Ohizumi is a leader in a niche market: thermistors. (A thermistor is a type of ceramic semiconductor with electrical resistance that changes as temperature varies.) The company manufactures and sells various types of electronic components that use thermistors (elements priced at several JPY to tens of JPY each), as well as temperature sensors (priced at tens of JPY to hundreds of JPY each). Temperature sensors (such as electronic thermometers) incorporate the elements the company manufactures and are used to measure and control temperature.
In the 1950s, the company began specializing in the development of temperature sensors, aiming to supply high-quality products in Japan and overseas. The global market is currently dominated by three companies: Ohizumi, Shibaura Electronics (TSE JASDAQ: 6957), and SEMITEC (TSE JASDAQ: 6626).
The Company’s core businesses are Automotive Components (59.6% of sales in FY03/21), Air Conditioning and Custom Components (32.7%), and Elements (7.7%). In FY03/21, Japan accounted for 50.6% of sales, China for 23.1%, ASEAN countries for 10.8%, and other regions for 15.5%. The company does not disclose segment profits, but Shared Research estimates profitability is highest for Elements, followed by Automotive Components, and then Air Conditioning and Custom Components in that order. Driving the company’s growth in the Elements business is the use of elements in next-generation communication network technology 5G (used in semiconductor laser modules for optical communications at the relay nodes of core networks, for which Chinese companies are large end users). The Automotive Components business is growing thanks to existing customers (a single vehicle uses around 10 components) and electrification (20 components per vehicle).
The company sells onboard components to major Tier 1 auto parts manufacturers around the world, including Denso (TSE1: 6902), Panasonic AIS (subsidiary of Panasonic [TSE1: 6752]), Yazaki Parts (Yazaki Business Group, unlisted), Sanden Holdings (TSE1: 6444), Bosch (Germany, unlisted), Mahle (Germany, unlisted), and Continental (FWB: CON). Denso accounts for the largest portion of Ohizumi’s sales, at 30% on a parent-only basis and 40% if group companies are included. The company has numerous Tier 1 customers in the Air Conditioning and Custom Components business, with Daikin (TSE1: 6967) and Mitsubishi Electric (TSE1: 6503) accounting for 15–16% of sales. Denso, Daikin, Mitsubishi Electric, and their group companies together account for the majority (55–56%) of Ohizumi’s sales. Ohizumi has a solid base of large customers with which it conducts stable business.
Ohizumi’s sales are closely tied to the automotive industry (and especially to Denso). While this results in stable, long-term demand, it also leads to a low gross profit margin (around 20%) despite being positioned upstream on the value-added curve. The shift toward electric vehicles is driving an increase in the number of thermistors used per vehicle, but thermistor prices are less sensitive to supply and demand volatility than semiconductors or liquid crystal because concentrating manufacturing of thermistor elements is relatively easy, and shifting to another company’s products is difficult.
For FY03/21, the company reported consolidated sales of JPY10.8bn (-6.0% YoY), operating profit of JPY315mn (-32.4% YoY), recurring profit of JPY290mn (-26.5% YoY), and net income attributable to owners of the parent of JPY225mn (+1.6% YoY). Sales declined YoY in the Automotive Components segment and the Air Conditioning and Custom Components segment. A key reason was sluggish sales in China, mainly of automotive and air conditioning products. The company posted an operating loss in 1H, which it covered through sharply higher operating profit in 2H as sales picked up. This ramp-up was the result of year-long efforts to boost productivity by adjusting production processes and companywide initiatives to enhance operating efficiency. Net income was up YoY due to the recording of deferred tax assets, leading to a corporate tax adjustment.
