Thanks! I don’t know how much new will be in the securities report as we already know the full year earnings etc. If there is anything material, I will leave a comment on here. I don’t plan to write about every incremental development though.
Is that an earnings updated I see on the IR website? If the translation is correct then it's upgrading things. Does this mean your thesis is playing out as predicted?
Great research, but a too complicated narrative for my taste. Many moving parts. I try to look at only 4-5 metrics and simplicity in the company process.
Great writeup thanks! This one does look attractive. I noticed they have almost their entire market cap in inventory, which has been surging for a few years now, even prior to the Denso contract. Do you know what's behind that?
Thanks for the kind words! As Mitachi is a distribution company, it needs to keep quite a bit of inventory on hand. At the end of May, the company had ¥7.23B in inventory versus full-year sales of ¥38.9B. As you mention, the inventory ratio is slightly higher than in previous years. I don't have a definitive answer for why - but I suspect this is due to two reasons:
1) Mitachi had a slower FY24 (after a very good FY23 and FY22), so they may have had extra inventory on hand.
2) As sales are expected to more than double over the coming year, Mitachi requires more working capital, so they may be building up inventory.
Great article. Do you plan to follow up/update after their securities report later this month?
Thanks! I don’t know how much new will be in the securities report as we already know the full year earnings etc. If there is anything material, I will leave a comment on here. I don’t plan to write about every incremental development though.
Any update on this one? Any concerns about the increase in inventory and debt and whether the growth will have enough return on that?
I covered those issues in the write up. I still like this position, but it is not without risk.
Nice write-up. Do you usually reach out to customers and employees in your research?
Hey General
Is that an earnings updated I see on the IR website? If the translation is correct then it's upgrading things. Does this mean your thesis is playing out as predicted?
Awesome work and write up!!
It's a bit too early to tell, but yes the recent earnings upgrade is a positive signal.
where do you buy the japan company handbook from?
I've bought them on Amazon. Unfortunately the publisher, Toyo Keizai, recently announced they would stop publishing the paper handbook. Here's a link I found to the most recent edition from September: https://www.amazon.co.jp/-/en/%E6%9D%B1%E6%B4%8B%E7%B5%8C%E6%B8%88%E6%96%B0%E5%A0%B1%E7%A4%BE/dp/B0DBL1TYNC/
Great research, but a too complicated narrative for my taste. Many moving parts. I try to look at only 4-5 metrics and simplicity in the company process.
Nice writeup! Will put this in my watchlist. Thanks.
Great writeup thanks! This one does look attractive. I noticed they have almost their entire market cap in inventory, which has been surging for a few years now, even prior to the Denso contract. Do you know what's behind that?
Thanks for the kind words! As Mitachi is a distribution company, it needs to keep quite a bit of inventory on hand. At the end of May, the company had ¥7.23B in inventory versus full-year sales of ¥38.9B. As you mention, the inventory ratio is slightly higher than in previous years. I don't have a definitive answer for why - but I suspect this is due to two reasons:
1) Mitachi had a slower FY24 (after a very good FY23 and FY22), so they may have had extra inventory on hand.
2) As sales are expected to more than double over the coming year, Mitachi requires more working capital, so they may be building up inventory.
Thanks very much for the response. Makes sense. I appreciate the coverage of this name - have never seen anybody write about it before.