Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Securities analyst covering electronics, precision equipment & robotics, engineering, construction, transport and other sectors for more than 25 years in Japan and 3 years in Korea. Permanent resident of Japan.

Senior Technology Analyst, Japanese Equities

🇯🇵 JAPAN • Revisions 03/​​​​​​25 > Misumi & J. Front Retailing

Misumi Group (9962): Muted Response to Upward Revision

🇯🇵 JAPAN • Results & Revisions 03/​​​​​​​26 - Demae-Can, Life, Odakyu Electric Railway

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

In the nine months to December, Misumi Group achieved 84% of full-year FY Mar-21 operating profit guidance and 82% of net profit guidance. Guidance was left unchanged, pointing to an upward revision later this quarter.Only 74% of sales guidance was achieved, underlining the effectiveness of management's efforts to cut costs. In 3Q, consolidated operating profit was up 31.9% year-on-year on a 1.3% increase in sales, after six straight quarters of declines. The operating margin was 10.5% in 3Q, the highest since 4Q of FY Mar-19.Misumi Group's share price has regained its January 2018 high and is now selling at 69x management's EPS guidance for FY Mar-21, 40x the peak EPS reported in FY Mar-18, and 33x what EPS would be if peak sales were regained with peak operating margins and a normal tax rate.The shares look overbought, but not to an outstanding degree. The anticipated upward revision to guidance may bring an opportunity to take profits.

In the nine months to December, Misumi Group achieved 84% of full-year FY Mar-21 operating profit guidance and 82% of net profit guidance. Guidance was left unchanged, pointing to an upward revision later this quarter.Only 74% of sales guidance was achieved, underlining the effectiveness of management's efforts to cut costs. In 3Q, consolidated operating profit was up 31.9% year-on-year on a 1.3% increase in sales, after six straight quarters of declines. The operating margin was 10.5% in 3Q, the highest since 4Q of FY Mar-19.Misumi Group's share price has regained its January 2018 high and is now selling at 69x management's EPS guidance for FY Mar-21, 40x the peak EPS reported in FY Mar-18, and 33x what EPS would be if peak sales were regained with peak operating margins and a normal tax rate.The shares look overbought, but not to an outstanding degree. The anticipated upward revision to guidance may bring an opportunity to take profits.

ミスミグループ（9962 JP）：第3四半期決算が好調で上方修正へ