The company revised its FY03/22 forecasts at the time of its Q2 results announcement (November 12, 2021). The revised company forecast calls for sales of JPY11.9bn (+10.2% YoY), operating profit of JPY550mn (+74.7% YoY), recurring profit of JPY500mn (+72.6% YoY), and net income attributable to owners of the parent of JPY330mn (+47.0% YoY). These figures are after applying the Accounting Standard for Revenue Recognition. The company revised its forecast to reflect its prediction that the market environment for its core businesses will remain more favorable in 2H than its initial expectations. In the Automotive Components segment, the company aims to recover investment and expand sales in the growth area of electrification (mainly secondary batteries and heat pumps). In the Air Conditioning and Custom Components segment, the company aims to increase its share among core customers though sales expansion of value engineering products (products engineered to lower costs without decreasing functional values of products) as the air conditioning market remains strong. In the Elements segment, the company anticipates recovery in the market for its existing products, and in demand for elements used for optical communications (where signs of recovery have already been observed). The company forecasts a 74.7% YoY increase in operating profit, factoring in a sharp rise in raw materials costs, an increase in logistics costs, and lower capacity utilization stemming from reduction of built-up inventory in 2H.
In the medium-term plan (FY03/22 to FY03/24) unveiled in May 2021, the company announced sales targets of JPY14.0bn and OPM of 8% by FY03/24 (based on the previous accounting standards). By business, the company forecasts sales of nearly JPY9.0bn in Automotive Components, around JPY4.3bn in Air Conditioning and Custom Components, and nearly JPY1.0bn in Elements. This plan, announced mid-pandemic, has the same sales and OPM targets as the previous medium-term plan.
Because of where and when the company made capital investments, performance had been sluggish since the company listed its shares in June 2012, and the company’s growth and profitability lagged behind that of competitors. In December 2016, Ohizumi’s largest shareholder (an investment fund called “Integral”) sent Hidetsune Goto to the company. Mr. Goto became an advisor in January 2017. He was elevated to chairman in February of the same year and appointed president during the following June. Performance began improving from FY03/17 and in FY03/19, the company paid its first dividend since listing (JPY8 per share, payout ratio of 11.9%). Under President Goto’s leadership and benefiting from a favorable operating environment, the company concentrated on automakers and Japanese manufacturers of air conditioners (package air conditioners). In October 2016, the head of Denso’s ceramics technologies department, Toshiki Saburi, became vice president of Ohizumi. He was appointed as president in June 2020 (with President Goto simultaneously becoming chairman of the board, a position from which he stepped down in June 2021). President Goto, who is a management expert, and Vice President Saburi, who is a businessperson with knowledge of thermistor technology, were pillars of the company’s management team through FY03/21. From FY03/22, the company is conducting management in a way that draws out its original strengths.
The company’s aim is to use cash effectively, striking a balance between reinforcing company finances (lowering interest-bearing debt and foreign exchange risk), investing in growth (increasing production capacity, building plants, introducing an ERP system, strengthening a base in Europe) and providing shareholder returns (stable dividends).
Shared Research thinks Ohizumi’s strengths are: 1) the company has created high barriers to entry by providing unique products that are hard to emulate, concentrating their manufacture, and providing a steady supply; 2) the company’s customer base among major Tier 1 manufacturers (Denso, Daikin, Mitsubishi Electric, and others) is ratcheting up business in Japan and overseas; and 3) top management is demonstrating strong leadership.
In our view, the company’s weaknesses are: 1) the rise of the highly profitable Elements business is progressing slowly, affected by market- and customer-specific factors; 2) profitability is low in the Air Conditioning and Custom Components business; and 3) frequent changes in the company’s largest shareholder have led to discontinuous management policies, weakening the financial base and hampering the cultivation of senior human resources.
