Earnings Call: Q3 2021

Feb 5, 2021

My name is Yoshida. Today, I would first like to explain the consolidated financial results for the Q3 of the fiscal year ending March 2021. And then Mr. Kainuma, Representative Director, CEO and COO, will playing the highlight of this fiscal year. Next page, please. Consolidated net sales for the Q3 of the fiscal year ending March 2021 was up 3% year on year and up 0.5% quarter on quarter to total 275,000,000,000 709,000,000 yen Operating income was down 15.9% year on year and up by 11.6% quarter on quarter to total 19,595,000,000. Profit for the period attributable to the owners of the parent was down 15.9% year on year and up 22 0.2% quarter on quarter to total 16,000,000,000 yen Our operating income for this quarter includes Special expenses are totally totaling approximately JPY 800,000,000 incurred due to impact of COVID-nineteen, etcetera. We estimate that the foreign currency translation have a year on year impact of minus 6,600,000,000 yen in net sales and minus 1,300,000,000 yen in operating income. Quarter on quarter impact was minus 1,400,000,000 yen in net sales and minus 700,000,000 yen in operating income. We made a slight retrospective changes to last fiscal year's financial statements due to the PPA for Yuxin. Please note that figures on the following pages are revised figures. Next Slide please. This is for a quarterly trend in net sales operating income and operating margin. The operating margin for the 3rd quarter was 7.1%, down 1.6 percentage point year on year and up 0.7 percentage points quarter on quarter. Next slide, please. Here shows the difference between the forecast as of November and actual results for net sales and operating income by business segment for the 3rd quarter. Despite lower than expected sales to the aircraft industry, Sales for the machined components business segment exceeded the forecast, thanks to robust the sales to the other industries, mainly to Automotive Industry. Sales for the Electronic Devices and Components business segment were higher than forecasted. Thanks to the strong sales of motors and electronic devices. Sales for the Mitsumi business were higher and projection across the board, including mechanical components and analog semiconductors. The Yuxin business enjoyed a higher than expected sales due to the recovery of the automobile market. Operating income for the machine components business segment was higher than projection, thanks to the growing external shipment volume of ball bearings, Along with the improvement in profitability, the electronic devices and components business, the Mitsumi business And the Yushin business enjoyed higher than expected operating income as a result of increased sales. Next slide, please. Now let's take a look at the results by segment, starting with Machined Components Business segment. The left graph indicates quarterly net sales trends. And on the right, bar chart shows the quarterly operating income trends along with a line chart for operating margins. The 3rd quarter net sales increased 4.4% quarter on quarter to total 39,700,000,000 yen. Above bearing sales increased 8.4% quarter on quarter to total 28,100,000,000 yen The monthly external shipment volume was up 13.8 percent quarter on quarter for an average of 222,000,000 units. The growing shipment volume of automotive ball bearings continued to drive sales upward. Sales of aircraft bearings remained sluggish due to the stagnant market. Sales of broad ends and fasteners So totaling 6,300,000,000 yen were down 9.5% from the previous quarter. Aircraft manufacturing rate has not yet recovered and is expected to remain in the doldrums. Sales of Pivot assemblies increased 3 point 2% quarter on quarter to total 5,300,000,000 yen Operating income for the quarter totaled JPY 3,300,000,000 and the operating margin was 20.9%. On a quarter on quarter basis, Operating income rose 20.3%, while the operating margin improved 2.7 percentage points. Looking at the results by product, Profits for ball bearings, rod ends and fasteners and pivot assemblies all increased quarter on quarter. Next slide, please. Now let's look at the Electronic Devices and Components segment. Net sales decreased 8% quarter on quarter to hit 90,700,000,000 yen Looking at the results by product, we see that sales of motors increased 8.5% quarter on quarter to reach 53,300,000,000 yen This is because the growing demand for energy efficient products, mainly in the automotive market, kept sales of all types of models up. Sales of electronic devices were down 29.4% from the previous quarter to total 28,100,000,000 yen This is because the peak demand for our major customers' models that use our LED backlights came to an end. Sales of sensing device totaling 8,200,000,000 yen were down 5.3% from the previous quarter. Operating income came to 4,300,000,000 yen and operating margin was 4.7%. On a quarter on quarter basis, operating income fell 21.9%, while the operating margin dropped 0.9 percentage points. By product, the operating profit of motors increased, but that