Mabuchi Motor（6592.JP）Results above estimates， but monitoring Europe/ US auto slowdown and cost increases

Investment Rating - Neutral rating maintained with a price target of ¥2,850 [4][7] Core Insights - The report indicates that Mabuchi Motor's Q2 operating profit (OP) was ¥5.3 billion, exceeding forecasts by 15% and consensus by 20%, driven by a weaker yen and higher volumes in the life & industrial products segment [1][2] - Automotive electrical equipment volume in H1 FY12/24 fell 5.2% below guidance, leading to a 1.4% cut in the full FY12/24 volume outlook, which is projected to grow by 1.3% year-on-year [2] - Management noted intensified competition in China, while market share in the US and Europe remains stable due to competitor withdrawals [2] - Manufacturing-related costs are expected to exceed initial estimates by ¥2.2 billion, influenced by delayed productivity improvements and rising overseas personnel costs [2] - The company's FY12/24 OP guidance was slightly raised from ¥18.8 billion to ¥18.9 billion, reflecting positive H1 performance [3] Summary by Sections Financial Performance - Q2 OP margin improved from 8.6% in Q1 to 10.5% in Q2, attributed to higher volumes, a weaker yen, price increases, and a better product mix [1] - The forecast for automotive electrical equipment volume in Q3 is an 8% quarter-on-quarter increase, but a decline of 8% is budgeted for Q4 [3] Valuation Metrics - The report provides a valuation based on a FY12/24E price-to-earnings ratio (PER) of 23X, with a current share price of ¥2,252 [4][7] - Forecast price appreciation is estimated at 26.6%, with a dividend yield of 3.6%, leading to a total forecast stock return of 30.2% [10] Company Overview - Mabuchi Motor, founded in 1954, has shifted its focus from consumer electronics to automotive products, with automotive electronics now accounting for nearly 70% of sales [11]