|Gross profit margin||21.6%||18.3%||16.3%||16.4%||17.8%||19.2%||20.2%||21.0%||20.0%||18.8%|
|Operating profit margin||3.8%||-0.3%||-0.9%||0.3%||2.6%||4.9%||5.6%||5.9%||4.1%||2.9%||4.6%|
|Recurring profit margin||2.3%||-1.7%||-2.2%||-0.3%||0.6%||3.3%||3.7%||6.0%||3.4%||2.7%||4.2%|
|Shares issued (year-end; '000)||5,377||5,677||6,037||7,112||7,873||8,367||8,367||8,367||8,383||8,387|
|EPS (fully diluted)||-||-||-||-||2.0||-||39.6||66.4||26.2||26.6|
|Dividend per share||-||-||-||-||-||-||-||8.0||8.0||8.0||8.0|
|Book value per share||102.2||98.4||61.1||111.7||113.1||168.1||212.5||259.7||256.0||320.2|
|Balance sheet (JPYmn)|
|Cash and cash equivalents||399||735||490||566||671||1,326||1,267||1,448||2,054||1,704|
|Total current assets||5,358||5,495||5,425||5,355||5,306||6,135||5,946||6,193||6,511||6,643|
|Tangible fixed assets||2,017||2,143||2,556||2,540||2,179||2,105||2,231||2,394||2,628||2,991|
|Investments and other assets||215||239||177||283||207||250||369||281||178||348|
|Total current liabilities||4,632||4,717||5,424||4,957||4,938||4,875||3,098||3,169||3,850||3,704|
|Total fixed liabilities||2,432||2,619||2,380||2,440||1,876||2,220||3,693||3,559||3,414||3,697|
|Total net assets||549||558||368||794||893||1,408||1,793||2,200||2,179||2,717|
|Total liabilities and net assets||7,614||7,895||8,173||8,193||7,708||8,504||8,585||8,928||9,443||10,117|
|Total interest-bearing debt||4,397||4,811||4,501||4,658||4,165||4,315||3,763||3,680||4,714||4,706|
|Cash flow statement (JPYmn)|
|Cash flows from operating activities||-248||375||551||253||556||662||680||738||497||550|
|Cash flows from investing activities||-243||-349||-412||-533||-391||-314||37||-492||-631||-385|
|Cash flows from financing activities||21||328||-324||378||-196||236||-528||-42||825||-677|
|Capex, depreciation, R&D expenses|
|R&D expenses as % of total sales||3.6%||3.9%||3.5%||3.1%||2.7%||2.8%||3.1%||3.2%||3.3%||3.2%|
In electronics, a component that provides resistance is called a resistor. A resistor that is sensitive to temperature is a “thermally sensitive resistor,” which has been shortened to “thermistor.”
Various electronic elements use thermistors as semiconductor ceramics to enable electrical resistance to vary in response to changes in temperature.
Temperature sensor (contact or electrical)
This type of sensor, which is assembled from elements for specific purposes, is used to measure or control temperature. Other sensors include resistance temperature detectors, linear resistors, thermocouples, and IC temperature sensors.
On November 12, 2021, Ohizumi Mfg. Co., Ltd. announced earnings results for 1H FY03/22; see the results section for details.
On November 12, 2021, Ohizumi Mfg. Co., Ltd. announced a revision to its consolidated full-year earnings forecast.
On November 11, 2021, Ohizumi Mfg. Co., Ltd. announced a revision to its 1H FY03/22 consolidated earnings forecast.
Sales: JPY5.9bn (previous forecast: JPY5.5bn)
Operating profit: JPY400mn (JPY170mn)
Recurring profit: JPY355mn (JPY155mn)
Net income*: JPY247mn (JPY120mn)
EPS: JPY29.49 (JPY14.31)
*Net income attributable to owners of the parent
The company revised its forecast as orders received have continued to exceed expectations from the beginning of the period and capacity utilization has improved. Accordingly, the company expects sales, operating profit, recurring profit, and net income attributable to owners of the parent to all surpass the previous earnings forecast in 1H. The company is currently in the process of compiling its full-year forecast.
Ohizumi MFG. Co., Ltd. announced business plans and its views on growth potential.
