Takeaways from small meeting with outside directors

研报英文原文证据摘录

Takeaways from small meeting with outside directors

Forecast returns

Forecast price appreciation 56.8%

Forecast dividend yield 1.6%

Forecast stock return 58.4%

Market return assumption 7.8%

Forecast excess return 50.6%

Company Description

Established in 1951, the company has a 60%+ global share for small diameter ball bearings. It

has integrated production spanning in-house parts processing to assembly, and also

manufactures overseas (Thailand, China, the Philippines, Cambodia, etc). It makes motor-

related products (auto, HDD, fan and stepping motors, etc.) as well as electronics, including

LED backlights and camera actuators. In Jan 2017 it merged with machinery parts maker

Mitsumi Electric, changing its name to MinebeaMitsumi. It recently stepped up M&A, making

auto parts firm U-Shin a subsidiary in Apr 2019 and analog IC firm ABLIC in Apr 2020.

Valuation Method and Risk Statement

Our price target is based on SOTP and PER. Risks include deterioration in the global PMI

alongside a sharp slowdown in the global economy, rapid appreciation of the Thai baht, and a

negative impact on the company’s production from stepped up demonstrations in Thailand.

Labour costs could rise at manufacturing bases in China, Thailand, and Cambodia.

Smartphone production could face delays from sluggish conditions. Automobile production

could decline. A rapid contraction in hard disc drive production is a potential risk. Two of the

newly merged company’s biggest clients are a major Japanese game console maker and a

leading North American smartphone producer. A sharp slowdown in sales to these firms is a

risk that needs to be monitored. Changes in competitive conditions or the emergence of

software-driven alternative technologies in the camera actuator field (VCM/OIS) is another