Honda Motor ADR


SKU: HMC-1 Category:


Honda managed to deliver an all-around beat but is operating in a challenging business environment. In contrast to the policy of Japanese automakers of sticking to hybrid cars, key markets for Honda like the U.S. and India are rapidly transitioning to EVs resulting in a huge loss of market share. In Q3, Honda Motor’s production and unit sales of automobiles decreased due to the impact of the pandemic and semiconductor supply shortages. Manufacturing costs continued to rise due to rising inflation and raw material prices. In these conditions, Honda made corporate-wide efforts to enhance its profitability structure and achieved an operating margin of 6.3%. For the second straight quarter, the motorcycle industry reported record-high operating profit and margin. While U.S. and China sales were down, the EV transition being a major factor here, Japan’s unit sales increased. In Japan, the FREED was the best-selling minivan, while the N-BOX was the best-selling new automobile. Honda revealed its intention to launch a new light commercial EV in 2024. In addition, they announced a joint venture with LG Energy Solutions to create EV batteries. They also signed an agreement with GS Yuasa to work together on lithium-ion batteries with high capacity and high output. We give the company a ‘Hold’ rating with a revised target price.

Our Report Structure:

⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
⦁ Disclosures

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