of electronic devices and sensing devices went down due to the decline in sales. Next slide, please. Let's take a look at the performance for the Mitsumi business segment. Net sales rose 3.2% quarter on quarter totaled 114,300,000,000 yen While sales of mechanical components went down as the peak demand period has passed, Sales for other businesses grew due to mainly steady sales of optical devices and semiconductors. Operating income totaled 10,000,000,000 yen while the operating margin reached 8.7%. Operating income was up 30.8% quarter on quarter, while operating margin was up 1.8 percentage points for the same period. This is due to the better product mix in profitable businesses such as optical devices and analog semiconductors. Moving on to the next slide. Finally, let's take a look at the Yushim business segment. Net sales increased 15.6% quarter on quarter to hit 30,700,000,000 yen. Sales increased as the overall automotive market rebounded, although the level of recovery varied by region and customers. Operating income came to 1,700,000,000 yen and operating margin was 5.4%. Operating income was up 39 0.4% quarter on quarter, while operating margin was up 0.9 percentage points for the same period. On top of the improved profitability due to the recovery of sales, through improved quality and productivity and strengthened management system following the business integration led to an increase in profit following the previous quarter. Moving on to the next slide. The bar graph here shows trends in profit attributable to owners of the parent, while the line graph chart changes in the profit for the period per share. The profit for the period was 16,200,000,000 yen. Earnings per share was 39.6 yen. Next slide, please. Next is the quarterly inventory trend. At the end of the 3rd quarter, inventory totaled 174,300,000,000 yen which is 12,200,000,000 yen less than what it was 3 months ago. This is due primarily to the fact that the inventory strategically accumulated at the end of the Q1 was sold in stages as expected, while securing the inventory needed to increase sales that is currently expected. Next slide, please. This graph contains a bar chart showing trends in net Interest bearing debt, which is total interest bearing debt minus cash and cash equivalents and a line chart indicating free cash flows. At the end of the 3rd quarter, net interest bearing debt totaling 121,700,000,000 yen was up 46,500,000,000 yen from the end of the previous fiscal This figure includes the cost of acquiring shares in IBLIC, 33,900,000,000 yen and the cost of additional acquiring shares in C and A, 4,600,000,000 yen Net interest bearing debt is expected to increase from the previous forecast the end of March 2021 to 90,000,000,000 yen This is mainly due to an increase in working capital resulting from higher than expected sales in the 4th quarter and is expected to decrease to around 60,000,000,000 yen by the end of June, mainly due to progress in collecting sales proceeds in the Q1 of the next fiscal year. Next slide, please. We made an upward revision to the full year forecast for the fiscal year ending March 2021, which we had also revised last November. This latest revision was prompted by higher than projected 3rd quarter results and expectation that demand for electronic devices, semiconductors, ball bearings, etcetera, will continue in the 4th quarter. We have revised the forecast for net sales from 940,000,000,000 yen to 980,000,000,000 yen for operating income from 50,000,000,000 yen to 58 1,000,000,000 yen respectively. Well, temporary expenses related to restructuring and the PPA for ABLIC totaling JPY 6,000,000,000 to JPY 8,000,000,000 may be incurred. We are currently scrutinizing this and did not factor them into the above mentioned and performance forecasts. Once we have the exact figures, we will revise the forecast as needed. The exchange rate assumed to be 103.5 yen to the U. S. Dollar. Next slide, please. This slide shows the forecast by business segment. This is all for my presentation. Good evening. This is Kainuma. And Page 14 onwards, I would like to use in order to you. As you may be aware, this year in May, We showed the fiscal year's target in the form of a range from JPY 50,000,000,000 to JPY 60,000,000,000. And in November, This floor of 50,000,000,000 yen we showed to you. As I spoke repeatedly in the past, ever since I joined the company, What I have been told repeatedly was that bearing is the indicator of the economic performance. And when things start to improve, it usually starts with bearings. And October was 187,000,000 units and then followed by a 210,000,000 yen 2.19,000,000 yen 2.13 230,000,000 in December, but number for January may have been too conservative, and I would like to apologize. The demand stronger demand than anticipated is now generated. I strongly feel that and at the end of November, I was not feeling such a strong demand. However, in January to March period, We are seeing even stronger demand. So to be quite honest with you, I Thought I should put up a 