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Equity Analyst, LightStream Research

Aqila Ali

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

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Equity Bottom-Up

<p>On Wednesday, <a href="https://www.smartkarma.com/entities/18703" target="_blank" data-smartkarma-citation="entities:18703:1">Denso Corp (6902 JP)</a> reported 2QFY03/19 results posting revenue growth of 11.1% YoY falling below consensus estimates by 1.4% and our estimates by nearly 4%. Further, on profitability, Denso failed to meet market expectations again posting OP down by 25.5% YoY falling below market expectations by a significant 29.3%.</p>
<p>The company mentioned that the decline in OP was mainly due to transient profit in the last fiscal year and variance of periods in collecting expenses alongside its increase in investment for future growth towards becoming a leading mobility supplier. We consider the latter to be consistent with the company’s recent moves, having witnessed the company’s business restructuring and its recent announcement on changes to the business model, aiming to focus on software-based solutions in addition to its hardware expertise.  Despite experiencing a decline in OP this quarter, Denso optimistically revises its OP guidance upwards by 0.8%. Following the release, Denso closed 2.4% down on Thursday from Wednesday’s close.</p>

On Wednesday, Denso Corp (6902 JP) reported 2QFY03/19 results posting revenue growth of 11.1% YoY falling below consensus estimates by 1.4% and our estimates by nearly 4%. Further, on profitability, Denso failed to meet market expectations again posting OP down by 25.5% YoY falling below market expectations by a significant 29.3%.
The company mentioned that the decline in OP was mainly due to transient profit in the last fiscal year and variance of periods in collecting expenses alongside its increase in investment for future growth towards becoming a leading mobility supplier. We consider the latter to be consistent with the company’s recent moves, having witnessed the company’s business restructuring and its recent announcement on changes to the business model, aiming to focus on software-based solutions in addition to its hardware expertise.  Despite experiencing a decline in OP this quarter, Denso optimistically revises its OP guidance upwards by 0.8%. Following the release, Denso closed 2.4% down on Thursday from Wednesday’s close.

덴소, 2분기 실적 시장 기대치 충족 못했는데도 영업이익 전망 상향 조정