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.

Equity Bottom-Up

<ul>
<li>If further restructuring can be avoided, profitability should return to an acceptable level while sales growth continues. </li>
<li>The decline of EV prices has probably run its course and global demand for factory automation continues to rise despite weakness in China.</li>
<li>Projected valuations are at a 10-year low. Investor attention can now shift to economic and operating risks.</li>
</ul>


If further restructuring can be avoided, profitability should return to an acceptable level while sales growth continues. 
The decline of EV prices has probably run its course and global demand for factory automation continues to rise despite weakness in China.
Projected valuations are at a 10-year low. Investor attention can now shift to economic and operating risks.


Nidec (6594 JP): Buy into Current Decline

Japan Specialist

Mark Chadwick

<ul>
<li>Nidec reported Q1 OP of ¥60b, above the consensus of ¥53b. However this also included a gain from the consolidation of Nidec PSA</li>
<li>The key earnings driver was small precision motors, which are benefiting from recovery in HDD market and new earnings from cooling systems from AI Servers</li>
<li>We revise up our full year forecasts but do not believe the share price will react strongly to the "beat." Maintain bullish view on valuations</li>
</ul>


Nidec reported Q1 OP of ¥60b, above the consensus of ¥53b. However this also included a gain from the consolidation of Nidec PSA
The key earnings driver was small precision motors, which are benefiting from recovery in HDD market and new earnings from cooling systems from AI Servers
We revise up our full year forecasts but do not believe the share price will react strongly to the "beat." Maintain bullish view on valuations


<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

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

Chilled & Frozen Logistics Holdings / Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/chilled-frozen-logistics-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:40987:1" rel="noopener">Chilled &amp; Frozen Logistics Holdings (9099 JP)</a> Board has responded with several questions regarding <a href="https://www.smartkarma.com/entities/az-com-maruwa-holdings" target="_blank" data-smartkarma-citation="entities:17280:1" rel="noopener">AZ-Com Maruwa Holdings (9090 JP)</a>’s pre-conditional hostile offer of JPY3,000 per share.</li>
<li>The Board questions the transaction’s schedule, terms and potential synergies. The Board has also used the ruse that due diligence access would justify a higher offer price.</li>
<li>Expect several rounds of Q&amp;A and a delay to the tender start. If shares continue trading through terms ahead of the tender start, AZ-COM Maruwa will likely have to bump. </li>
</ul>


The Chilled &amp; Frozen Logistics Holdings (9099 JP) Board has responded with several questions regarding AZ-Com Maruwa Holdings (9090 JP)’s pre-conditional hostile offer of JPY3,000 per share.
The Board questions the transaction’s schedule, terms and potential synergies. The Board has also used the ruse that due diligence access would justify a higher offer price.
Expect several rounds of Q&amp;A and a delay to the tender start. If shares continue trading through terms ahead of the tender start, AZ-COM Maruwa will likely have to bump. 


Chilled & Frozen Logistics (9099 JP): Pass The🍿as the Board Responds to AZ-COM Maruwa (9090 JP)

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 JP): Buy into Current Decline

Selling at the bottom of its 10-year valuation range. Management has raised guidance after lackluster 1Q results. If further restructuring can be...

Scott Foster

Nidec (6594)| Q1 Beat, but Some One-Offs

Nidec's Q1 operating profit beat expectations, driven by small precision motors and new earnings from AI server cooling systems. FY forecasts...

Mark Chadwick

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

Chilled & Frozen Logistics (9099 JP): Pass The🍿as the Board Responds to AZ-COM Maruwa (9090 JP)

Expect several rounds of Q&A and a delay to the tender start. AZ-COM Maruwa could eventually bump closer to the May tender start. However, as...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Nidec (6594 JP): Buy into Current Decline

Selling at the bottom of its 10-year valuation range. Management has raised guidance after lackluster 1Q results. If further restructuring can be...

Scott Foster

Nidec (6594)| Q1 Beat, but Some One-Offs

​Nidec's Q1 operating profit beat expectations, driven by small precision motors and new earnings from AI server cooling systems. FY forecasts...

Mark Chadwick

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

Chilled & Frozen Logistics (9099 JP): Pass The🍿as the Board Responds to AZ-COM Maruwa (9090 JP)

Expect several rounds of Q&A and a delay to the tender start. AZ-COM Maruwa could eventually bump closer to the May tender start. However, as...

Arun George

Nidec's Q1 operating profit beat expectations, driven by small precision motors and new earnings from AI server cooling systems. FY forecasts...

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