60,000,000,000 yen target, but after all, it's semiconductors. And therefore, I keep this conservative target of JPY 58,000,000,000. And several times, we had semiconductor related issues. But in actuality, we would like to achieve increased profit and increased sales. So post COVID-nineteen enhanced structure, This year, at this conference call, the message I want to convey to you is that We are tackling with this task to put together post COVID-nineteen structure as a united force. So our monthly capacity is 250,000,000 yen per month, 200,000,000 250,000,000 yen per month and 10,000,000 yen each we added. And therefore, we were to achieve 270,000,000 yen However, thanks to improved productivity, It was likely to reach 350,000,000 yen but looking back, our production capacity, It went up to 325,000,000. As a matter of the fact, for March, the anticipated production volume is JPY 314,000,000. And it's a fact that we can handle these many units. So it's an evidence that we can actually achieve this number. Against Such backdrop, this time as well, The pre investment and efforts we made in the past in order to improve productivity, Now that demand is improving and we are able to handle that because we have already been working on it, And we have always made preemptive strike to be prepared for the future movement. And this Time around, we are making new investment once again to reach 345,000,000 to be realized by the end of next fiscal year. And due to this, the existing Plants, there will be no additional capacity. So we are full, so to speak. However, in terms of the machine components business, we are putting in a lot of measures to And further enhancing our structure in May, when we announced our full year results, we will give you some figures and explain more in detail about this. That's my thoughts. So Minebe, Mitsumi, So once we had more than 72,000,000,000 of operating income currently, more recently, because of the trade war between the United States and China. And then we have to go through the COVID-nineteen situation. The next year, the operating profit has started to go down. So what type of growth products will be driving the MINI by Mitsubishi when this question is asked? I Clearly, I can say there are 4 products. I want to point to these 4 products. 1 is ball bearings. Next from next year onwards, we're going to grow substantially The camera actuator business or OIS related products and motors And analog semiconductors, these four products for the time being will drive our business. I'm very confident about this. Promoters. So 200,000,000,000 yen of sales has been achieved, and next year, we want to achieve more than 230,000,000,000 yen. And so after that, 280,000,000,000 yen is a target for motors. And different types of motors have started to we have started to see a sales pickup for various types of motors, and that's good. And for semiconductors, in 2 to 3 years' time, Operating income, JPY 10,000,000,000 will be the target. That was what we have said. But I think we will be able to achieve that this year Because the semiconductor demand is very strong, and that is backed up by this. For next year onwards, The semiconductor will continue to grow. So the 7 Spears, out of the 7 Spears, the 3 Spears will be at the forefront. It is related to smartphones, but the OIS, this new growth product. For our side, we will clearly put these products on the forefront and growth as a business. So for these four products, I will explain more in detail and clarify that in May when we announced our full year results. So what I'm always saying is that these gains, Backlight won't go away. So in terms of the backlight business, The inquiries are stronger than we have expected. So in terms for future scenario, We are not anticipating that the backlight business will go away. And going to Page 16. Excuse me, this is Page 15. On the lower right hand side, please look at the chart on the lower right hand side. In 2017, in May 2017, we announced our results. For the following 10 years, we announced our growth strategy By March 2021, fiscal year March 'twenty one, what how do you want to be? So meaning this year, What should we anticipate? So we were assuming that we'll be able to achieve 100,000,000,000 yen. And this is diagram we showed you. So maybe I'm making excuses, but unfortunately, after the announcement, The U. S.