The company released a document titled "Business Plans and Growth Potential," explaining its views on the following four areas: business model, market environment and competitiveness, business plan, and potential risks. Shared Research plans to report on the details of the document after an interview with the company following Q1 earnings results announcement. The company does not plan to hold a briefing session in regard to the document.
|(JPYmn)||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||% of Est.||1H Est.||% of Est.||FY Est.|
|Gross profit margin||21.6%||20.9%||20.4%||20.0%||17.5%||16.5%||17.7%||18.8%||23.3%||22.2%|
|Operating profit margin||6.8%||5.5%||4.3%||4.1%||-||-||0.8%||2.9%||8.3%||6.8%||6.8%||4.6%|
|Recurring profit margin||5.8%||4.7%||3.7%||3.4%||-||-||0.6%||2.7%||7.5%||6.0%||6.0%||4.2%|
|Gross profit margin||21.6%||20.2%||19.3%||18.9%||17.5%||15.7%||19.6%||21.4%||23.3%||21.0%|
|Operating profit margin||6.8%||4.0%||2.0%||3.2%||-||-||4.9%||7.8%||8.3%||5.1%|
|Recurring profit margin||5.8%||3.6%||1.6%||2.5%||-||-||3.2%||7.7%||7.5%||4.4%|
Sales by quarter and fiscal year
Source: Shared Research based on company data
Operating profit by quarter and fiscal year
Source: Shared Research based on company data
Overview of 1H FY03/22 results (April–September 2021)
A robust market environment supported favorable orders on the whole, although orders were partly impacted by the semiconductor shortage and factory closures due to resurgence in COVID-19 infections in some areas. As a result, production continued at higher levels than initially expected, resulting in a 30.0% YoY increase in sales. The company moved back into operating profit with a 5.7pp improvement in gross profit margin due mainly to increased capacity utilization.
Performance by product and service is as below. Segment breakdown is not provided. The company has adopted the Accounting Standard for Revenue Recognition from FY03/22, but we show the figures calculated here under the previous standards for comparison purposes.
1H FY03/22 sales (April–September): JPY3.7bn (+44.1% YoY based on the previous accounting standards; the same applies below)
Sales increased YoY in the electrification area due to an increase in products delivery as a result of investment. Sales of existing products grew, despite the temporary effect of reduced customer production, because of strong automobile sales from the beginning of the period. From FY03/22 the company has shown the net amount for paid-for supplies.
Sales: JPY2.3bn (+48.6% YoY)
Sales of air conditioning-related components increased, boosted by global economic recovery and improved market share with core customers. Sales increased in the custom components business, primarily for machine tools, supported by recovery of production in each industry.
Sales: JPY469mn (+9.5％ YoY)
Sales of existing products increased, with recovery in orders received for automotive, home appliances, and manufacturing equipment. However, sales for optical communications (a growing business area) declined due to continued inventory adjustments in the market.
|(JPYmn)||1H Act.||2H Act.||FY Act.||1H Act.||2H Act.||FY Act.||1H Act.||2H Est.||FY Est.|
|Cost of sales||4,646||4,505||9,151||3,781||4,945||8,726||4,579|
|Gross profit margin||20.9%||19.1%||20.0%||16.5%||20.6%||18.8%||22.2%|
|Operating profit margin||5.5%||2.6%||4.1%||-||6.4%||2.9%||6.8%||2.5%||4.6%|
|Recurring profit margin||4.7%||2.1%||3.4%||-||5.5%||2.7%||6.0%||2.4%||4.2%|
The company made upward revisions to its 1H forecast on November 11, 2021, and to its full-year forecast on November 12, 2021 (when announcing its 1H results).
In the Automotive Components business, the company continues to aim for sales expansion of existing products and sales growth in automobile electrification area, mainly in secondary batteries and heat pumps. It forecasts sales in this business of JPY7.7bn (+19.4% YoY).
In the Air Conditioning and Custom Components business, the company aims to increase its share of sales to core customers by expanding sales of value engineering products, against a background of an air conditioning market that remains strong. It also expects growth in demand for heat pumps in Europe, with the goal of reducing carbon dioxide. The company anticipates a 27.3% YoY rise in sales, to JPY4.5bn.
