Shimano Sees Some Signs of Cooling Off in Smaller Markets but High-End Bicycle Demand Remains Strong

Shimano’s fiscal-year 2022 first-quarter revenue increased 13.9% year on year, as the company continues to capitalize on the pandemic-induced cycling boom that started in the second half of 2020. However, operating margin (while up year on year by 0.6 percentage points) declined from the previous quarter to 26.4% from 27.3%, as the impact from increasing components/logistics costs was worse than expected. We maintain our fair value estimate at JPY 29,000 but lower our 2022 operating margin estimate to 26.8% from 27.5% to reflect our expectations that costs will remain high throughout at least the third quarter.