-China trade friction started, so we were damaged severely by this. And this year, From January from the last fiscal year, from January February last year, the COVID-nineteen situation has And this was a major damage for us, so we have not been able to grow a business as anticipated. But what I want to say today is that By March 2023, maybe we are want to go very close to what we have anticipated, And maybe we'll be able to realize that. So for the machine components, So bearings will be producing 300,000,000. We're producing more than 300,000,000 for ball bearings, so we can do that from next fiscal year. Electronic devices and components, motors will be a big driver. And the sales that I have said will start to show up. For Mitsubishi business, this they have the 2 pillars, OIS and semiconductors. The profitability of these businesses will start to appear. And Mr. Yoshida has touched upon the Yushin business. For the Yushin business, We are going through we're planning to go through a structural reform. So with the local labor union, we have There are some legal issues that we have to clarify. So at this Point, I cannot give you what magnitude this will be. But I think basically, you'll have to go through structural reform. In May, again, I think I'll be able to talk more in detail about that. So in the post COVID world, So for the second half of next year, that is from December onwards, I think gradually the business will start to pick up. As part of our business, we'll go back to what it was. So the aircraft industry We'll start to recover. So based on we have the scenario in mind. So right now, the aircraft industry is very dark. But these old aircrafts Will be scrapped. For course, aircraft industry, they have to Pay high and big money for the maintenance. So for efficiency sake, they are going to scrap these old aircraft. So once the recovery sets Tim, I think what the aircraft version of the automobile industry will start because the mobility of the people It will be more than before once we overcome this situation. So for the aircraft alone, more than JPY 12,000,000,000 impact was seen on the operating income. But once This business recovers. From a year after that, we think we'll be able to go over 50,000,000,000 yen Regarding motors, as I said a little bit previously and as I always say, If global GDP increases, then high income people will increase, and therefore, more aircraft components of wholesale. And various kinds of motors are being used centering around automotive motors, and we are to enter into such space. And that is going to be the core part of the growth strategy of electronic parts and components. And Mitsumi, I said that OIS will be growing in analog semiconductors, and the target is 15,000,000,000 yen for 2 years from now. And hot market situation is likely to continue for some time, and we are implementing various measures in order to improve production capacity. I Should be able to give you more details in May. So looking at the overall situation, Mitsumi's 30,000,000,000 yen is not at all unrealistic. And using, as I said, by taking various measures. What we promised at the outset, 10,000,000,000 yen We would like to achieve this number as soon as we can. Turning to Page 16. Having said all that, as we held the internal discussions, Share buybacks, it may be better some people said that It will be better to announce share buybacks in May, but I decided to announce the decision. Now nobody knows what will happen in the future, but We do think that the future will be rosy and promising. And right now, share price is low, and there is a huge gap between the realistic price and the current price. And therefore, 10,000,000,000 yen will be the amount of share buybacks. So we made this decision. And why 10,000,000,000 yen If you could move on to the next page, Page 17. This is another thing that we promised you. Half of free cash flow should be spent for shareholder returns. That is what we promised you. From March 2019 Onwards, you can see the dividend and the share buyback ratio. And adding up all 3 years, the dividend, JPY 34.3 1,000,000,000 yen and the buyback, 35,800,000,000 yen So 34,300,000,000 yen 35 800,000,000 yen respectively. So we have been conducting share buybacks in this way. And it will be 50% when it becomes 10,000,000,000 yen. So that is the reason why we are conducting this much share buybacks. And the dividends are shown on Pages 18 the Page 18. The dividend amount is to be 28 yen per share. In the following page, You can see a topic that I want to share with you briefly. First of all, B2C business. I always had this in my mind. And in order to study The environment and to make a social contribution, we sold surgical masks And 6,000,000 pieces of masks that we made were sold, And we were able to make a contribution to the society, and we should keep working on this Given the current situation, and I put an article or advertisement in newspaper Today, we have no intention of making money from this activity. And also, the other 2, a small step forward From Yushin, Smart Lock was launched. And Salyo Pico, It's a lighting device. Using smartphone, The lighting can be attenuated. It may be difficult to see, but Please look at better pictures on our website. So B2C business, we are studying various possibilities. And as a new methodology or new attempts, we would like to expand our sales and profits going forward. Very quickly, I have shared with you some important points. Next, we are going to a Q and A session. The first question is coming from Goldman Sachs, Takayama san, please. Thank you. Can you hear me? Yes, please. I have three questions. First, about the ball bearings business. So currently, 325,000,000 is the current capacity. And I think in March, it's