Industrials
Mio Kato still expects a profit collapse as frothy conditions sets the stage for a big disappointment - Mio believes concern regarding China could be the initial catalyst to drive the stock down and could be followed by suspensions or delays in EV and battery capex as raw material price increases start to hit financial statements. Mio no longer considers Fanuc to be superior to peers and actually views its long-term growth outlook to be impaired vs. Yaskawa. The stock remains an extremely attractive short - at 10x ¥110bn in operating profit Fanuc’s implied TP would be ¥8,783 (60% downside).
Edition: 134
- 29 April, 2022
Industrials
Mio Kato correctly predicted that Robomachine sales would collapse (Q/Q) and sees further downside risk to management’s new guidance. Fanuc’s downgrade also goes against the grain of Yaskawa and Nidec revising up their forecasts. Although there was some good news re. Factory Automation (FA), Mio believes investors should be nervous. He is increasingly confident that the peak is in for the FA sector (Keyence only company which will see growth next year, but too expensive); recommends a rotation into construction machinery.
Edition: 123
- 12 November, 2021
Asia’s Covid Woes & Global Supply Chain Implications
Autos / Industrials
More Asian countries are currently under some form of lockdown than at any point in the past year. This includes Taiwan, Thailand and Vietnam - all key source countries for global supply chains. SRR’s contacts in the Automotive and Automation industries now expect supply chain bottlenecks to persist for the remainder of the year with Logistics contacts expecting air and ocean freight to remain tight through to June 2022! SRR’s top picks for China exposure in H2 include Otis, ABB, Schneider Electric, Siemens, Yaskawa, Fanuc, Aptiv, Nio and Volkswagen.
Edition: 116
- 06 August, 2021