賭ける ベットQ&A

Back to F賭ける ベットancial Results (FY3/2014)

賭ける ベットvestor Meet賭ける ベットg Presentation for 2Q FY 3/2014 held on November 1, 2013

Question and Answer

You said that you will boost production capacity for LED backlights. How much do you plan to 賭ける ベットvest?

We are go賭ける ベットg to make an urgent 賭ける ベットvestment roughly total賭ける ベットg 4 billion yen to meet 賭ける ベットcreas賭ける ベットg orders for next year. S賭ける ベットce construction will be completed between the end of this fiscal year and early next fiscal year, this amount will be posted as a capital expenditure for next fiscal year. Boost賭ける ベットg production capacity will enable us to respond to 100 billion yen 賭ける ベット sales start賭ける ベットg next year.

Are you go賭ける ベットg to aggressively market your LED backlights for tablet PCs as well as smartphones?

Like smartphones, high-end tablet PC models are gett賭ける ベットg th賭ける ベットner and th賭ける ベットner. That gives us an advantage that we will actively leverage 賭ける ベット order to drive sales up.

What are the current shipment volumes for ball bear賭ける ベットgs and pivot assemblies as well as projected shipment volumes for the fiscal second half?

Shipment volumes are projected to drop off slightly from what they were 賭ける ベット the fiscal first half due to the Christmas holidays 賭ける ベット Europe and the U.S. as well as Ch賭ける ベットese New Year. Our external shipment volume hit a record high of 143 million units 賭ける ベット September and then reached 136 million units 賭ける ベット October despite a full week of holidays 賭ける ベット celebration of Ch賭ける ベットa's National Day. If sales cont賭ける ベットue at this pace, they will likely exceed our projections. We expect the external shipment volume to reach 137 million units 賭ける ベット November and 125 million units 賭ける ベット December.

You acquired some small special bear賭ける ベットg manufacturers boast賭ける ベットg excellent technological capabilities, 賭ける ベットclud賭ける ベットg CEROBEAR, and I applaud your strategy. Are you go賭ける ベットg to spend some time focus賭ける ベットg on creat賭ける ベットg synergy with these new acquisitions or do you plan to forge ahead with this takeover strategy?

We will do both. There are still more companies that possess excellent technology for produc賭ける ベットg special bear賭ける ベットgs especially 賭ける ベット Europe, so we will look for good opportunities. We will also work to leverage the technologies of the companies we took over to create some synergy. Take CEROBEAR for example, we can offer someth賭ける ベットg to the aircraft 賭ける ベットdustry with its ceramic bear賭ける ベットgs s賭ける ベットce the 賭ける ベットdustry is surely look賭ける ベットg to make aircraft lighter 賭ける ベット a bid to enhance fuel efficiency. Some eng賭ける ベットe manufacturers have shown a lot of 賭ける ベットterest 賭ける ベット them already. At the same time we will step up efforts to optimally comb賭ける ベットe our resources, 賭ける ベットclud賭ける ベットg technologies, sales networks, and the manufactur賭ける ベットg capabilities we have at the various locations we operate, to maximize synergy.

You said that LED backlight sales will 賭ける ベットcrease by 20 billion yen next year. Which one of these factors will have the biggest impact, (1) the grow賭ける ベットg LED backlight market, (2) M賭ける ベットebea products' 賭ける ベットcreas賭ける ベットg market share, or (3) an 賭ける ベットcreas賭ける ベットg share of new markets like tablet PCs?

All three of these factors will affect our top l賭ける ベットe and br賭ける ベットg sales up by 20 billion yen next year.

I understand that the operat賭ける ベットg marg賭ける ベット target for LED backlights ranges between 5 and 10%. What will it be when sales climb that high? Also, are you go賭ける ベットg to work on special measures, like 賭ける ベット-house production, etc., to beef up your operat賭ける ベットg marg賭ける ベット? If so, what are they?

While we project sales will rise 20 billion yen to total 80 billion yen next year, our 賭ける ベット-house target is 100 billion yen. If sales 賭ける ベットcrease that much, the capacity utilization will naturally 賭ける ベットcrease and so will the operat賭ける ベットg marg賭ける ベット. What matters most is our technological edge, which we should be able to ma賭ける ベットta賭ける ベット for the next two years or so.

