25 1H guidance.The firm is guiding for 1H OP of ¥12,500mil (-31.5% YoY / -40.9% HoH) on sales of ¥275,000mil (-3.0% YoY / -5.7% HoH).

Daido Steel Co., Ltd (5471 JP): Research Update

<ul><li>Daido Steel’s cumulative FY24 Q1~Q3 earnings landed in line with the firm’s revised forecast, with the 9-month OP [IFRS basis] coming in at ¥34,070mil (-10.6% YoY) on sales of ¥433,961mil (-1.1% YoY).</li><li>The decline in OP is primarily due to tough comps – in FY23 the firm reported ¥7,200mil from real estate sales gains.</li><li>Although the 9-month OP has achieved 85% of the full-year guidance, Daido Steel did not change the full-year forecast due to some cost items such as fixed asset tax to be incurred in Q4.</li></ul>

Daido Steel’s cumulative FY24 Q1~Q3 earnings landed in line with the firm’s revised forecast, with the 9-month OP [IFRS basis] coming in at ¥34,070mil (-10.6% YoY) on sales of ¥433,961mil (-1.1% YoY).The decline in OP is primarily due to tough comps – in FY23 the firm reported ¥7,200mil from real estate sales gains.Although the 9-month OP has achieved 85% of the full-year guidance, Daido Steel did not change the full-year forecast due to some cost items such as fixed asset tax to be incurred in Q4.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>With <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota (7203 JP)</a> having sold some of its stake in <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso</a>, <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI</a> and <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive</a> this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.</li>
<li>Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


With Toyota (7203 JP) having sold some of its stake in Denso, KDDI and Harmonic Drive this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.
Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Japan

DAIDO STEEL CO., LTD. manufactures and markets specialty steel products for automobiles, electronics, and construction use.  The Company also provides engineering services for industrial furnaces and waste disposal facilities, and develops various types of alloy metals.

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Daido Steel (5471 JP)

DAIDO STEEL CO., LTD (5471 JP): RESEARCH UPDATE

Daido Steel (5471 JP) produced FY25 (March year-end) 1H OP [IFRS basis] of ¥18,464mil (+1.1% YoY) on sales of ¥284,499mil (+0.4% YoY). Both sales...

Nippon Investment Bespoke Research UK

Daido Steel – Specialty Strength with Strategic Upside

Japanese specialty steelmaker focusing on high-margin growth products like stainless steel, magnets, and aerospace forgings, but faces risks from...

Rahul Jain

Daido Steel Co., Ltd (5471 JP): Research Update

Daido Steel (5471 JP) produced FY24 (March year-end) results full-year OP [IFRS basis] of ¥39,408mil (-6.7% YoY) on sales of ¥574,945mil (-0.6%...

Nippon Investment Bespoke Research UK

Daido Steel Co., Ltd (5471 JP): Research Update

Daido Steel’s cumulative FY24 Q1~Q3 earnings landed in line with the firm’s revised forecast, with the 9-month OP [IFRS basis] coming in at...

Nippon Investment Bespoke Research UK

Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Toyota, Toyota Industries and Denso are tag teaming to unwind some of their stake in Aisin, in a deal worth over US$1bn. While the timing of the...

Sumeet Singh

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52-week Range

Market Cap (USDm)

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DAIDO STEEL CO., LTD (5471 JP): RESEARCH UPDATE

Daido Steel (5471 JP) produced FY25 (March year-end) 1H OP [IFRS basis] of ¥18,464mil (+1.1% YoY) on sales of ¥284,499mil (+0.4% YoY). Both sales...

Nippon Investment Bespoke Research UK

Daido Steel – Specialty Strength with Strategic Upside

​Japanese specialty steelmaker focusing on high-margin growth products like stainless steel, magnets, and aerospace forgings, but faces risks from...

Rahul Jain

Daido Steel Co., Ltd (5471 JP): Research Update

Daido Steel (5471 JP) produced FY24 (March year-end) results full-year OP [IFRS basis] of ¥39,408mil (-6.7% YoY) on sales of ¥574,945mil (-0.6%...

Nippon Investment Bespoke Research UK

Daido Steel Co., Ltd (5471 JP): Research Update

Daido Steel’s cumulative FY24 Q1~Q3 earnings landed in line with the firm’s revised forecast, with the 9-month OP [IFRS basis] coming in at...

Nippon Investment Bespoke Research UK

Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Toyota, Toyota Industries and Denso are tag teaming to unwind some of their stake in Aisin, in a deal worth over US$1bn. While the timing of the...

Sumeet Singh

Japanese specialty steelmaker focusing on high-margin growth products like stainless steel, magnets, and aerospace forgings, but faces risks from...