Briefing: may see growth even in tough conditions, rise in capital efficiency

研报英文原文证据摘录

Briefing: may see growth even in tough conditions, rise in capital efficiency

19 May 2026

Tokyo Intraday Comment

Autos and Auto Parts Nifco (7988)

Rating: Buy

Price Objective: ¥5,650

Company Note This report gives our main impressions and views on the new medium-term management

Share price: ¥4,535 (18 May) plan announced by Nifco at its 19 May (10:00am JST) FY3/26 results briefing. The

Senior Analyst: Tairiku briefing was also an opportunity to learn more about the company’s results (released on

Sakaguchi 14 May; see our results note) and its 2035 vision (see results materials and medium-

term plan materials). Our main takeaways from the new medium-term plan, which

runs through FY3/29, are as follows. 1) Despite tough business conditions that do

not bode well for growth in automobile production volume, we expect the company’s

sales to expand steadily and at a higher rate than the sector average owing to factors

such as increase in the unit price of components supplied per vehicle, rise in new

sales, and expansion in the bed business. 2) The company targets OPM of 14.5% in

FY3/29 and 15% in FY3/35, but we see potential for these targets to be exceeded,

even allowing for growth investments, if it can achieve its sales targets and make

improvements in manufacturing efficiency. 3) Nifco has reaffirmed its policy of prioritizing

growth investments while avoiding excessive retention of earnings in favor of allocating

funds to shareholder returns, a move that is likely to be viewed favorably in terms of

both growth and improved capital efficiency. 4) The share price was down as of 2:00pm

on 19 May, which we believe likely indicates that the stock market saw the details of

the briefing as lacking in surprises and therefore lackluster. However, we see this as an