going to be very close to 100%. For next fiscal year, will there be any bottleneck for the supply or will there be any tightness in supply? What is your outlook? And I would like to learn about your inventory as well. And in terms of the profitability, So Mr. Kainuma, you said that when things are not bad, so cost And productivity has improved, and then that will generate profits. So even if the aircraft business doesn't come back that strongly, But the other businesses will come back. So maybe 25% or more of the profitability from machine components, Even without the aircraft industry, is that possible? Can you give us your view on that? So if I'm yes, I think the spot will become tight. But As I have been saying to you, so a low price bearings, well, can be sold into the market? Well, not us, but from us. But basically, I think the customer demand can be satisfied because of those types of ball bearings, low cost cost bearing ball bearings. And the pivots may be going down a bit. So for this 1 year, the inventory will not be that high. Because we have reduced inventory once it will be tight, but at the current if we consider I think we'll be able to cover that. And when we cover that, what is going to happen to the profit? So what I'm saying to the business units is that even if the aircraft business doesn't recover, The profit of the we're having from the aircraft industry and the pivots and the ball bearings, Maybe altogether, let's achieve a JPY 10,000,000,000 of profit per quarter. So we don't know until we actually start operating, but I think we'll be mainly in line with that. So once the aircraft business comes back, So you talked about $12,000,000,000 plus. So meaning that the $52,000,000,000 or $53,000,000,000 machine components profit will come into our view. So that's what I'm thinking. Understood. Thank you. The second question is about analog semiconductors. So I think you bought this business at very good timing. So Mitsu including what Mitsume has originally had, so this What type of sales is will be this year and how was the potential for that increase for next fiscal year? I think this will be a very busy business. So what will be the scale of this business? So in terms of sales, we are looking into detail. In March, we will come out with a budget. I will not I do not want to mislead you, but the unit price is going up. So by increasing the unit price And in terms of what we're going to produce, we already have a plan in place. So we will So producing those type of products, I think that is the image that you should have. So the sales of the semiconductor per se, Have we always discussed that? Yes. It has been about 60,000,000,000 yen And this year will be more or less close to that number. And from that, for next fiscal year, As Mr. Kainamo has said, we are investigating that in detail, but we think we'll be able to grow from the 60,000,000,000 yen. So JPY10 1,000,000,000 in 2 to 3 years will be achieved next year, but not 10,000,000,000 yen but as soon as the capacity or as long as output is There, maybe you can achieve that. Maybe is that too optimistic? No. This year, I said this fiscal year, we're going to achieve 10,000,000,000. So this year, we're going to achieve 10,000,000,000, but this is really unexpected. So this is like a windfall for us. So if that is the case, next fiscal year, we go over Of course, we'll be over 10,000,000,000 yen by how much? In May, I think we'll be able to talk about that. So lastly, so OAS, Ken, you gave me some quantitative answers. So maybe 1000000000 of actuator, so our 100,000,000,000 yen maybe It went down, but next fiscal year, the technology is going to change. And maybe this month, it would be Next year, when people will take up these new technologies, so what type of sales are you anticipating? So is it going to double or 1.5x? Is that the level of sales that you're anticipating? So we have explained it around JPY 100,000,000,000. So for the Chinese smartphones, It has been damaged, but for the North American market, it's going very well. Well, we can't offset all of the downside. But that said, I think we have been able to offset that substantially. So against original sales plan, maybe 80% level currently at this level, I think we would be able to achieve. So for next fiscal year, as you know, So in terms of the smartphones, more and more smartphones is going to use this new OS, we are anticipating that. And As Togayama san, you have just mentioned, the range that you have mentioned, I think that Level of sales increase, the range of sales increase can be expected. Understood. Thank you. Let us move on to the next question. Morgan Stanley, MUFG Securities. Mr. Sato, please. This is Sato. Thank you for this opportunity. Please begin. I have three questions. First one is about Mitsumi. In FY 2021, I think you are expecting increased sales and increased profit. And games may decline and semiconductor and OIS will grow? Or games, OIS and semiconductors, all of them are all of them expected to grow? What is your view on this? And consignment