2024-07-25 18:16:16 ET
Summary
- Things had been decelerating for Nippon Sanso Holdings Corporation to the end of the FY 2024 fiscal year on the back of moderating gross profits due to tougher electricity price comps, a key input.
- The next year will be back to more normal trends, with hopes of a resumption in growth in their electronics, namely memory end markets.
- No sign of pickup yet, but end markets tend to be responsive in electronics.
- Otherwise, Nippon Sanso expects modest volume and price growth into next year to counter labour inflation, resumed volumes, new Diborane production, and continued electricity price moderation.
- Good relative valuation case to Air Liquide with the possibility that leverage (going down at NS) explains the otherwise strange discount.
Nippon Sanso Holdings Corporation ( TYNPF ) had a remarkable year due to the lower electricity prices as addressed in our previous articles . Really, utility costs have been the whole story for Nippon Sanso lately. Going forward, with no extreme spikes in electricity prices expected, forecasts are mainly focused on the hoped-for recovery in electronics. This is one of the company's major markets for industrial gas, and limited demand reduction in other areas where pressure on the industry might start taking its toll. While neither will stand out much as forecasts assume pretty limited growth, some price hiking may be needed to counter lesser elements of the cost structure such as labor inflation. We don't expect major deviations from the forecast, as the business is generally resilient....
Read the full article on Seeking Alpha
For further details see:
Nippon Sanso: Hoping For Responsive Pickup In Memory Production