发帖
雷达卡
Machinery sector
(tools and machine tools)
ASSUMING COVERAGE
’96 turning point’ still far off; we rate Okuma
OUTPERFORM and OSG UNDERPERFORM
■ To date, we have issued three machinery sector reports: six infrastructurerelated
firms (18 March), five auto-related consumables (1 April), and six
factory automation (FA) related firms (10 April). In this report, we assume
coverage of four tool and machine tool (T&MT) companies.
Okuma (6103): Upgrade to OUTPERFORM from Underperform; raise TP to
¥600 from ¥290 (potential upside: +50%, page 20)
OSG (6136): Downgrade to UNDERPERFORM from Neutral; lower TP to
¥480 from ¥1,100 (potential downside: -20%, page 24)
Mori Seiki (6141): Upgrade to NEUTRAL from Underperform; raise TP to
¥1,100 from ¥560 (page 28)
Amada (6113): Maintain NEUTRAL; raise TP to ¥600 from ¥420 (page 32)
■ The conclusions we draw can be summarized with three points. (1) For
machine tools, the timing for orders bottoming out coincides with that of
auto-related consumables – that is, in tandem with the industrial production
(IP) index bottoming out. In other words, we estimate orders bottomed out in
Feb-Mar 2009, and now anticipate them turning up MoM. (2) As capital
goods, however, their recovery thereafter is likely to lag the IP index by 6-12
months, for MoM growth to turn positive from January 2010. (3) Given the
‘replacement cycle’ (Japan 16-year, overseas 8-year), the machine tool
‘golden cycle’, and the ‘Toyota cycle’, we look for a steady recovery and
forecast orders will next peak in FY3/14 at ¥760bn.
■ We upgrade Okuma from Underperform to OUTPERFORM setting our TP at
¥600 (potential upside 50%) as the issue is looking like an acute laggard,
while cost-saving effects, including the streamlining of a number of plants
have yet to be priced into the shares. We also upgrade Mori Seiki from
Underperform to NEUTRAL, setting our TP at ¥1,100; however, we believe
the positive factors are already factored into the share price. For Amada,
earnings and share price leading indicators are beginning to show signs of
recovery, which is positive. However, as the share price already looks
relatively high, we maintain our NEUTRAL rating, while setting our TP at
¥600. OSG could announce an approximate ¥3bn OP deficit at the 2Q
results announcement in mid-July. We downgrade OSG from Neutral to
UNDERPERFORM, lowering our TP to ¥480 (potential downside 20%).
Table of contents
Investment strategy 4
Continue to favor laggards; machine tool orders have bottomed out and we estimate
next peak in FY3/14 at ¥760bn 4
Share price performance of four subsectors 5
Favor auto-related consumables and machine tools for Apr-Jun; FA-related for Jul-Sep;
infrastructure-related for Oct-Dec 5
Reasons for our preferred picks 6
Upgrade Okuma to OUTPERFORM, and Mori Seiki to NEUTRAL, downgrade OSG to
UNDERPERFORM 6
Capex and machine tool orders 8
Order trend likely more robust than consensus view 8
(1) Estimate machine tool orders bottomed out in Feb-Mar 2009 8
(2) ‘96 turning point’ rule 9
(3) Number of Toyota engine projects to recover in 2010 10
(4) Machine tool ‘golden cycle’ to remain relatively firm 11
(5) Forecast FY3/14 peak in orders based on replacement cycle 11
Quarterly earnings of four companies 13
Expect earnings recovery to be last among four subsectors 13
Valuations 15
TPs based on ROIC model 15
Risks 18
Upside – better-than-expected impact from easing in production cuts; downside –
prolonged decrease in capex, greater price competition 18
Individual companies 19
Okuma Corp (6103 / 6103 JP) 20
Upgrade to OUTPERFORM; focus on relative delay in share price upturn 20
OSG (6136 / 6136 JP) 24
Downgrade to UNDERPERFORM; distribution inventory holds back recovery 24
Mori Seiki (6141 / 6141 JP) 28
Upgrade to NEUTRAL, but good news appears priced in 28
Amada (6113 / 6113 JP) 32
Relative share price appears overvalued; maintain NEUTRAL rating 32
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