sales of games from 40,000,000,000 yen almost 40,000,000,000 yen in Q2. How it changed over the time? First of all, I, Yoshida, would like to share with you numbers. Q3, 33,000,000,000 yen and Q4, 15,000,000,000 yen. Those are the expectations. And as you said, you said fiscal 2021. Now you are are you talking about next year? Yes. Yes. So you want to know what the situation of game business will be next year? At this point in time, the market It's still undersupplied, and that is how we look at it. And looking back, in retrospect, the COVID 'nineteen and people staying at home. So there was this favorable wind. And if it continues, I think game business will stay solid, but it may have something to do with the number of the cases, the number of people who are infected. But in May, I think I will be able to share with you more specific numbers. Understood. My second question is about motors. The automotive motors Sales are growing. I can see that. But the TVD Motors, the competitors are raising prices And, Minobe Mitsumi, as HDD demand is shrinking, Are you planning to make a capital investment in order to increase capacity? Or are you going to maintain the same capacity and do it within that capacity. I cannot share with you the details, but basically, we must make investment. Otherwise, We will not be able to keep up with the demand. Our production will not be able to keep up with the demand, so we must increase our production capacity. I see. My third question is about the numbers. Above bearings, the internal and external sales and the production volume, actual and forecast. So Q3 External sales and the unit is 1,000,000 pieces, 211, 220, I mean, that was October November December, 234 January, February March, 2.40, 2.18 and 2.50. And internal sales from October, once again, unit is 1,000,000, 57, 54, 56, 58, 60, 57. I see, 58, 60, 57 from January, 50 8, 60, 57. Thank you very much. What about the production volume. Likewise, from October, 247, 276, 2.82, 2.73, 3.15. And recently, is it progressing in line with the numbers you have just shared with me? Or is there an upside? Well, I have just shared with you the latest numbers I see. Thank you. Let's go to the next question From Mitsu Securities, Goto san, please. Hello. Can you hear me? Yes, please go on. Thank you. I have two questions. One is about Mr. Kainuma, you have made a you have become more and more powerful in your presentation for this quarter. So the background, can you explain why you are so powerful today? You talked about the ball bearings. And Things have turned to the better recently, maybe that is the reason or Motors, etcetera, the things that you have to strive to improve, you feel that things have advanced and You have more confidence of being able to reap the fruits for next year or maybe both, maybe. Can you give me more color about why you feel so confident? Yes. It's exactly what you have said. It's both, actually. For the ball bearings, as I've said at the beginning, this is a kind of indicator of the economy. So We are basically we have a share of the global economy. So we are impacted whether we like it or not. So that is the reality. So this time around, we thought the ball bearings business recovered. And at that Timing, the other businesses start to recover. And in terms of the unofficial orders for the ball bearings for the next fiscal year, it's quite strong. So basically, I think we are just riding the wave of the trend of the global economy. And if we have the I think we can sell against that following. And we talked about the 4 growth products, not only ball bearings, but Semiconductors, well, a couple of years ago, this was a wealth making business, but we want to bring this to 10,000,000,000 yen and There are some external factors, of course, that impact us. But through the efforts of our employees, Earlier, by many years, we have been are going to be able to achieve that. And next year onwards, We think that this situation will continue. So this is basically in line with the trend of the environment. Well, EV, electrification, through various reasons, our analog semiconductor demand is quite strong. And in terms of the OIS, it's going to the new phase. And In 4 to 5 years, this demand for OES will continue, and it will grow. And we have been steadily putting in efforts for motor business, and now we are able to sell more volume. So we are taking a second vendor strategy. So we are not looking for the top notch position. But Within the motor industry, the development of the motor industry under various conditions is happening. For instance, maybe fans, models for fans, well, it is double compared to the more recent years. So under these various situations, I think we are seeing more sales of motors. But as a trend, This I think we can our business can straightforwardly receive the benefits of these trends. And that's very I think it's very good. So we have spent a long time trying to develop this business. So these 4 products, the future core products and for other products as well. So we said I said it was the 3 