26 October 2010 - JCR reiterated Tuesday its A- rating with a "stable" outlook on the senior debts of Japanese firm Nippon Thompson Co Ltd (TYO:6480), engaged in the manufacture and sale of needle roller bearings, linear motion rolling guides and machine components.
The agency issued the following press release:
Nippon Thompson is a major manufacturer of linear guidance systems and needle bearings. It has established a business model that pursues high profitability through quick delivery, holding wide-ranging stock of finished goods through manufacturing of a wide variety of products in small quantities.
However, it is now difficult for the Company to realize an operating profit margin of as close as 20% as seen before due to the higher yen. It will return to profitability for the fiscal year ending March 31, 2011 in terms of ordinary profit thanks to turnaround of business environment, and can ensure a satisfactory level of profit margin.
There is a chance that the acceptance of order will be weakened in the short run.
However, it is rather required to take steps towards an increase in production, because it has already large backlog of orders owing to recovery of demand. JCR will watch to what extent the Company can raise the earnings level over the medium term.
Its financial structure is good in general, and its ratio of equity capital to total assets exceeds 60%.
Although JCR is concerned that it holds large inventory, it has been making efforts continually to raise proportion of stock of materials while reducing proportion of stock of finished products to the entire inventory holding. JCR also considers at the moment that the Company has not impaired its financial base, which can reduce the risk from inventory holding.
Other News:
JCR Maintains Nippon Thompson's A- Debt Rating
Schaeffler Premium-Quality Bearings Minimise Downtime & Prolong the Operating Life of High-Value Agricultural Machi
RBC Bearings to Webcast Second Quarter 2011 Results Earnings Conference Call November 4th
Saint-Gobain Performance Plastics Makes Powertrain Solutions Easy
NRB Bearings Q2 Net Profit up at Rs 14 cr
SKF to Install Rooftop Solar Array System
Boca Bearings Sponsors the 2010 Ontario RC Dirt Classic
Applied Industrial Posts Better Than Expected Profit in Q1
