Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Nidec reported a solid set of quarterly numbers, except for another huge structural loss in its EV business. </li>
<li>Nidec saw sales growth and operating profitability improvements in all other segments</li>
<li>We continue to think that Nidec is attractively priced at under 20x EV/ EBIT given structural growth drivers</li>
</ul>


Nidec reported a solid set of quarterly numbers, except for another huge structural loss in its EV business. 
Nidec saw sales growth and operating profitability improvements in all other segments
We continue to think that Nidec is attractively priced at under 20x EV/ EBIT given structural growth drivers


<ul>
<li>Nidec’s share price rose by 7% on the largest volume day of the year and on a day where the Nikkei declined by 2%.</li>
<li>The move followed an announcement that Nidec will enhance its CDUs production line in Thailand by 10x by June 2024. CDUs are used to cool AI servers in data centres</li>
<li>The market impact of 250 billion yen implies a sales impact of 69 billion yen, which is far too high for 24,000 units per year</li>
</ul>


Nidec’s share price rose by 7% on the largest volume day of the year and on a day where the Nikkei declined by 2%.
The move followed an announcement that Nidec will enhance its CDUs production line in Thailand by 10x by June 2024. CDUs are used to cool AI servers in data centres
The market impact of 250 billion yen implies a sales impact of 69 billion yen, which is far too high for 24,000 units per year


Nidec (6594) | Liquid Cooling Overheats Stock

<ul>
<li>Nidec faces challenges amid global EV sales decline, with shares and valuations reflecting market pessimism.</li>
<li>Anticipated catalysts include forthcoming guidance, potential MTP reassessment, and a strategic acquisition opportunity.</li>
<li>At 18x EBIT, Nidec looks a compelling play on secular themes of electrification, automation, and energy efficiency.</li>
</ul>


Nidec faces challenges amid global EV sales decline, with shares and valuations reflecting market pessimism.
Anticipated catalysts include forthcoming guidance, potential MTP reassessment, and a strategic acquisition opportunity.
At 18x EBIT, Nidec looks a compelling play on secular themes of electrification, automation, and energy efficiency.


<ul>
<li>Consolidated net sales increased by +4.4% YoY to ¥594,026 million</li>
<li>Operating profit increased by 90% YoY to ¥53,562 million, but were down 3.7% QoQ.</li>
<li>Full-Year guidance for OP was revised down by 20% to ¥180,000 million. We remain bullish on long-term structural electrification thesis</li>
</ul>


Consolidated net sales increased by +4.4% YoY to ¥594,026 million
Operating profit increased by 90% YoY to ¥53,562 million, but were down 3.7% QoQ.
Full-Year guidance for OP was revised down by 20% to ¥180,000 million. We remain bullish on long-term structural electrification thesis


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Last May I proposed a model for thinking about the appropriate discount of <a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto (8369 JP)</a> vs its giant equity portfolio and small operations. It was a sell.</li>
<li>In December, the bank changed its shareholder return ratio, which indicated less value destruction, and tighter appropriate discount. The shares rallied and discount narrowed. </li>
<li>Now the Shares Adjusted for Banking Ops Valuation have seen the discount to After-Tax Equity Portfolio Valuation widen sharply in the past 10 days. So here's the hedging model.</li>
</ul>


Last May I proposed a model for thinking about the appropriate discount of Bank of Kyoto (8369 JP) vs its giant equity portfolio and small operations. It was a sell.
In December, the bank changed its shareholder return ratio, which indicated less value destruction, and tighter appropriate discount. The shares rallied and discount narrowed. 
Now the Shares Adjusted for Banking Ops Valuation have seen the discount to After-Tax Equity Portfolio Valuation widen sharply in the past 10 days. So here's the hedging model.


Bank of Kyoto (8369) - A Complicated Risk Model Clarified

Japan

NIDEC CORPORATION is the world's leading manufacturer of small precision motors mainly used in HDD and optical disk drives. The company has extended its focus to the home appliance and automotive markets. NIDEC is active in M&A and its subsidiaries include the world's leading manufacturers of LCD panel handling robots and camera shutters.

Nidec Corp (6594 JP)

Nidec (6594) | More EV Losses

Nidec reported a solid set of quarterly numbers, except for another huge structural loss in its EV business. All other segments saw sales growth...

Mark Chadwick

Nidec (6594) | Liquid Cooling Overheats Stock

Nidec's stock soars after announcing plans to increase CDU production in Thailand, despite our concerns over market impact and sales volume.

Mark Chadwick

Nidec (6594) | Forget the EV Slump

Nidec faces challenges in global EV market, but potential catalysts and strong positioning make it a compelling investment opportunity.

Mark Chadwick

Nidec (6594) | A Mixed Quarter

Japanese company's net sales increased by 4.4% YoY, operating profit rose by 90% YoY but decreased by 3.7% QoQ, and full-year guidance for...

Mark Chadwick

Bank of Kyoto (8369) - A Complicated Risk Model Clarified

The Bank of Kyoto (8369) model is clarified so dynamic hedging ratios depend on regional bank PBRs. The model suggests it's at the cheap end of its...

Travis Lundy

Nidec (6594) | More EV Losses

Nidec reported a solid set of quarterly numbers, except for another huge structural loss in its EV business. All other segments saw sales growth...

Mark Chadwick

Nidec (6594) | Liquid Cooling Overheats Stock

​Nidec's stock soars after announcing plans to increase CDU production in Thailand, despite our concerns over market impact and sales volume.

Mark Chadwick

Nidec (6594) | Forget the EV Slump

​Nidec faces challenges in global EV market, but potential catalysts and strong positioning make it a compelling investment opportunity.

Mark Chadwick

Nidec (6594) | A Mixed Quarter

​Japanese company's net sales increased by 4.4% YoY, operating profit rose by 90% YoY but decreased by 3.7% QoQ, and full-year guidance for...

Mark Chadwick

Bank of Kyoto (8369) - A Complicated Risk Model Clarified

The Bank of Kyoto (8369) model is clarified so dynamic hedging ratios depend on regional bank PBRs. The model suggests it's at the cheap end of its...

Travis Lundy

Nidec's stock soars after announcing plans to increase CDU production in Thailand, despite our concerns over market impact and sales volume.

Nidec faces challenges in global EV market, but potential catalysts and strong positioning make it a compelling investment opportunity.

Japanese company's net sales increased by 4.4% YoY, operating profit rose by 90% YoY but decreased by 3.7% QoQ, and full-year guidance for...