Japan Specialist

Mark Chadwick

Equity Bottom-Up

<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

Thematic (Sector/Industry)

<ul>
<li>After leading the market higher in 2021, growth stocks have significantly underperformed over the past 12 months. </li>
<li>Valuations may not yet have reached rock bottom levels and all these 3 stocks still trade at a premium to our universe of 14x PE</li>
<li>These 3 stocks all have strong long-terms structural drivers that make buying on the dip attractive for patient investors</li>
</ul>


After leading the market higher in 2021, growth stocks have significantly underperformed over the past 12 months. 
Valuations may not yet have reached rock bottom levels and all these 3 stocks still trade at a premium to our universe of 14x PE
These 3 stocks all have strong long-terms structural drivers that make buying on the dip attractive for patient investors


Japan Weekly | 3 Growth Stocks to Buy on the Dip

<ul>
<li>Shimano’s stock price declined by 5.8% today on a broker downgrade, citing a slowdown in Europe</li>
<li>Shimano has zero debt, tons of cash, low capital investment requirements and pricing power = defensive business model</li>
<li>We can think of six reasons to remain bullish on the stock </li>
</ul>


Shimano’s stock price declined by 5.8% today on a broker downgrade, citing a slowdown in Europe
Shimano has zero debt, tons of cash, low capital investment requirements and pricing power = defensive business model
We can think of six reasons to remain bullish on the stock 


Shimano (7309) | Six Reasons to Stay Bullish

<ul>
<li>The European economy is heading for a recession due to surging energy costs</li>
<li>We believe that equity markets have already discounted this severe situation to a large extent</li>
<li>As governments respond with aggressive fiscal measures, we believe 3 Japanese stocks will be key beneficiaries</li>
</ul>


The European economy is heading for a recession due to surging energy costs
We believe that equity markets have already discounted this severe situation to a large extent
As governments respond with aggressive fiscal measures, we believe 3 Japanese stocks will be key beneficiaries


European Recession - 3 Japanese Stocks to BUY for a Rebound

<ul>
<li>Shimano's stock price has declined by 25% year to date on expectations that bike sales will soon start going downhill</li>
<li>We model a GFC-style recession and find that Shimano's valuation has already reflected the worst case scenario</li>
<li>If we are heading for a collapse, then <a href="https://www.smartkarma.com/entities/ferrari-n-v" target="_blank" data-smartkarma-citation="entities:21010:1" rel="noopener">Ferrari N.V. (RACE US)</a> should be acting more like Shimano. The valuation discount between the two is as wide as ever</li>
</ul>


Shimano's stock price has declined by 25% year to date on expectations that bike sales will soon start going downhill
We model a GFC-style recession and find that Shimano's valuation has already reflected the worst case scenario
If we are heading for a collapse, then Ferrari N.V. (RACE US) should be acting more like Shimano. The valuation discount between the two is as wide as ever


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) | 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

Japan Weekly | 3 Growth Stocks to Buy on the Dip

No major movers to highlight over the past week as investors pay more attention to the World Cup. We highlight 3 growth stocks that have...

Mark Chadwick

Shimano (7309) | Six Reasons to Stay Bullish

Shimano’s stock price declined by 6% today on a broker downgrade, citing a slowdown in Europe. We highlight 6 reasons to stay bullish

Mark Chadwick

European Recession - 3 Japanese Stocks to BUY for a Rebound

European stocks have sold off on rising recession risks. We believe that governments will respond with aggressive fiscal measures and Japanese...

Mark Chadwick

Shimano (7309) | Join the Race

We remain bullish on Shimano. The market is assuming that sales and profits collapse next year. We think that valuations already reflect a worst...

Mark Chadwick

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