Future Upgrades by New Cyclists From Pandemic Will Drive Shimano’s Growth After Headwinds

Shimano’s December-quarter revenue grew 6.6% year on year, exceeding our forecasts of an 8.8% decline, as demand for high-end bicycles and e-bikes in Europe was resilient, amid a slowdown in the overall bicycle market. Despite the strong results, we expect an economic slowdown will cause bicycle frame manufacturers and retailers to reduce their excess inventories. As such, we project a companywide revenue decline of 18.1% year on year in 2023.