Expect Omron’s Industrial Automation To Be the Medium-Term Profit Driver Despite Headwinds for 2024

Omron uses its sensing and control-related technologies to cover a broad spectrum of fields, but we expect its profit drivers to be its industrial automation and healthcare businesses. The firm is one of the leading domestic players in the factory automation, or FA, control equipment market (which include programmable logic controllers, or PLCs, relays, sensors, and switches). As the main driver, we expect the industrial automation segment is well-positioned for secular growth, driven by an aging population in developed markets, increasing labor costs, and production safety. As trends related to the "Internet of Things" gain prominence, automation equipment such as PLCs will be required to connect to networks/databases in factories. Also, Omron’s recent acquisitions increased its product line, allowing the firm to provide tailored automation solutions to customers.