Following the appointment of new President Kaida Masao (戒田理夫), ニデック’s reconstruction efforts have become the market’s focus. Reports of potential impairment losses in the earnings results and business restructuring sent the share price sharply lower, followed by signs of a rebound.
The broader stock market is watching ニデック’s move toward a new management structure against the backdrop of expectations of substantial impairment charges. Through the 29th, the share price continued to decline from the previous Friday’s close of ¥2,840 to around ¥2,350, before rebounding on the 30th to close at ¥2,355 after consideration of a sale of ニデックコンポーネンツ (formerly コパル電子) was viewed as a catalyst.
With the new management team’s reconstruction efforts under scrutiny, the company is proceeding simultaneously with the resolution of past issues, including accounting irregularities, and reform of its business portfolio. Business restructuring, including the sale of subsidiaries, is attracting attention as a means of streamlining non-core businesses and improving capital efficiency.
Takayuki Naito (内藤貴之), an analyst at Citigroup Securities, pointed out that the share-price rebound may reflect the market having already priced in substantial impairment losses and a change in president. Going forward, the market is expected to focus on sales growth, profit margins, progress in structural reforms including business sales, and governance reform.
On the morning of the 30th, consideration of a sale of ニデックコンポーネンツ was effectively announced as an item under consideration. Whether this will lead to the streamlining of non-core businesses and improved capital efficiency remains a focus.