Japan Research Pack

After the close of trading on 27 April, Omron announced 17/3 results and held abriefing. In our view, the results were unsurprising and will not have any short termimpact on the share price. We reaffirm our Buy rating. Takeaways are (1) operatingprofits/EPS in 17/3 were ￥67.6bn/￥215, exceeding the Quick consensus forecasts(as of 26 April) of ￥65.4bn/￥214 (our forecasts were ￥67.0bn/￥214). (2) Profitguidance for 18/3 is 11% lower than the Quick consensus forecast, and we thinkguidance includes a conservative estimate for head office expenses. (3) We thinknew medium-term business targets are within range of attainment, assumingbusiness conditions are favorable. The main supplementary data are as follows:Q4 results overview: In 17/3 Q4 sales rose 3% y-y to ￥225.5bn (up 14% q-q) andoperating profits rose 20% to ￥21.8bn (up 9%), resulting in an operating margin of9.6%.Forex effects adversely affected sales by ￥5.6bn y-y and operating profits by￥1.5bn y-y. If we exclude these adverse effects, sales rose 5% and operating profitsrose 28%.