Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Shimano Q3 results show a 32% YoY net sales decline, led by a 38% drop in bike component sales, BUT both sales and profit beat expectations</li>
<li>The company maintains cost control, sees improving gross margins, and reduces inventories, while cash flow and balance sheet remain strong</li>
<li>With the upward revision in full-year guidance, we believe the market will look through the still challenging Q4 outlook and focus instead on 2024 normalization and relatively low valuation</li>
</ul>


Shimano Q3 results show a 32% YoY net sales decline, led by a 38% drop in bike component sales, BUT both sales and profit beat expectations
The company maintains cost control, sees improving gross margins, and reduces inventories, while cash flow and balance sheet remain strong
With the upward revision in full-year guidance, we believe the market will look through the still challenging Q4 outlook and focus instead on 2024 normalization and relatively low valuation


<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 reported Q1 results post close. Operating profit fell 26% YoY and full year guidance was cut 21%</li>
<li>We believe that sales in 2023 have simply reverted back to trend. We expect sales to grow in 2024 as underlying demand drivers remain intact</li>
<li>With the stock down 9% over the past year, we believe the market has discounted the profit revision. We see good value at 17x EV/EBIT</li>
</ul>


Shimano reported Q1 results post close. Operating profit fell 26% YoY and full year guidance was cut 21%
We believe that sales in 2023 have simply reverted back to trend. We expect sales to grow in 2024 as underlying demand drivers remain intact
With the stock down 9% over the past year, we believe the market has discounted the profit revision. We see good value at 17x EV/EBIT


<ul>
<li>Shimano's Q4 results were on track, but management is guiding for a GFC-level slump in 2023</li>
<li>Management cites macro concerns, but these are well-known, discounted, and already recovering...probably</li>
<li>Shimano's stock price is trading at 23x bearish guidance versus its historical average of 25x. </li>
</ul>


Shimano's Q4 results were on track, but management is guiding for a GFC-level slump in 2023
Management cites macro concerns, but these are well-known, discounted, and already recovering...probably
Shimano's stock price is trading at 23x bearish guidance versus its historical average of 25x. 


<ul>
<li>Shimano's stock has declined by 26% YTD reflecting concerns over an economic recession and sales normalization post pandemic</li>
<li>We believe that Shimano is a key beneficiary of government policy aimed at decarbonization</li>
<li>We analyse Shimano's core value drivers and see at around 23% upside for the stock</li>
</ul>


Shimano's stock has declined by 26% YTD reflecting concerns over an economic recession and sales normalization post pandemic
We believe that Shimano is a key beneficiary of government policy aimed at decarbonization
We analyse Shimano's core value drivers and see at around 23% upside for the stock


Shimano (7309) | Value Drivers in an Age of Sobriety

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) | A Clear Road Ahead

Shimano Q3 results: Net sales decline, but beat expectations. Cost control, improving margins, and strong balance sheet. We turn bullish on...

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) | The Hangover

Shimano reported Q1 results post close. Operating profit fell 26% YoY and full year guidance was cut 21%. We remain bullish as long-term consumer...

Mark Chadwick

Shimano (7309) | Doom and Gloom?

Shimano guidance for 2023 was well below the street with OP forecast to decline 29% YoY to 105 billion yen (street Y160b).

Mark Chadwick

Shimano (7309) | Value Drivers in an Age of Sobriety

Shimano's stock has declined by 26% YTD. We are bullish on the name despite near term headwinds and believe the stock is one of the key...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Shimano (7309) | A Clear Road Ahead

​Shimano Q3 results: Net sales decline, but beat expectations. Cost control, improving margins, and strong balance sheet. We turn bullish on...

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) | The Hangover

Shimano reported Q1 results post close. Operating profit fell 26% YoY and full year guidance was cut 21%. We remain bullish as long-term consumer...

Mark Chadwick

Shimano (7309) | Doom and Gloom?

Shimano guidance for 2023 was well below the street with OP forecast to decline 29% YoY to 105 billion yen (street Y160b).

Mark Chadwick

Shimano (7309) | Value Drivers in an Age of Sobriety

Shimano's stock has declined by 26% YTD. We are bullish on the name despite near term headwinds and believe the stock is one of the key...

Mark Chadwick

Shimano Q3 results: Net sales decline, but beat expectations. Cost control, improving margins, and strong balance sheet. We turn bullish on...