Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Nidec’s tender offer of Makino would strengthen its portfolio, combining advanced machining technologies with automation solutions to lead the global machine tool industry.</li>
<li>The synergy between Nidec and Makino unlocks cost savings, streamlined operations, and innovative solutions for high-growth sectors like electric vehicles and aerospace.</li>
<li>We estimate that the deal to acquire Makino would be between 8-13% EPS accretive for Nidec.</li>
</ul>


Nidec’s tender offer of Makino would strengthen its portfolio, combining advanced machining technologies with automation solutions to lead the global machine tool industry.
The synergy between Nidec and Makino unlocks cost savings, streamlined operations, and innovative solutions for high-growth sectors like electric vehicles and aerospace.
We estimate that the deal to acquire Makino would be between 8-13% EPS accretive for Nidec.


Nidec (6594) | Sharpens Its Edge in Global Manufacturing

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

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.

<ul>
<li>Nidec has announced its intention to acquire Makino Milling Machine (6135 JP) for ¥11,000 per share, a 42% premium over Thursday's closing price.</li>
<li>The stock market liked the idea. Nidec's share price rose 4% on Friday. Makino's jumped 19%. The pice looks high, but at 17.7x Makino's EPS guidance, it is not unreasonable.</li>
<li>The acquisition would be accretive to earnings and bring greater scale and competitiveness to Nidec's machine tool business. It should support our Buy recommendation. </li>
</ul>


Nidec has announced its intention to acquire Makino Milling Machine (6135 JP) for ¥11,000 per share, a 42% premium over Thursday's closing price.
The stock market liked the idea. Nidec's share price rose 4% on Friday. Makino's jumped 19%. The pice looks high, but at 17.7x Makino's EPS guidance, it is not unreasonable.
The acquisition would be accretive to earnings and bring greater scale and competitiveness to Nidec's machine tool business. It should support our Buy recommendation. 


Nidec (6594 JP): Acquisition of Makino Milling Would Add Value

<ul>
<li>Shipping the first water-based cooling systems for servers equipped with Nvidia's new Blackwell GPUs and building two new motor factories in India.</li>
<li>Moving beyond excessive dependence on China while restructuring operations to reduce costs. Sales short of 1H guidnce, but operating profit up. </li>
<li>Share price down 30% since May and close to its 52-week low. Selling at 17.5x this fiscal year's EPS guidance, the lowest P/E multiple in a decade. </li>
</ul>


Shipping the first water-based cooling systems for servers equipped with Nvidia's new Blackwell GPUs and building two new motor factories in India.
Moving beyond excessive dependence on China while restructuring operations to reduce costs. Sales short of 1H guidnce, but operating profit up. 
Share price down 30% since May and close to its 52-week low. Selling at 17.5x this fiscal year's EPS guidance, the lowest P/E multiple in a decade. 


Nidec (6594 JP): India & Nvidia Point the Way Forward

<ul>
<li>Nidec's Q2 operating income beat my estimates, driven by strong small motors and appliance segments, though automotive profits underperformed</li>
<li>The automotive division is shifting focus from e-axles to broader auto parts, while improving operational efficiency through partnerships and streamlined logistics</li>
<li>Despite macro risks, Nidec remains well-positioned for long-term growth in digitalization, decarbonization, and automation, with a price target of ¥4,350</li>
</ul>


Nidec's Q2 operating income beat my estimates, driven by strong small motors and appliance segments, though automotive profits underperformed
The automotive division is shifting focus from e-axles to broader auto parts, while improving operational efficiency through partnerships and streamlined logistics
Despite macro risks, Nidec remains well-positioned for long-term growth in digitalization, decarbonization, and automation, with a price target of ¥4,350


