Shimano - Thesis Tracking, FY2022 Results Review

Better-than-expected FY2022 results, improved corporate governance and capital allocation policy, fair value upgrade.

Hi everyone,

Just a shorter post to review Shimano’s FY2022 results that recently came out on Valentine's Day, Feb 14th. Please, read here for the initial detailed company analysis, including the market position, competition, risks, and valuation.

Skip the following paragraph if you are already familiar with the company.

Shimano’s primer

Shimano (7309.T, SMNNY) is the world's largest bicycle parts and second-largest fish tackle manufacturer, commanding about 70% of the bike market and 20% of the fishing tackle market. It’s a rare company that benefits from scale and differentiation advantages over competitors by operating the most advanced manufacturing capability, the broadest product range, and the largest distribution network.

Free cash flow per share (FCF/share) has expanded at a 17% CAGR in the past decade (15% in the past 15 years) and returned 24% CAGR on invested capital (22% in the past 15 years).

Today, the company is still headed by the same family and driven by the same mission, ‘focusing on customer happiness and bringing them closer to nature.’ And the future looks bright as eco-friendly transportation and outdoor leisure activities become more central to our lives.