Japan Experts, Extraordinary Performance, Astris Advisory Japan

Astris Advisory Japan

Japan Experts, Extraordinary Performance

Our Corporate Advisory service is designed to give clients access to a wider range of investors. These include Japan specialists as well as global investors. The goal is to help achieve a fair equity valuation.

Equity Bottom-Up

<ul><li>It has been an active 12 months for Sodick as it delivered a strong turnaround in FY12/24 driven by structural reform, appointed new President and CEO Yuji Akutsu, and affirmed growth prospects on both the Food Machinery segment and new products such as laser processing machines, metal 3D printers, and ultra-high-precision machining centers.</li><li>Ongoing structural reforms focus on reducing reliance on China, enhancing profitability through business and product selection based on market dynamics, and rebuilding global production and sales systems to adapt to yen depreciation and evolving customer demand.</li><li>Overseas expansion and providing “turnkey” solutions remain high priorities to build sustainable growth.</li></ul>

It has been an active 12 months for Sodick as it delivered a strong turnaround in FY12/24 driven by structural reform, appointed new President and CEO Yuji Akutsu, and affirmed growth prospects on both the Food Machinery segment and new products such as laser processing machines, metal 3D printers, and ultra-high-precision machining centers.Ongoing structural reforms focus on reducing reliance on China, enhancing profitability through business and product selection based on market dynamics, and rebuilding global production and sales systems to adapt to yen depreciation and evolving customer demand.Overseas expansion and providing “turnkey” solutions remain high priorities to build sustainable growth.

Sodick (6143) - From Turnaround to Transformation Towards Growth

<ul><li>A turnaround in progress – Q1-4 FY12/24 results were significantly ahead of guidance and a positive surprise, showing a solid recovery YoY with 9.7% sales growth YoY and a return to positive earnings territory.</li><li>This indicates solid execution of structural reforms, with fixed costs being reduced by streamlining overseas staff and internalizing parts production that were previously outsourced.</li><li>An uptick in demand in Q4 FY12/24 for both Machine Tools and Industrial Machinery was driven by connectors used in high-density fiber optic connections in the data center and telecommunications sectors. </li></ul>

A turnaround in progress – Q1-4 FY12/24 results were significantly ahead of guidance and a positive surprise, showing a solid recovery YoY with 9.7% sales growth YoY and a return to positive earnings territory.This indicates solid execution of structural reforms, with fixed costs being reduced by streamlining overseas staff and internalizing parts production that were previously outsourced.An uptick in demand in Q4 FY12/24 for both Machine Tools and Industrial Machinery was driven by connectors used in high-density fiber optic connections in the data center and telecommunications sectors. 

Sodick (6143 JP) - Signalling a Positive Shift

<ul><li>Reforms transforming returns – Although the demand environment remains somewhat mixed, we believe that demand has bottomed for the key product Electronic Discharge Machines.</li><li>Q1-3 FY12/24 results highlighted that definitive progress is being made in terms of raising returns through structural reforms.</li><li>This focus on raising profitability can be seen through upselling activities and improved factory utilization.</li></ul>

Reforms transforming returns – Although the demand environment remains somewhat mixed, we believe that demand has bottomed for the key product Electronic Discharge Machines.Q1-3 FY12/24 results highlighted that definitive progress is being made in terms of raising returns through structural reforms.This focus on raising profitability can be seen through upselling activities and improved factory utilization.

Sodick (6143 JP) - Key Metrics Point to Recovery and Upside

<ul><li>Q1-2FY12/24 results were a positive surprise in our view.</li><li>Quarterly Q2 FY12/24 OPM of 4% returned to positive territory after four consecutive quarters of losses, driven by a combination of price hikes, revision to the product line-up to improve sales mix, restructuring measures, and sales volume expansion with a marked jump in China demand for electronic discharge machines.</li><li>We believe Sodick has begun to transform to become more resilient and operationally efficient. </li></ul>

Q1-2FY12/24 results were a positive surprise in our view.Quarterly Q2 FY12/24 OPM of 4% returned to positive territory after four consecutive quarters of losses, driven by a combination of price hikes, revision to the product line-up to improve sales mix, restructuring measures, and sales volume expansion with a marked jump in China demand for electronic discharge machines.We believe Sodick has begun to transform to become more resilient and operationally efficient. 

Sodick (6143) - An Upbeat Result Reflecting Transformational Efforts

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec Corp (6594 JP)</a> has launched its offer for <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a> at an unchanged JPY11,000. The offer is open from 4 April to 21 May.</li>
<li>The offer was launched despite securing all regulatory approvals and the Board's postponement request. The launch could also be an attempt to thwart a competing proposal.</li>
<li>Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high probability of a competing proposal.</li>
</ul>



Nidec Corp (6594 JP) has launched its offer for Makino Milling Machine Co (6135 JP) at an unchanged JPY11,000. The offer is open from 4 April to 21 May.
The offer was launched despite securing all regulatory approvals and the Board's postponement request. The launch could also be an attempt to thwart a competing proposal.
Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high probability of a competing proposal.


Makino Milling Machine (6135 JP): Nidec Launches Its Offer

Japan

Sodick Co., Ltd. develops, manufactures, and sells electric machines and equipment.  The Company's product line includes computerized numerical control electrical discharge machine (EDM), super high precision wire cut EDM, CAD/CAM system for mold design and production, injection molding machine, and high speed manual drilling machine.

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Sodick Co Ltd (6143 JP)

Sodick (6143) - From Turnaround to Transformation Towards Growth

Ongoing structural reforms focus on reducing reliance on China, enhancing profitability through business and product selection based on market...

Astris Advisory Japan

Sodick (6143 JP) - Signalling a Positive Shift

Q1-4 FY12/24 results were significantly ahead of guidance and a positive surprise, showing a solid recovery YoY with 9.7% sales growth YoY and a...

Astris Advisory Japan

Sodick (6143 JP) - Key Metrics Point to Recovery and Upside

Although the demand environment remains somewhat mixed, we believe that demand has bottomed for the key product Electronic Discharge Machines.

Astris Advisory Japan

Sodick (6143) - An Upbeat Result Reflecting Transformational Efforts

Q1-2FY12/24 results were a positive surprise in our view. Quarterly Q2 FY12/24 OPM of 4% returned to positive territory after four consecutive...

Astris Advisory Japan

Makino Milling Machine (6135 JP): Nidec Launches Its Offer

Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high...

Arun George

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