Analyst Note| Kazunori Ito |
Canon’s September quarter revenue was 12.7% down from the previous year, which was in line with our forecast of a 12.0% decline, making a steady recovery from a 25.7% decline in the June quarter. While we expect it may still take a few quarters for the demand for copiers and medical systems to fully recover, we are encouraged that its major products made solid progress from the previous quarter. For instance, the revenue of copiers improved to 19.3% down year on year in the September quarter from 40.1% down in the June quarter as people started returning to offices; cameras revenue improved to 16.0% down year on year from 54.6% down in the previous quarter as its brand new full-frame sensor cameras EOS R5 and R6 made a robust launch; and revenue of inkjet printers grew 20.9% year on year, up from 13.9% in the previous quarter because of the increasing home printing demand, owing to the remote working and online education measures. Given the recovery, we believe that Canon’s current share price, which is 0.75 times price/book and has a 4.5% dividend yield, is undervalued.