Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Nidec beat Q4 expectations but offered muted FY3/26 guidance, with flat sales and modest profit growth amid macro and tariff uncertainty.</li>
<li>New CEO Kishida shifts focus from top-line ambition to margin discipline, targeting ¥150bn in cost cuts over three years.</li>
<li>Once a high-growth play, Nidec now trades at value multiples — 1.5x book — offering a more grounded path to shareholder returns.</li>
</ul>


Nidec beat Q4 expectations but offered muted FY3/26 guidance, with flat sales and modest profit growth amid macro and tariff uncertainty.
New CEO Kishida shifts focus from top-line ambition to margin discipline, targeting ¥150bn in cost cuts over three years.
Once a high-growth play, Nidec now trades at value multiples — 1.5x book — offering a more grounded path to shareholder returns.


Nidec (6594) | Chasing Trends to Fiscal Discipline

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>Outlook improving with rising demand for energy storage systems and near-line HDDs and water cooling modules for AI servers.</li>
<li>3Q results point to FY sales above and profits in line with management's guidance. Proceeding toward acquisition of Makino Milling next fiscal year.</li>
<li>At 17.5x projected earnings and 10x cash flow, the shares are at the bottom of their 10-year valuation range. Buy for the medium- to long term.</li>
</ul>


Outlook improving with rising demand for energy storage systems and near-line HDDs and water cooling modules for AI servers.
3Q results point to FY sales above and profits in line with management's guidance. Proceeding toward acquisition of Makino Milling next fiscal year.
At 17.5x projected earnings and 10x cash flow, the shares are at the bottom of their 10-year valuation range. Buy for the medium- to long term.


Nidec (6594 JP): Growth Prospects Improving

<ul>
<li>Q3 net sales reached ¥652,153 million, up 1.0% quarter-on-quarter, driven by strong demand for power generators and battery energy storage systems. Operating profit of ¥54,536 million (-10.1% QoQ) missed expectations.</li>
<li>There has been a notable vibe-shift since Kishida took over as CEO - more focus on operational improvements and hopefully margin accretion.</li>
<li>Strategic M&amp;A remains a driver and the Makino Milling deal makes sense. At 14x EV / EBIT, the stock should be on the radar of value or GARP investors</li>
</ul>


Q3 net sales reached ¥652,153 million, up 1.0% quarter-on-quarter, driven by strong demand for power generators and battery energy storage systems. Operating profit of ¥54,536 million (-10.1% QoQ) missed expectations.
There has been a notable vibe-shift since Kishida took over as CEO - more focus on operational improvements and hopefully margin accretion.
Strategic M&amp;A remains a driver and the Makino Milling deal makes sense. At 14x EV / EBIT, the stock should be on the radar of value or GARP investors


<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

<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

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) | Chasing Trends to Fiscal Discipline

Nidec beats Q4 expectations but offers muted guidance, focusing on cost cuts and margin discipline to drive shareholder returns in uncertain macro...

Mark Chadwick

Nidec (6594 JP): Growth Prospects Improving

Good 3Q results and rising demand for server cooling units and energy storage point to continued growth. Valuations at the lowest level in a...

Scott Foster

Nidec | Pragmatism Shines; Q3 Results

Q3 net sales up 1.0% driven by demand for power generators & battery energy storage. CEO shift to focus on operational improvements, strategic M&A...

Mark Chadwick

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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Nidec (6594) | Chasing Trends to Fiscal Discipline

​Nidec beats Q4 expectations but offers muted guidance, focusing on cost cuts and margin discipline to drive shareholder returns in uncertain macro...

Mark Chadwick

Nidec (6594 JP): Growth Prospects Improving

Good 3Q results and rising demand for server cooling units and energy storage point to continued growth. Valuations at the lowest level in a...

Scott Foster

Nidec | Pragmatism Shines; Q3 Results

​Q3 net sales up 1.0% driven by demand for power generators & battery energy storage. CEO shift to focus on operational improvements, strategic M&A...

Mark Chadwick

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 beats Q4 expectations but offers muted guidance, focusing on cost cuts and margin discipline to drive shareholder returns in uncertain macro...

Q3 net sales up 1.0% driven by demand for power generators & battery energy storage. CEO shift to focus on operational improvements, strategic M&A...

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