Five stocks for next week
(5951) Dainichi Kogyo
From the quarterly report: Industry: Metal products.
【Features】Major maker of oil fan heaters. The leading humidifier is the second pillar. Committed to domestic production. Profit concentrated in the second half.
【Special demand】Humidifier demand remains strong due to infection control measures. Carried-over inventory from the previous period ran out, boosting operating rate during the term. Demand for consumables such as filters also rose. With typical winter temperatures, oil fan heaters and ceramic heaters held steady. Contract manufacturing of residential fuel cells increased. Operating profit at a high level.
【Humidifiers】Production capacity expanded toward the peak autumn season, increasing supply from the Niigata City heating equipment factory. Staffing support brought in from the same facility.
Announcement on May 13, 2021. For the fiscal year ending March 2022, forecast for operating profit is 2.20 billion yen, up 9.5% YoY, and ordinary profit is also 2.20 billion yen, up 7.5% YoY, indicating two consecutive years of revenue and profit growth.
From February 12, 2016 at 576 yen and August 19, 2016 at 586 yen as two troughs, a short-term uptrend (A) formed, with a high of 939 yen on March 7, 2018. It then turned into a downtrend (B); within this, two troughs at 598 yen on December 25 and 590 yen on August 27, 2019 formed a rebound that broke out of the downtrend (B), rising to 708 yen on October 31, but then got swept up in the coronavirus market and entered a range. In this range, the high of 720 yen on January 6, 2020 led to a COVID-19 sell-off, bottoming at 496 yen on March 13. From this bottom, a short-term uptrend (C) formed, reaching 1025 yen on November 24 and 1019 yen on January 12, 2021 as two peaks, then moved down out of the uptrend (C), and hovered around 755 yen on June 21 after a pullback.
Points from Dejima Sho’s Shibata Kanten
Bottom formed at 496 yen on March 13, 2020, then peaked at 1025 yen on November 24 and 1019 yen on January 12, 2021, before pulling back; it moved down to 755 yen on June 21, and is now range-bound. The 1/2 retracement from the rise from the March 13 low of 496 yen to the November 24 high of 1025 yen is 761 yen, so staying around this level indicates a consolidation. The 11/24 high of 1025 yen pulling back past six months suggests the stock is undervalued; a rebound would not be surprising. However, if it falls below 700 yen, it would trigger a stop-loss.
Buy points
①760–780 yen
②710–750 yen
Take-profit points
① if870–900 yen
If it drops to830–870 yen
Stop loss
If it falls below 700 yen, cut losses
(7955) Cleanup
From the quarterly report: Industry: Other manufactured goods.
【Features】Third in system kitchen market. Strong presence in profitable consumer channels. Production shifted fromIwaki to Okayama, creating a two-pole system.
【Domestic Strengthening】Main system kitchen remains robust due to indoor environment needs. System bathrooms and washbasin countertops also improving. Travel expenses and fair costs remain low. Increases in raw material prices such as stainless steel sheets and wood are absorbed to lift profit.
【Overseas Expansion】Sales networks expanding in Southeast Asia, including Vietnam and Thailand. Production will be increased with more local partners. Joint development with Italian company to launch Japan-exclusive high-end ordered kitchens.
Announcement on May 11, 2021. Forecast for the fiscal year ending March 2022: operating profit +7.1% to 2.80 billion yen, ordinary profit +6.9% to 2.90 billion yen, continuing three years of revenue and profit growth.
Current movement is,In the downtrend that started with the high of 928 yen on January 24, 2018, the stock fell to 497 yen on May 24, 2019 and 501 yen on August 26, forming a two-point bottom, then rebounded to 810 yen on December 10. After that, a downturn began, pulling back to 410 yen on March 17, 2020. It formed a right-triangle consolidation (B) with rising price, and after peaking at 582 yen on July 22, a short-term downtrend (C) formed. Within this, a short-term uptrend (D) began with the first bottom at 436 yen on November 6 and second bottom at 447 yen on February 1, 2021, rising to 600 yen on April 19, then pulling back to 501 yen by May 13 and hovering.
This stock wasrecommended on Friday, April 23.
In the uptrend that started at 436 yen on November 6, 2020, after reaching 447 yen on February 1, 2021, it rose to 574 yen on March 29, pulled back to 520 yen on April 9, rose to 600 yen on April 19, and as of that weekend was recommended; if it falls below 520 yen, stop-loss with incremental 20-yen buys.
As a result,the stock fell to 501 yen on May 13, triggering a stop-loss, but since then has hovered around 510–530 yen, with a chart suggesting the next support near 490 yen, though it did not drop below 500 yen.If it drops below 500 yen, the stop-loss point is 480 yen.
Buy points
①510–530 yen
②490–500 yen
Take-profit points
① in that case580–620 yen
② if it drops to560–580 yen
Stop loss
Stop loss point is480 yen
(5406) Kobe Steel
From the quarterly report: Industry: Steel.
【Dividend outlook】Steel demand is recovering globally, enabling production expansion; product markets are rallying, offsetting high raw materials; aluminum also recovering. Profit rises as machinery and power segments recover from losses, labor costs return. Company plan seems conservative. Possible dividend increase.
【Low-Carbon】Expansion of low-carbon steel using natural gas. Considering full hydrogen-reduction steel development; plan to reposition blast furnaces in the 2030s. Coal-fired power includes biomass and ammonia co-firing.
Announcement on May 11, 2021. Forecast for the fiscal year ending March 2022: operating profit +80.9% to 55.0 billion yen, ordinary profit +178.0% to 45.0 billion yen, continuing growth.
Points from Dejima Sho’s Shibata Kanten
Chart before COVID-19 shows,
From the quarterly report: Industry: Electrical equipment.
【Features】One of the major signaling companies, strong with private railways. Three pillars: railway signals, road signals, and power supply units for industrial equipment. Focus on second-half performance.
【Recovery】Signal systems supported by shipments delayed due to a factory fire in January; JR and private rail signaling upgrades also contribute. Overseas markets in India, Taiwan improving. Semicon manufacturing equipment parts also rising with market recovery. Operating profit recovering.
【Signals】In the Moscow and 14 Russian cities smart signaling study conducted in 2018–2019, up to 66% traffic congestion relief confirmed, boosting full-scale adoption; important event regarding continuity of business.
Points from Dejima Sho’s Shibata Kanten
Prior to COVID-19From the low of 334 yen on August 15, 2019 to the high of 648 yen on December 27, 2019, within triangle (C); the drop from the July 22, 2020 high of 590 yen to October 16 and December 23, 404–394 yen this year has formed upper range near 450 yen. Forecast for 2022 is revenue and profit growth; current price is undervalued and a dip-buy is advised. However, if 380 yen closes below, stop loss.
Buy pointsBuy points
400–420 yen400–420 yen
Take-profit pointsTake-profit points
470–500 yen470–500 yen
Stop lossStop loss
Stop loss if it closes below 380 yenIf it closes below 380 yen, stop loss
