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YASKAWA Electric Corp 6506

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Morningstar’s Analysis

Currency in JPY
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Strong Demand for Yaskawa’s Robots and Servo Motors Amid Increasing Uncertainties; Raising FVE

Jason Kondo Equity Analyst

Analyst Note

| Jason Kondo |

Wide-moat Yaskawa Electric continued to show strong sales in the second quarter (ending in August), similar to the previous quarter, with about 26% year-on-year top-line growth. While this was slightly lower than our expectations, we attribute this to parts procurement issues, which have made it increasingly difficult to fulfill record orders over the past two quarters. Nevertheless, we raise our fair value estimate to JPY 5,200 from JPY 4,800, as we are more convinced that Yaskawa can realize stronger sales growth both near- and medium-term. We previously believed market expectations were too high but now believe its shares are fairly valued, as they have fallen over the past month, likely due to increased uncertainties from issues ranging from the components supply crunch to signs of potential slowdown in China--like the PMI falling to 49.6 in September. Despite these signs, we expect demand for servo motors, inverters, and robots to remain strong, backed by electric vehicle, semiconductor, and new infrastructure-related investments.

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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 Aug 31, 2021
Fiscal Year End Feb 28, 2020
Stock Type
Employees 14,892