Earnings recovery via streamlining and restructuring already priced in: Benefiting from shift to LED headlamps and increased value-added in decorative lighting for autos in India

Research evidence excerpt

Earnings recovery via streamlining and restructuring already priced in: Benefiting from shift to LED headlamps and increased value-added in decorative lighting for autos in India

the end of production at Fuzhou Koito, which had supplied Japanese OEMs. Demand Source: LSEG, Nomura

from Chinese OEMs also looks weak owing to the economic slowdown and cuts to government Performance / Stock price data

subsidies for new energy vehicles. However, we expect sales in India to grow from 27/3. We (%) 1M 3M 12M

forecast sales rising ¥6.0bn y-y to ¥37.0bn thanks to a contribution of around ¥3.0bn from Absolute returns 3.1 4.0 53.9

increased sales to local OEMs as well as to Suzuki Motor and Toyota Motor. We forecast Relative to 1.5 -5.8 8.1

Russell/Nomura Large

strong growth in sales per vehicle in India over the medium term (CAGR of 4–5%) as we still Cap

see plenty of scope for LED headlamp uptake and Indian consumers have a preference for Market capitalization (¥bn) 836.7

decorative lighting. At the LiDAR business, the company has frozen development of new 52-week low stock price (¥) 1,703.0

products for passenger vehicles and is concentrating resources on traffic infrastructure, 52-week high stock price (¥) 2,973.0

commercial vehicles, and robotaxis in Japan. It completed the impairment of goodwill and Shares outstanding (mn) 307.8

Daily turnover (3-M avg) (¥mn) 2,555.2

production facilities at the LiDAR business in 26/3, and booked ¥14.3bn in impairment losses

Note: Market capitalization and shares

on intangible fixed assets at Cepton. The reduction in depreciation resulting from these outstanding in this table include treasury stock.

impairments, along with headcount reductions and lower development costs at Cepton, should Source: LSEG, Nomura