Nidec (6594.T): First Take: Media report on potential c.¥1 tn impairment losses and CEO dismissal

Goldman Sachs First Take on Nidec (6594.T). In the early morning of September 28, Diamond Online reported that Nidec is planning to book impairment losses of c.¥1 tn and that its CEO Mitsuya Kishida would be dismissed following a board of directors meeting. Main points: (1) The rise in impairment losses to around ¥1 tn reflects ¥300 bn related to correcting accounting irregularities, as well as an impairment loss of c.¥600 bn primarily in the appliance business; Nidec has applied a strict approach to estimating the value of its plant, property and equipment and goodwill, particularly for businesses undergoing reform. The owners' equity ratio is expected to fall to the 20% level based on a simple calculation, but key businesses excluding appliances/automotive are expected to deliver high growth, with a likely V-shaped recovery by securing an operating profit in FY3/27. (2) Nidec reportedly held an extraordinary board meeting on September 25 where it was decided that CEO Kishida would be