In the Elements business, Ohizumi anticipates recovery with market and sales channel growth, despite continued inventory adjustment in part of the optical communications market. The company expects increased demand for existing products to follow recovery in all industries. It forecasts a 5.7% YoY rise in sales in the business, to JPY875mn.
The company expects OPM to improve by 1.7pp YoY, from 2.9% to 4.6%. The company' revised its forecast to factor in increased demand in 2H, soaring raw materials costs due to high crude oil prices and increased demand, rising logistics costs, and lower capacity utilization to reduce inventory.
|Results vs. Initial Est.||FY12/03||FY03/13||FY03/14||FY03/15||FY03/16||FY03/17||FY03/18||FY03/19||FY03/20||FY03/21|
|Sales (Initial Est.)||-||-||11,400||11,814||12,005||12,413||12,295||12,454||12,889||Undisclosed|
|Results vs. Initial Est.||-||-||4.2%||1.8%||2.1%||-1.9%||0.8%||0.1%||-11.2%||-|
|Operating profit (Initial Est.)||-||-||395||295||384||439||656||703||641||Undisclosed|
|Operating profit (Results)||427||-32||-105||36||318||599||694||735||466||315|
|Results vs. Initial Est.||-||-||-||-87.8%||-17.2%||36.4%||5.8%||4.6%||-27.3%||-|
|Recurring profit (Initial Est.)||-||-||253||176||267||344||506||597||602||Undisclosed|
|Recurring profit (Results)||251||-178||-259||-36||72||398||454||752||394||290|
|Results vs. Initial Est.||-||-||-||-||-73.0%||15.7%||-10.3%||26.0%||-34.6%||-|
|Net income (Initial Est.)||-||-||178||116||235||251||310||410||429||Undisclosed|
|Net income (Results)||219||-297||-326||-241||15||262||334||560||221||225|
|Results vs. Initial Est.||-||-||-||-||-93.6%||4.4%||7.7%||36.6%||-48.5%||-|
In January 2003, Hokuriku Electric Industry transferred all its shareholdings in Ohizumi to the W.L. Ross group. Tatsuo Kubota, an alumnus of that group, was appointed director in June 2003. He headed management as president, chairman, and representative director for the decade beginning in April 2007. During that period, the company listed its shares, but performance continued to worsen. Then-president Kubota’s plan to concentrate the air conditioner business in China (cultivating low-priced room air conditioners) backfired, and the company became unprofitable. In December 2016, the W.L. Ross group transferred all its holdings in Ohizumi to Integral, which then became the largest shareholder. In the last three years of then-president Kubota’s tenure (from FY03/14 to FY03/16), sales were above initial company forecasts but profits were down sharply from the initial forecasts.
After the appointment of Hidetsune Goto as president, sales were essentially on target, and profits were higher. In FY03/17, profit increased substantially, despite a downturn in sales. In FY03/18, only recurring profit undershot the forecast, due to forex losses and commissions paid. In FY03/19, recurring profit was higher again, due to a forex gain. Hidetsune Goto, an alumnus of Integral, became an advisor in January 2017. He was elevated to chairman that February and appointed president that June. In October 2016, the head of Denso’s ceramics technologies department, Toshiki Saburi, became vice president of Ohizumi.
In FY03/20, the gap between initial forecasts and results widened as the result of deteriorating performance (affected by worsening results in the Chinese market and the impact of the COVID-19 pandemic) and write-downs on derivatives. President Goto moved to the post of chairman in 2020, and Toshiki Saburi became president. In June 2021, Hidetsune Goto stepped down as chairman.
The company's former medium-term business plan ended in FY03/21. The COVID-19 pandemic led to significant changes in the business environment compared to when the company first released that plan, and results were below initial targets: sales of JPY10.8bn (vs. initial target of JPY14.0bn), OPM of 2.3% (8.0%), and ROE of 26.5% (30.0%). Recognizing that these shortfalls were due largely to changes in the operating environment, the company has indicated that it intends to maintain the basic policies in its medium-term plan.