Nidec (6594)| Q2 In-Line; Long-Term Outlook Intact

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads: <a href="https://www.smartkarma.com/entities/smart-share-global-limited" target="_blank" data-smartkarma-citation="entities:32217:1" rel="noopener">Smart Share Global (EM US)</a>, <a href="https://www.smartkarma.com/entities/pressance-corp" target="_blank" data-smartkarma-citation="entities:17783:1" rel="noopener">Pressance Corp (3254 JP)</a>, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, <a href="https://www.smartkarma.com/entities/get-nice-financial-group-ltd" target="_blank" data-smartkarma-citation="entities:29667:1" rel="noopener">Get Nice Financial Group Ltd (1469 HK)</a>, <a href="https://www.smartkarma.com/entities/esr-group-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR Group (1821 HK)</a>. 
</li>
<li>Lowest spreads: <a href="https://www.smartkarma.com/entities/lifestyle-china-group-ltd" target="_blank" data-smartkarma-citation="entities:26090:1" rel="noopener">Lifestyle China (2136 HK)</a>, <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a>, <a href="https://www.smartkarma.com/entities/macromill-inc" target="_blank" data-smartkarma-citation="entities:24026:1" rel="noopener">Macromill, Inc (3978 JP)</a>, <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a>, <a href="https://www.smartkarma.com/entities/latin-resources-ltd" target="_blank" data-smartkarma-citation="entities:8770:1" rel="noopener">Latin Resources (LRS AU)</a>.    </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Smart Share Global (EM US), Pressance Corp (3254 JP), Seven &amp; I Holdings (3382 JP), Get Nice Financial Group Ltd (1469 HK), ESR Group (1821 HK). 

Lowest spreads: Lifestyle China (2136 HK), Makino Milling Machine Co (6135 JP), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Latin Resources (LRS AU).    


Merger Arb Mondays (13 Jan) - ESR, Henlius, Goldlion, Canvest, 7&I, Fujitsu General, Pressance

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.

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Nidec Corp (6594 JP)

Nidec (6594) | Sharpens Its Edge in Global Manufacturing

Nidec's acquisition of Makino would enhance its portfolio, combining advanced machining technologies with automation to lead the global machine...

Mark Chadwick

Nidec (6594 JP): Acquisition of Makino Milling Would Add Value

The acquisition of Makino Milling would be accretive to Nidec's earnings, strengthen its consolidated balance sheet, and make a substantial...

Scott Foster

Nidec (6594 JP): India & Nvidia Point the Way Forward

New factories in India, water-cooling units for Blackwell equipped servers and other factors to support sales growth and higher margins. 17.5x P/E...

Scott Foster

Nidec (6594)| Q2 In-Line; Long-Term Outlook Intact

Nidec's Q2 results exceeded my expectations, with strong performance in small motors and appliances but weaker profits in automotive. Stock...

Mark Chadwick

Merger Arb Mondays (13 Jan) - ESR, Henlius, Goldlion, Canvest, 7&I, Fujitsu General, Pressance

This week, the highest gross spreads are Smart Share (26.3%), Pressance (22.1%), Seven & I (15.2%), Get Nice Financial (9.9%), ESR (8.3%), Goldlion...

Arun George

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52-week Range

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Nidec (6594) | Sharpens Its Edge in Global Manufacturing

​Nidec's acquisition of Makino would enhance its portfolio, combining advanced machining technologies with automation to lead the global machine...

Mark Chadwick

Nidec (6594 JP): Acquisition of Makino Milling Would Add Value

The acquisition of Makino Milling would be accretive to Nidec's earnings, strengthen its consolidated balance sheet, and make a substantial...

Scott Foster

Nidec (6594 JP): India & Nvidia Point the Way Forward

New factories in India, water-cooling units for Blackwell equipped servers and other factors to support sales growth and higher margins. 17.5x P/E...

Scott Foster

Nidec (6594)| Q2 In-Line; Long-Term Outlook Intact

​Nidec's Q2 results exceeded my expectations, with strong performance in small motors and appliances but weaker profits in automotive. Stock...

Mark Chadwick

Merger Arb Mondays (13 Jan) - ESR, Henlius, Goldlion, Canvest, 7&I, Fujitsu General, Pressance

This week, the highest gross spreads are Smart Share (26.3%), Pressance (22.1%), Seven & I (15.2%), Get Nice Financial (9.9%), ESR (8.3%), Goldlion...

Arun George

Nidec's acquisition of Makino would enhance its portfolio, combining advanced machining technologies with automation to lead the global machine...

Nidec's Q2 results exceeded my expectations, with strong performance in small motors and appliances but weaker profits in automotive. Stock...