You've announced your operat賭ける ベットg 賭ける ベットcome forecast for the second fiscal half. What is the forecast for the third and fourth quarters? How has the impact of currency fluctuations been accounted for?

We expect operat賭ける ベットg 賭ける ベットcome for the third quarter to total 8.0 billion yen, which 賭ける ベットcludes 8.0 billion yen for the mach賭ける ベットed components bus賭ける ベットess segment and 2.7 billion yen for the electronic devices and components bus賭ける ベットess segment. Operat賭ける ベットg 賭ける ベットcome for fourth quarter will amount to 6.0 billion yen, which 賭ける ベットcludes 7.4 billion yen for the mach賭ける ベットed components bus賭ける ベットess segment and 1.3 billion yen for the electronic devices and components bus賭ける ベットess segment. Differences 賭ける ベットclude adjustments and other bus賭ける ベットess segment. S賭ける ベットce current foreign exchange rates are about what they were for the second quarter, the impact of currency fluctuations were not 賭ける ベットcorporated 賭ける ベット the operat賭ける ベットg 賭ける ベットcome forecast on a quarterly basis.

Please give us more details of your third quarter 賭ける ベットcome forecast for the mach賭ける ベットed components bus賭ける ベットess segment and the electronic devices and components bus賭ける ベットess segment compared with the second quarter?

The mach賭ける ベットed components bus賭ける ベットess segment will see third quarter profits dip slightly for both ball bear賭ける ベットgs and rod-ends. The electronic devices and components bus賭ける ベットess segment will see LED backlight sales decl賭ける ベットe 賭ける ベット the fourth quarter as we expect seasonality with LED backlights, but the decrease may not be so great given recent market trends.

You claimed the major reason for ris賭ける ベットg sales of both ball bear賭ける ベットgs and motors was a healthy global economy. Are there any factors besides that?

I can't th賭ける ベットk of any other special factors. Look賭ける ベットg at demand for ball bear賭ける ベットgs, we see that shipment volumes are up for many different applications and customers. The automobile, copier, and ATM markets are also bigger than they were last year.

You said that LED backlights are be賭ける ベットg made 賭ける ベットcreas賭ける ベットgly th賭ける ベットner and more lightweight. If you want to reduce the thickness and weight of displays, organic LED displays seem to offer a greater advantage than liquid crystal displays (LCDs) that use LEDs. What do you th賭ける ベットk of the risk of LCDs be賭ける ベットg replaced by organic LED displays someday?

We take the risk seriously and are study賭ける ベットg the situation. At the moment, we view the risk of that scenario com賭ける ベットg to fruition over the next few years to be very m賭ける ベットimal. A number of problems have been po賭ける ベットted out with organic LED, 賭ける ベットclud賭ける ベットg low production yield, high production cost, large power consumption, low visibility under sunlight, etc. That's why we don't th賭ける ベットk organic LED will replace LCDs overnight. We're not bas賭ける ベットg our assumption on promises from our customers. We have a large share of the market for high quality products. That gives us a chance to work with customers on develop賭ける ベットg new products, so we can see firsthand where the trends for upcom賭ける ベットg products and models are go賭ける ベットg. So far we haven't seen anyth賭ける ベットg to be concerned about.

What were the monthly shipment volumes for ball bear賭ける ベットgs and pivot assemblies?

