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Sony Group Corp ADR SONY

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Solid Consumer Electronics Sales Cover Stagnant Image Sensor Sales; Lift Sony’s FVE to JPY 14,000

Analyst Note

| Kazunori Ito |

We lift Sony Group’s fair value estimate to JPY 14,000 from JPY 12,000 as we raise our revenue forecasts for the game and network services segment and the electronics products and solutions segment. On the gaming business, we now expect user migration from PlayStation 4 to PlayStation 5 to proceed much faster than we had previously expected, as we believe Sony will succeed in retaining users within its ecosystem through console compatibility and the monthly subscription program, PS Plus. In the consumer electronics business, TV’s product mix and full-frame camera’s market share are likely to exceed our previous forecast. On the other hand, we cut our revenue forecast for the imaging and sensing solutions segment as we now expect the image sensor product mix will be worse than our previous expectation--as Sony prioritizes gaining share on Chinese smartphone brands to fill the gap left by Huawei. Sony expects to supply high-end sensors to flagship models in 2022, but the improvement in product mix would be slower than we had anticipated.

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Company Profile

Business Description

Sony is a conglomerate with consumer electronics roots, which not only designs, develops, produces, and sells electronic equipment and devices, but also is engaged in content businesses, such as console and mobile games, music, and movies. Sony is a global top company of CMOS image sensors, game consoles, professional broadcasting cameras, and music publishing, and is one of the top players on digital cameras, wireless earphones, recorded music, and movies, and so on. Sony’s business portfolio is well diversified with six major business segments. The company fully consolidated Sony Financial in September 2020, which provides life and non-life insurance, banking, and other financial services.

Contact
7-1, Konan 1-Chome, Minato-ku
Tokyo, 108-0075, Japan
T +81 367482111
Sector Technology
Industry Consumer Electronics
Most Recent Earnings Jun 30, 2021
Fiscal Year End Mar 31, 2022
Stock Type —
Employees 109,700

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