Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Q3 sales fell 4% YoY and operating profit dropped 57%, reflecting continued weakness in bicycles and margin compression, though results aligned with lowered guidance. </li>
<li>Elevated channel inventories in Europe and China highlight lingering post-Covid demand normalization, with 2026 guidance likely to remain conservative amid structural headwinds.</li>
<li>ROIC has halved as invested capital outpaced sales growth; despite strong cash and shareholder returns, Shimano faces slow recovery and limited near-term catalysts.</li>
</ul>


Q3 sales fell 4% YoY and operating profit dropped 57%, reflecting continued weakness in bicycles and margin compression, though results aligned with lowered guidance. 
Elevated channel inventories in Europe and China highlight lingering post-Covid demand normalization, with 2026 guidance likely to remain conservative amid structural headwinds.
ROIC has halved as invested capital outpaced sales growth; despite strong cash and shareholder returns, Shimano faces slow recovery and limited near-term catalysts.


<ul>
<li>Q2 saw sales growth slow sharply (+8% yoy vs +16% in Q1) with OPM collapsing 600bps qoq; OP cut 34% sequentially.</li>
<li>China sales reset to long-term average, but FY25 outlook slashed to ¥58b (-42% vs prior) with limited disclosure on margin impact.</li>
<li>Stock down 25% post-results; buyback expansion (¥50b cap maintained) and long-only accumulation (First Eagle to 9.4%) provide near-term support.</li>
</ul>


Q2 saw sales growth slow sharply (+8% yoy vs +16% in Q1) with OPM collapsing 600bps qoq; OP cut 34% sequentially.
China sales reset to long-term average, but FY25 outlook slashed to ¥58b (-42% vs prior) with limited disclosure on margin impact.
Stock down 25% post-results; buyback expansion (¥50b cap maintained) and long-only accumulation (First Eagle to 9.4%) provide near-term support.


Shimano (7309 JP) — Q2 Miss Resets Expectations; China Drag Masks EU Recovery

<ul>
<li>Shimano reported a 40% drop in operating profit for 2Q and revised down full year guidance</li>
<li>Bike sales continue to be weak (-19% YoY) in Q2 and 2H outlook is even worse</li>
<li>We expect the share price to sell-off following the guidance cut. The inventory overhang could take a while to resolve</li>
</ul>


Shimano reported a 40% drop in operating profit for 2Q and revised down full year guidance
Bike sales continue to be weak (-19% YoY) in Q2 and 2H outlook is even worse
We expect the share price to sell-off following the guidance cut. The inventory overhang could take a while to resolve


Shimano (7309) | Profit Recovery Derailed

<ul>
<li>Shimano beat Q1 profit expectations but stuck to cautious full-year guidance, signalling stabilisation in bike markets rather than a real recovery.</li>
<li>Margins improved, inventories stabilised — but Shimano’s profitability remains well below historic highs, with recovery likely to stay slow and steady.</li>
<li>Strong balance sheet, resilient pricing, limited US exposure: Shimano looks a defensive bet, even if management's guidance ends up on the optimistic side.</li>
</ul>


Shimano beat Q1 profit expectations but stuck to cautious full-year guidance, signalling stabilisation in bike markets rather than a real recovery.
Margins improved, inventories stabilised — but Shimano’s profitability remains well below historic highs, with recovery likely to stay slow and steady.
Strong balance sheet, resilient pricing, limited US exposure: Shimano looks a defensive bet, even if management's guidance ends up on the optimistic side.


<ul>
<li>US tariffs could sharply cut Shimano’s H2 operating profit by up to 57%, despite limited direct exposure, due to opaque supply chains via China and Taiwan.</li>
<li>Valuation would look stretched at 25x EV/EBIT versus historical 20x, if earnings fall short of current guidance.</li>
<li>Shimano’s ¥530bn net cash pile offers room to boost shareholder returns through buybacks or dividends.</li>
</ul>


US tariffs could sharply cut Shimano’s H2 operating profit by up to 57%, despite limited direct exposure, due to opaque supply chains via China and Taiwan.
Valuation would look stretched at 25x EV/EBIT versus historical 20x, if earnings fall short of current guidance.
Shimano’s ¥530bn net cash pile offers room to boost shareholder returns through buybacks or dividends.


Japan

SHIMANO INC. manufactures and sells products for bicycling, snowboarding, and fishing.  The Company's products include running gears and brake parts for bicycles and rods, reels, and tackles for fishing.  The Company manufactures golf related products as well.  Shimano mainly exports to Asia, Europe, and the United States.

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Shimano Inc (7309 JP)

Shimano (7309 JP) | Digesting the Boom

Shimano's Q3 results show sales and profit decline, with lingering post-Covid demand normalization and conservative 2026 guidance due to...

Mark Chadwick

Shimano (7309 JP) — Q2 Miss Resets Expectations; China Drag Masks EU Recovery

Q2 sales growth slows sharply, OPM collapses, China sales reset, FY25 outlook slashed, stock down 25% post-results with buyback expansion and long...

Mark Chadwick

Shimano (7309) | Profit Recovery Derailed

We expect the share price to sell-off following the guidance cut. The inventory overhang could take a while to resolve given weak bike sales in Europe

Mark Chadwick

Shimano (7309) | Coasting, Not Sprinting

Shimano's Q1 profits beat expectations, but cautious full-year guidance suggests a slow recovery in bike markets with margins improving and...

Mark Chadwick

Shimano (7309) | Gears Grinding

US tariffs could significantly impact Shimano's profits due to supply chain exposure, potentially leading to stretched valuation and potential for...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Shimano (7309 JP) | Digesting the Boom

​Shimano's Q3 results show sales and profit decline, with lingering post-Covid demand normalization and conservative 2026 guidance due to...

Mark Chadwick

Shimano (7309 JP) — Q2 Miss Resets Expectations; China Drag Masks EU Recovery

​Q2 sales growth slows sharply, OPM collapses, China sales reset, FY25 outlook slashed, stock down 25% post-results with buyback expansion and long...

Mark Chadwick

Shimano (7309) | Profit Recovery Derailed

We expect the share price to sell-off following the guidance cut. The inventory overhang could take a while to resolve given weak bike sales in Europe

Mark Chadwick

Shimano (7309) | Coasting, Not Sprinting

​Shimano's Q1 profits beat expectations, but cautious full-year guidance suggests a slow recovery in bike markets with margins improving and...

Mark Chadwick

Shimano (7309) | Gears Grinding

​US tariffs could significantly impact Shimano's profits due to supply chain exposure, potentially leading to stretched valuation and potential for...

Mark Chadwick

Shimano's Q3 results show sales and profit decline, with lingering post-Covid demand normalization and conservative 2026 guidance due to...

Q2 sales growth slows sharply, OPM collapses, China sales reset, FY25 outlook slashed, stock down 25% post-results with buyback expansion and long...

Shimano's Q1 profits beat expectations, but cautious full-year guidance suggests a slow recovery in bike markets with margins improving and...

US tariffs could significantly impact Shimano's profits due to supply chain exposure, potentially leading to stretched valuation and potential for...