spheres as the 7 spheres. For the other 4 spheres, it is growing steadily. So in that sense, I'm thankful. And the backlog business is not going to go away. That's for sure. And the recurring business, all the customers are looking at that. So not only the high end business is going to grow, but the low end business is going to grow as well. So that is what we have experienced this year. So all this combined, maybe It seems that way, but I had this determination that this is a strategy that I'm going to take, and I have been disclosing that to you. So I'm not Just it's not only hot air. I think our product if you look at our product sales, I am quite confident that we'll be able to achieve that level of sales. My second question is about the ball bearings. I want to know more in detail. For instance, March, you talked about 250,000,000 in terms of external sales compared to the past, it seems to be at a quite high level. So what applications And how much has increased? Can you give me the breakdown? Well, I don't want to go into detail in this business that much, but roughly, Mr. Yoshida will give you some information. From May onwards, we won't be disclosing this level of detail, but anyway. So what is strong is Automotive, automobiles, that is very strong. And it is continuing to increase the sales. Sales is growing. And other businesses will be Well, other businesses' sales are increasing. In home appliances, Bulgarian for home appliances, sales is increasing for that. For Q on Q between Q3 and Q4, In various products, We think the sales is going to increase the volume is going to increase. So it's not the case of this one specific factor. So for instance, fishing rods or like stay at home related products, I think that is one factor that you can consider. So you talked about on automobile. So with the rapid recovery of the production And then I think basically, people inventories piling up. So this is kind of cyclical. In terms of stay at home, whether this [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] It's going to continue or not. I think you need to discuss about that. But the sustainability of this level of demand will I think you think that this will go into next fiscal year. So we shouldn't be too much concerned about that? Well, to be frank, About the global economy, I don't nobody will know. So if Well, if I knew what's going to happen for the global economy, I won't be sitting here. But I am always saying that With the development of global economy will lead to a high end products will be selling more and high end components also will be solved. So with the COVID and the U. S. And China, trade fixing was put a downward pressure against this trajectory. But this will go back to the what has been anticipated. Maybe you should have that image. Well, basically, that's all I can say in terms of the future outlook. And I think it's quite natural to think that's going to happen. Understood. Thank you. We only have limited amount of time, and therefore, the next question will be the last. Mr. Akizuki from Nomura Securities. I have two questions, if I may. First, About electronic components, the upward revision from November In sales, a JPY 13,000,000,000 revision was made. And would you be able to share with me the split of this number? That is my first question. Motors, About 5,000,000,000 yen 7,700,000,000 Electronic Devices Sensing was downward downwardly revised and the backlight was upwardly revised. Am I right? Yes. And accordingly, you have made a revision upward revision for profit. And in terms of marginal profit, is it in the same proportion? I cannot share with you the numbers such numbers regarding motors. I see, understand. My second question is, well, Mr. Kainuma was mentioning that he may go into new business. And what is your view on the Chinese New Year? This year, The Chinese government did not encourage people to go home to celebrate Chinese New Year. And it seems that Chinese and Taiwanese companies, many of them are still making good in plants. So what is your view on keeping the factories running during the Chinese New Year? And what about your peers? Well, it depends on the customer. Some customers may stop operation and some may keep operation. But in our case, all locations, all All factories will keep operating during the New Year, Chinese New Year. Is that because You are very busy. And also, the Chinese government seems to encourage that both because if they go home and something happens, we would have to carry out a screening of the employees who come back from their hometowns, whether to see whether they have infected or not. So after the Chinese New Year, the production may drop if something happens. And of course, the Chinese government policy is one thing that we appreciate. And safe operation is our top priority, and our employees fully understand that. So all of our plants will keep operating during the Chinese New Year. I see. Thank you. So this ends the Q and A session. This ends the meeting for today. Thank you very much for your participation. Thank you.