In its new medium-term business plan (FY03/22 to FY03/24), the company targets sales of JPY14.0bn and OPM of 8% by FY03/24. By business, the company aims for sales of nearly JPY9.0bn in Automotive Components, around JPY4.3bn in Air Conditioning and Custom Components, and nearly JPY1.0bn in Elements. This plan has the same sales and OPM targets as the previous medium-term plan. Shared Research understands that the company decided to keep these targets in place under the new plan, as it recognized that differences between actual and target figures under the previous plan were due largely to the impact of the COVID-19 pandemic.
The company’s new medium-term business plan sets forth two business strategies: grow/expand and reinforce the corporate structure. The growth/expansion strategy targets the strengthening of business related to the electrification of vehicles (secondary batteries, heat pumps, and motors) in line with the shift toward a carbon-neutral society. The company also plans to develop products to expand its business related to 5G and optical telecommunications. The second strategy, to reinforce the corporate structure, has three focuses. First, Ohizumi aims to make its product more competitive, pursuing streamlining and automation to lower production costs. Second, the company intends to pursue digitalization to raise productivity throughout the organization, including in back-office operations. Third, the company will work to enhance its organization and its people by concentrating on retaining and cultivating human resources.
The company’s sales are determined by unit price times the number of units sold. Unit prices of elements (several yen to several tens of yen) and sensors (tens to hundreds of yen) tend to decrease gradually over time. The number of units sold is affected by changes in final demand in markets for automotive components, air conditioning and custom components, and optical telecommunications.
|Medium-term business plan||FY03/20||FY03/21||FY03/22||FY03/23||FY03/24|
Automotive Components: Expand sales in the EV business.
Air Conditioning and Custom Components: Cultivate business with core customers.
Elements: Increase sales of products for optical telecommunications.
Automotive Components: The company aims to develop products in the areas of secondary batteries (products compatible with temperature measurement systems, thin products), thermal control (products that meet diverse temperature measurement needs), and motors (highly heat-resistant products).
Air Conditioning and Custom Components: Ohizumi intends to reinforce cost competitiveness targeting core customers. In the air conditioning category, the company plans to reduce component counts, employ less expensive materials, and develop products through value engineering.
Elements: In products for optical transceivers, the company aims to develop products that will help make equipment more compact.
Raise productivity and reduce costs by upgrading facilities and introducing automated equipment
Increase product quality and lower costs by automating testing
Improve factory analysis through factory-IoT (using IoT in factories to enhance and optimize manufacturing activities)
Install a backbone system to strengthen the infrastructure for managing production and sales activities
Make operations more easily visible and efficient
Put infrastructure in place, increase security
In March 2021, the company announced the signing of a capital and business alliance agreement with Ferrotec Holdings Corporation (JASDAQ: 6890). Under the agreement, Ohizumi and Ferrotec Holdings will work together to generate synergies in their respective areas of expertise.
One area of potential collaboration is in the development of new products that utilize Ohizumi’s temperature sensing technologies and Ferrotec Holdings’ thermal control product technologies. Such products could be marketed via Ohizumi’s sales channels, as well as Ferrotec’s sales channels in the Chinese market. In addition to expanded sales, the companies expect to collaborate in the mutual leveraging of management resources in production, engineering, and sales divisions.
The Ohizumi group consists of the parent and four consolidated subsidiaries. The company manufactures and sells various types of electronic components (referred to below as “elements”) that use thermistors. (A thermistor is a type of ceramic semiconductor with electrical resistance that changes as temperature varies.) The company also manufactures and sells temperature sensors that its customers (manufacturers of automotive components, air conditioners, and home appliances) use in final products.