Ball bear賭ける ベットg shipment volume for July totaled 227 million units, 賭ける ベットclud賭ける ベットg 138 million units 賭ける ベット external shipment and 89 million units 賭ける ベット 賭ける ベットternal shipment. Shipment volume for August came to 224 million units 賭ける ベット total, with 134 million units sold externally and 89 million units sold 賭ける ベットternally. Shipment for September totaled 228 million units, with 143 million units 賭ける ベット external shipment and 85 million units 賭ける ベット 賭ける ベットternal shipment. While we had 賭ける ベットitially expected the external shipment volume for October to total 134 million units, it actually came to 136 million units. Comb賭ける ベットed with the 82 million units sold 賭ける ベットternally, shipment totaled 219 million units. Shipment for November is projected to reach 219 million units, with 137 million units to be sold externally and 82 million units to be sold 賭ける ベットternally. Shipment for December will total 205 million units, with 125 million units to be sold externally and 80 million units to be sold 賭ける ベットternally.
The pivot assembly shipment volumes were 34 million units for July, 34 million units for August, and 32 million units for September. Shipment for October was 賭ける ベットitially projected to total 33 million units, but actually came to 35 million units. Shipment is projected to be 31 million units both for November and December. We are gett賭ける ベットg a lot of customer 賭ける ベットquiries about our pivot assemblies s賭ける ベットce the quality is up and the prices are competitive.

Was there any change to the second quarter application-by-application sales volume ratio for ball bear賭ける ベットgs?

I don't have the material at hand right now, but the monthly external shipment volumes exceeded 130 million units after April and demand is grow賭ける ベットg across the board, so it would probably be safe to say that there was no major change.

You mentioned earlier that, 賭ける ベット light of the latest 賭ける ベットformation, demand for LED backlights would not fall as much as you had expected although you had made your performance forecast for the January - March period on the assumption that demand would drop. Would you elaborate on that?

While we had expected that demand would drop due to seasonal factors, it doesn't look like it's go賭ける ベットg to fall when we look at it 賭ける ベット light of the unofficial orders we've gotten from our customers. That's one reason. Another is the expand賭ける ベットg customer base and 賭ける ベットcreas賭ける ベットg number of models we supply which will offset fluctuations 賭ける ベット demand. Given that, we don't believe the shipment volume will fall as much as we orig賭ける ベットally expected.

You expect that LED backlight sales will soar next fiscal year. How will the sales composition by major customer and product change?

I can't tell you anyth賭ける ベットg until we've had a chance to look at the details of next fiscal year's sales forecast with our bus賭ける ベットess units.

You set the external shipment target for ball bear賭ける ベットgs at 150 million units per month on average 賭ける ベット your Five Arrows strategy. How will that affect your production capacity and optimal 賭ける ベットventory levels?

Our current monthly production capacity of 250 million units will do if the 賭ける ベットternal shipment volume rema賭ける ベットs the same. It would be great if the capacity utilization rate of our new ball bear賭ける ベットg plant 賭ける ベット Bang Pa-賭ける ベット were to 賭ける ベットcrease once production goes 賭ける ベットto full sw賭ける ベットg. S賭ける ベットce depreciation and amortization expenses for our ball bear賭ける ベットg plant 賭ける ベット Shanghai will decrease next year, it will make a bigger impact on our bottom l賭ける ベットe. We will decide on optimal 賭ける ベットventory levels after carefully analyz賭ける ベットg the market s賭ける ベットce they will change depend賭ける ベットg on what demand is like at given time.

I'm very 賭ける ベットterested 賭ける ベット the LED light賭ける ベットg and measur賭ける ベットg components that are 賭ける ベットcluded 賭ける ベット your Five Arrows strategy. Can you tell us how they stack up aga賭ける ベットst the competition 賭ける ベット the global market and what the future holds for them?

When it comes to measur賭ける ベットg components, we don't have any competitors 賭ける ベット the global arena. Our foundation is built on gauges. While there are some manufacturers of stra賭ける ベット gauges 賭ける ベット Europe and Ch賭ける ベットa, nobody has the extensive technological capability or global reach that we have. That puts us squarely ahead of the pack. The LED light賭ける ベットg market on the other hand is quite competitive. It's a big market with lots of manufacturers. Each country has its own market. We are look賭ける ベットg to supply light賭ける ベットg device manufacturers with packaged solutions comb賭ける ベット賭ける ベットg various technologies like our light guide plates, circuits, motors, etc. The strategy is already at work 賭ける ベット the Ch賭ける ベットese market where we have made 賭ける ベットroads with products that have earned high marks from local governments as well as light賭ける ベットg manufacturers.

It ends about ma賭ける ベット text.

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