We will analyze a hidden Japanese champion in the compact excavator and loader products and compare it with a much larger and well know Japanese champion Kubota.
Quick question shouted from the hip, could it be the improved operating margin is due to the inflation? e.i. They had cheap raw material inventory but were able to sell the new products to inflated price, but will now have to buy raw material at full price while keeping price steady.
inventory is 64B but sales is 212B so inventory turns very quickly... in one quarter so I dont think this is any effect like that. Furthermore, raw materials were purchased in US so not related to yen fluctatuion. Inflation has actually come down recently - ie metal or other materials has come down recently so inventory purchased in US dollar 3-4 mo ago had probably being purchased at a higher price than now.
This is total puzzle. I was not able to get market number in USA for example. They are in the top5 in a few key countries like USA, Germany, Austria.. maybe France and UK. They are totally absent of Canada - at least in Montreal - my local town. What is really puzzling me is there low sales in Japan. I just learned yesterday that they use Kubota engine. Maybe there is a deal here between the 2.. ie Takeuchi force to export their product in exchange of a engine deal with Kubota. I may have to contact the company about this.
Takeuchi using a Kubota engine is probably why. And this is a very critical fact. Couldn't Kubota then raise their engine prices to keep Takeuchi under control.
Any cross share holdings? If they lose Kubota as an engine supplier who can supply them?
Honda makes great engines, do any of the auto manufacturers have experience making engines in this space?
this is a great question but I dont have all the answers. Going product by product I was able to find a few products using Yanmar engine as well. So it seems that Takeuchi uses both Kubota engine and Yanmar engine. So I guess this is how they can manage the supplier relationship more fairly.
Great write-up. There is a german Company called Wacker Neuson which might be also a competitor. It is really cheap but doesn't have the same growth track record than Takeuichi.
Thanks. I was not aware. Wacker trades at 5.9x EV/EBIT so even cheapier. But 450m in debt. I will track it. Thanks. Sales have been up as well recently. It must be a good business to be in.
Found Takeuchi a couple years ago. Profit growth has been amazing. The higher valuation makes the cash pile smaller compared to market cap. Still some potential for higher margins and market share gains going forward.
They are investing heavily in new factories. Hopefully the returns on pp&e will be satisfactory.
Thanks for this great write-up.
Quick question shouted from the hip, could it be the improved operating margin is due to the inflation? e.i. They had cheap raw material inventory but were able to sell the new products to inflated price, but will now have to buy raw material at full price while keeping price steady.
inventory is 64B but sales is 212B so inventory turns very quickly... in one quarter so I dont think this is any effect like that. Furthermore, raw materials were purchased in US so not related to yen fluctatuion. Inflation has actually come down recently - ie metal or other materials has come down recently so inventory purchased in US dollar 3-4 mo ago had probably being purchased at a higher price than now.
Thanks for the write up, learned a lot.
Do u have any stats on market share for their core product categories?
Could them exporting over selling domestically be due to higher prices being paid by foreign buyers?
This is total puzzle. I was not able to get market number in USA for example. They are in the top5 in a few key countries like USA, Germany, Austria.. maybe France and UK. They are totally absent of Canada - at least in Montreal - my local town. What is really puzzling me is there low sales in Japan. I just learned yesterday that they use Kubota engine. Maybe there is a deal here between the 2.. ie Takeuchi force to export their product in exchange of a engine deal with Kubota. I may have to contact the company about this.
Takeuchi using a Kubota engine is probably why. And this is a very critical fact. Couldn't Kubota then raise their engine prices to keep Takeuchi under control.
Any cross share holdings? If they lose Kubota as an engine supplier who can supply them?
Honda makes great engines, do any of the auto manufacturers have experience making engines in this space?
this is a great question but I dont have all the answers. Going product by product I was able to find a few products using Yanmar engine as well. So it seems that Takeuchi uses both Kubota engine and Yanmar engine. So I guess this is how they can manage the supplier relationship more fairly.
Great write-up. There is a german Company called Wacker Neuson which might be also a competitor. It is really cheap but doesn't have the same growth track record than Takeuichi.
Thanks. I was not aware. Wacker trades at 5.9x EV/EBIT so even cheapier. But 450m in debt. I will track it. Thanks. Sales have been up as well recently. It must be a good business to be in.
Great write up. I live in the Mid Atlantic, USA and have seen a bunch of landscapers buying their units vs other skid steer loaders.
Great this is great info .. what I am hearing is those loaders are very robust and reliable.compare.to.other CTL
I haven't seen much of.Takeuchi on This side of.the border (East Canada)
Found Takeuchi a couple years ago. Profit growth has been amazing. The higher valuation makes the cash pile smaller compared to market cap. Still some potential for higher margins and market share gains going forward.
They are investing heavily in new factories. Hopefully the returns on pp&e will be satisfactory.