In August 1939, the company was founded as Nippon Contact Point to manufacture high-performance electrical contact points for aircraft. March 1944 marked the company’s establishment as Ohizumi Aircraft Equipment Manufacturing Co., Ltd. After World War II, in October 1945, the company changed its name to Ohizumi Mfg. Co., Ltd., and began manufacturing electrical contact points to meet civilian demand. In February 1952, the company began R&D on thermistors, having received an order for trial production from the Ministry of Telecommunication’s Research Institute of Electrical Communication. In January 1955, the company began manufacturing thermistors for telephone switchboards. In the more than 60 years since then, the company has become a specialized manufacturer that has developed a comprehensive range of temperature sensors, aiming to supply high-quality products in Japan and overseas. Ohizumi is one of three companies that dominate the global market in this category, alongside Shibaura Electronics and SEMITEC.
|Production, orders, order backlog||FY12/03||FY03/13||FY03/14||FY03/15||FY03/16||FY03/17||FY03/18||FY03/19||FY03/20||FY03/21|
|by division (JPYmn)||Actual||Actual||Actual||Actual||Actual||Actual||Actual||Actual||Actual||Actual|
|% of total||52.8%||55.4%||55.1%||58.2%||56.8%||58.6%|
|Air Conditioning Components||3,436||2,988||3,679||3,309||3,558||3,148|
|% of total||29.7%||28.0%||30.7%||27.0%||29.2%||26.1%|
|Elements and Custom Components||2,019||1,758||1,694||1,814||1,691||1,843|
|% of total||17.5%||16.5%||14.1%||14.8%||13.9%||15.3%|
|% of total||52.8%||55.4%||55.1%||58.2%||56.8%||58.6%||60.5%||60.5%||58.7%||55.5%|
|Air Conditioning and Custom Components||3,982||4,199||3,848||3,845|
|% of total||32.4%||33.2%||33.2%||35.6%|
|% of total||7.1%||6.3%||8.1%||8.9%|
|% of total||52.8%||55.5%||55.1%||58.2%||56.8%||58.6%|
|Air Conditioning Components||3,234||3,044||3,618||3,249||3,617||3,237|
|% of total||29.7%||28.0%||30.7%||27.0%||29.2%||26.1%|
|Elements and Custom Components||1,901||1,791||1,666||1,781||1,719||1,896|
|% of total||17.5%||16.5%||14.1%||14.8%||13.9%||15.3%|
|% of total||52.8%||55.5%||55.1%||58.2%||56.8%||58.6%||60.5%||60.5%||58.7%||55.5%|
|Air Conditioning and Custom Components||3,971||4,238||4,005||4,351|
|% of total||32.4%||33.2%||33.2%||35.6%|
|% of total||7.1%||6.3%||8.1%||8.9%|
|% of total||2.3%||2.2%||1.8%||2.4%||2.9%||4.0%|
|Air Conditioning Components||319||419||361||237||326||272|
|% of total||2.9%||3.9%||3.1%||2.0%||2.6%||2.2%|
|Elements and Custom Components||318||309||291||338||297||442|
|% of total||2.9%||2.8%||2.5%||2.8%||2.4%||3.6%|
|% of total||2.3%||2.2%||1.8%||2.4%||2.9%||4.0%||3.4%||3.9%||3.8%||6.8%|
|Air Conditioning and Custom Components||483||636||1,052||1,892|
|% of total||3.9%||5.0%||8.7%||15.5%|
|% of total||1.5%||1.9%||4.0%||6.1%|
|Segment sales, other||FY03/12||FY03/13||FY03/14||FY03/15||FY03/16||FY03/17||FY03/18||FY03/19||FY03/20||FY03/21|
|Sales by product/service||11,113||10,780||11,878||12,021||12,260||12,181||12,392||12,470||11,441||10,753|
|% of total||51.9%||56.0%||54.9%||57.5%||56.9%||58.6%||60.5%|
|Air Conditioning Components||3,426||2,943||3,676||3,373||3,529||3,291||3,030|
|% of total||30.8%||27.3%||30.9%||28.1%||28.8%||27.0%||24.5%|
|Elements and Custom Components||1,917||1,801||1,684||1,734||1,760||1,751||1,865|
|% of total||17.2%||16.7%||14.2%||14.4%||14.4%||14.4%||15.1%|
|% of total||51.9%||56.0%||54.9%||57.5%||56.9%||58.6%||60.5%||61.2%||62.3%||59.6%|
|Air Conditioning and Custom Components||4,115||4,024||4,085||3,589||3,511|
