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In Japan, The Kumamoto Earthquake Did 'Major Damage' To At Least One Local Plant

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In Japan, The Kumamoto Earthquake Did 'Major Damage' To At Least One Local Plant

The magnitude 7 earthquake and its aftershocks that have been hitting Japan over the last few days have investors worried about damage and disruptions of local businesses. In a series of reports out this week, Citi analysts address the impact the quake has had on a number of companies with exposure to the area.

Transportation

Analyst Mitsunobu Tsuruo believes that ”the direct impact of the Kumamoto earthquake will be limited” when it comes to West Japan Railway. He noted that there has been no reported damage to the company’s assets.

Related Link: Goldman: Japanese Earthquake's Impact On Honda, Kyocera And Others

Plants Throughout The Area

Analyst Kota Ezawa reported that Sony Corp (ADR) (NYSE: SNE)’s plants in Nagasaki, and Oita CIS plants have restarted operations, and Citi believes its Yamagata facility is operating normally. Ezawa noted that Sony’s Kumamoto plant reported no injuries, deaths, fires or gas leaks following the initial earthquake, but said “the situation may have worsened as a result of the subsequent quake.”

For Nippon Synthetic Chemical, the original quake caused little damage. However, analyst Atsushi Ikeda reported that the April 16 quake “did cause major damage” and that there is “no timetable for when production will re-start.”

Food And Beverage Sector

For the food industry, analyst Nobuyoshi Miura reported that there has been no reported damage at local plants owned by the following companies: Kirin Holdings, Asahi Group Holdings, Sapporo Holdings, Maruha Nichiro, Meiji Holdings, Morinaga Milk Industry and Megmilk Snow Brand.

He noted that there have been slight damages to the Suntory Beverage & Food Kyushu Kumamoto plant.

“We think that retail prices may rise in some areas due to shortages,” Miura concluded.

Auto Industry

Analyst Arifumi Yoshida said, “Domestic auto production could potentially be broadly impacted” by the quakes. Toyota Motor Corp (ADR) (NYSE: TM), Honda Motor Co Ltd (ADR) (NYSE: HMC) and Nissan all operate assembly plants in the impacted area.

Disclosure: The author holds no position in the stocks mentioned.

Latest Ratings for TM

DateFirmActionFromTo
Mar 2020UBSUpgradesNeutralBuy
Sep 2019Morgan StanleyDowngradesEqual-WeightUnderweight
Nov 2018JP MorganUpgradesNeutralOverweight

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Related Articles (HMC + TM)

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