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  "documentTitle": "Nidec Corp. (6594 JP)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
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  "presentationDate": "2016-12-13 00:00:00",
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  "notes": "Includes footnotes 52 and 53. The table derives Automotive business performance by subtracting HDD business from total SAIC filings.",
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      "text": "Dalian is of particular concern because it contains two businesses at one site. As a result of the shared facilities, Nidec likely has to make a number of judgment calls about how to allocate expenses between the Small Precision Motors and Automotive businesses.",
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      "text": "OP margin: 15.1%",
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      "text": "Under the aforementioned assumptions, Dalian’s Automotive business generated an OP margin in CY 2014 that was 670 basis points higher than that of the FY 2014 Automotive product group of 8.4%. Assuming our full year Small Precision Motor business assumption of a 1.7% OP margin is anywhere near correct, Dalian’s CY 2014 OP margin would have been much lower than our estimate of Nidec’s FY 2014 other Small Precision Motors OP margin of 9.5%.",
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      "text": "Dalian is of particular concern because it contains two businesses at one site. As a result of the shared facilities, Nidec likely has to make a number of judgment calls about how to allocate expenses between the Small Precision Motors and Automotive businesses. Given the likely performance differences Dalian’s Small Precision Motors and Automotive businesses generated versus their product group averages, we are concerned that Nidec is using the non-Automotive business at Dalian to subsidize a higher OP margin for Automotive. Using the above estimates, if we reallocated Dalian’s expenses so that Small Precision Motor’s OP margin increased by 10 percentage points to 11.7%, it would knock Dalian Automotive’s OP margin down to 9.2%. These theoretical OP margins are much closer to what their product groups generate company-wide.",
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      "text": "(1) Converted from CNY at 15.88 and 17.19 in 2013 and 2014, respectively. (2) Calendar Q4 estimated based on average of Calendar Q1-Q3.",
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      "text": "52 FY2014 Results Presentation, Slide 14. 53 On the FY2014 call, Nidec management stated that HDD OP margin for the year had been 22%.",
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      "text": "SAIC filings (1) JPY millions CY2013 CY2014(E) Rev 23,732 24,756 Op income 597 2,503 HDD as per SEC filings (2) Rev 10,098 9,194 Op income (450) 156 OPM N/A 1.7% Auto (SAIC-SEC) Rev 13,634 15,562 Op 1,047 2,347 OPM 7.7% 15.1%",
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