|% of total||33.8%||32.5%||32.8%||31.4%||32.7%|
|% of total||7.6%||7.0%||6.0%||6.4%||7.7%|
|Sales by region||11,113||10,780||11,878||12,021||12,260||12,181||12,392||12,470||11,441||10,753|
|% of total||67.7%||69.4%||65.8%||67.8%||66.5%||67.5%||64.2%||63.8%||59.4%||50.6%|
|% of total||23.5%||19.7%||20.8%||17.1%||16.9%||15.7%||16.5%||15.1%||13.9%||23.1%|
|% of total||-||-||-||-||-||-||-||-||14.5%||10.8%|
|% of total||8.7%||11.0%||13.3%||15.1%||16.5%||16.8%||19.4%||21.1%||12.1%||15.5%|
|Tangible fixed assets||2,229||2,338||2,556||2,540||2,179||2,105||2,231||2,394||2,628||2,991|
|% of total||59.0%||60.1%||63.0%||52.9%||55.8%||60.4%||60.1%||64.7%||69.1%||58.1%|
|% of total||31.4%||31.5%||31.3%||26.1%||22.2%||18.3%||15.7%||14.0%||12.0%||27.5%|
|% of total||9.6%||8.4%||5.7%||21.0%||21.9%||21.2%||24.1%||21.3%||18.9%||14.3%|
The Company’s business segments are Automotive Components (59.6% of total sales in FY03/21), Air Conditioning and Custom Components (32.7%), and Elements (7.7%). By region, Japan accounted for 50.6% of total sales, China for 23.1%, ASEAN countries for 10.8%, and other regions for 15.5%. The company has not disclosed segment profits, but Shared Research understands profitability is highest for Elements, followed by Automotive Components, and then Air Conditioning and Custom Components.
Sales composition by type of business (FY03/21, JPY10.8bn)
Source: Shared Research based on company data
Sales composition by region (FY03/21, JPY10.8bn)
Source: Shared Research based on company data
In 1964, the company began manufacturing coolant temperature sensors for car radiators. Temperature sensors have grown into a mainstay of the Automotive Components business. As performance demands have risen, the use of temperature sensors in automobiles has expanded to include intake air temperature sensors for engine control, temperature sensors for engine cooling, and evaporator temperature sensors for car air conditioners. Hybrid and electric vehicles also use numerous temperature sensors, such as for secondary batteries and heat pump air conditioner systems.
New automobile models are introduced every five or 10 years. Getting approval for the products used in these models is time-consuming and requires a variety of performance and durability testing. Once approval is granted, however, demand is stable and guaranteed for many years. Ohizumi began doing business with Denso, one of its largest customers, around 1960, building up a trust-based relationship as a steady supplier in the ensuing years. In October 2016, the head of Denso’s ceramics technologies department, Toshiki Saburi, was appointed vice president of Ohizumi. Mr. Saburi was promoted to president of the company in FY03/21, and Shared Research understands this could lead to an even stronger relationship with Denso.
In April 2017, the company opened a European office in Stuttgart, Germany, sending engineers to the location and strengthening local sales efforts. The company has won new orders from Tier 1 European auto parts manufacturers (such as Bosch and Mahle) as a result. Ohizumi also has a stronghold among European manufacturers of temperature sensors (such as TDK EPCOS) used by European auto parts makers. In recent years, the company has made inroads in this area as a supplier to customers who purchase products from multiple sources. Meeting the specifications of European auto parts makers has produced a beneficial cycle of increasing business with European Tier 1 manufacturers for their factories in China.