Nidec disclosed a huge impairment loss at the end of September, sending its stock to the daily limit down. This was followed by the announcement of a new management structure and the president’s resignation, putting the review of its continued listing and the restoration of financial soundness in focus. The publication of its results and submission of the Internal Management System Confirmation Letter are expected to be the next key milestones.
Nidec has pursued a growth strategy as a comprehensive motor manufacturer built around making things that move, but the reliability of its financial reporting and the outcome of the review of its continued listing are now receiving the greatest attention. Although it is pursuing growth opportunities such as liquid-cooling equipment for AI data centres, impairment losses and concerns over quality and corporate governance are undermining the foundation of its share price.
In September, reports emerged of a huge impairment loss, sending the stock to the daily limit down. This was followed shortly afterward by the announcement of a new management structure and the president’s resignation, bringing the review of its continued listing and the restoration of financial reporting integrity to the fore as its greatest challenges.
The key points to monitor going forward include the results and annual securities report to be disclosed by 30 September, and the submission of the Internal Management System Confirmation Letter expected by the end of October. Until the soundness of its financial position is confirmed, the timing of the end of the daily limit down and any recovery remains uncertain.
For determining a “buyable share price,” the analysis concludes that it is important to design one’s own approach to using indicators such as net assets, the share price in a pessimistic scenario, the cost basis of large investors and analyst forecasts.