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YASKAWA Electric Corp 6506

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Currency in JPY
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Record First-Quarter Orders for Yaskawa Likely To Lead To Peak Sales Next Quarter; Raising FVE

Jason Kondo Equity Analyst

Analyst Note

| Jason Kondo |

Wide-moat Yaskawa Electric’s fiscal 2021 first-quarter earnings ending in May were in line with our expectations, but we were particularly surprised at the record orders worldwide, which we believe will lead to peak quarterly sales in the second quarter. We raise our fair value estimate to JPY 4,800 from JPY 4,600, from mainly adjusting our near-term revenue and operating margin estimates to account for higher sales of AC servo motors and robots in fiscal 2021, from record quarterly orders. Despite this, our revised fair value estimate continues to imply that Yaskawa Electric’s shares are overvalued. While high quarterly orders in China likely alleviated some market concerns over slowdown in the region, we continue to maintain our assumption that the current momentum of orders/sales will slow down in the second half of current fiscal year. Considering this factor as well as our medium-term expectations remaining intact, our fair value estimate revision is limited.

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Company Profile

Business Description

Yaskawa Electric Corporation engages in manufacturing mechatronics products, which combine electrical and mechanical systems, and has core technologies related to motion control, robotics, and power conversion. It operates mainly in Asia, the Americas, and Europe, as one of the leading players in the AC servo motor/controller, AC drives (inverter), and robotics markets. According to the company, it has the leading global share with AC Servo motors/controllers, where the company's cumulative AC servo motor shipments reached 20 million units in 2020, and it is also considered as one of the “big four” industrial robotics companies. The company was founded in 1915, and its head office is in Kitakyushu, Fukuoka Prefecture, Japan.

2-1, Kurosaki-shiroishi, Yahatanishi-ku
Kitakyushu, 806-0004, Japan
T +81 936458801
Sector Industrials
Industry Electrical Equipment & Parts
Most Recent Earnings May 31, 2021
Fiscal Year End Feb 28, 2020
Stock Type
Employees 14,892

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