china / hong kong company focus johnson...

In Singapore, this research report or research analyses may only be distributed to Institutional Investors, Expert Investors or Accredited Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore.

“Recipients of this report, received from DBS Vickers Research (Singapore) Pte Ltd (“DBSVR”), are to contact DBSVR at +65 6535 9688 in respect of any matters arising from or in connection with this report.”

www.dbsvickers.com Refer to important disclosures at the end of this report

ed-OY / sa- AH

BUY HK$5.10 HSI : 21,698 (Initiate Coverage) Price Target : 12-Month HK$ 6.50 Reason for Report : Initiation Potential Catalyst: Fast growth in Hybrid/ EV car sales DBSV vs Consensus: Expect higher sales growth from CFM products but net profit slightly below consensus as we are more conservative on near term margin improvement. Analyst Galant Ng +852 2971 1707 [email protected] Dennis LAM +852 2971 1922 [email protected]

Price Relative

0.9

1.9

2.9

3.9

4.9

5.9

Oct-08 Oct-09 Oct-10 Oct-11 Oct-12

HK$

63

83

103

123

143

163

183

203

223

243

Relative Index

Johnson Electric (LHS) Relative HSI INDEX (RHS)

Forecasts and Valuation FY Mar (US$ m) 2012A 2013F 2014F 2015F Turnover 2,141 2,248 2,387 2,555 EBITDA 314 329 340 352 Pre-tax Profit 221 239 256 274 Net Profit 187 202 217 232 Net Pft (Pre Ex.) 187 202 217 232 EPS (US$) 0.05 0.06 0.06 0.06 EPS (HK$) 0.40 0.44 0.47 0.50 EPS Gth (%) 4.6 8.3 7.3 6.9 Diluted EPS (HK$) 0.40 0.44 0.47 0.50 DPS (HK$) 0.10 0.11 0.12 0.13 BV Per Share (HK$) 3.16 3.48 3.84 4.22 PE (X) 12.6 11.7 10.9 10.2 P/Cash Flow (X) 7.9 8.8 8.0 7.8 P/Free CF (X) 10.2 13.2 11.6 11.0 EV/EBITDA (X) 7.0 6.3 5.6 5.0 Net Div Yield (%) 2.0 2.1 2.3 2.5 P/Book Value (X) 1.6 1.5 1.3 1.2 Net Debt/Equity (X) CASH CASH CASH CASH ROAE (%) 13.2 13.2 12.8 12.4 Earnings Rev (%): New New New Consensus EPS (US$): 0.06 0.06 0.06 Other Broker Recs: B: 3 S: 1 H: 4

ICB Industry: Industrials ICB Sector: Electronic & Electrical Equipment Principal Business: Providers of motors and motion subsystems Source of all data: Company, DBSV, Bloomberg, HKEX

Quiet evolution prompts re-rating

• BUY Johnson on its evolution from low-end motor maker into a high value-added auto and industrial component supplier

• Energy saving cooling fan modules for hybrid cars a key growth driver

• High end valuation justified by market gains in higher valued products, consistent free cashflow yield and potentially higher dividend payout

Morphing into a high value-added component supplier 50- year veteran, Johnson Electric has been long overlooked by a market which has historically branded it as a low-end motor manufacturer. We foresee an imminent re-rating once the market recognizes the concerted make-over the company has undertaken in recent years, transforming it into a high value-added auto parts supplier, and one of the largest industrial component suppliers in the world.

Environmentally-friendly cooling fan modules (CFM) to drive automotive segment. We think Johnson’s increasingly significant cooling fan modules (CFM) business (part of the company’s Auto Products Group (“APG”)) (20% of the total revenue) could comfortably outperform the global auto market growth rate. Hybrid vehicle sales are estimated to grow at a CAGR of 19% in 2011-2015 (according to Pike Research). This will drive demand for Johnson’s higher end CFM products as Johnson are one of the few quality suppliers able to supply these to hybrid vehicles. We estimate CFM to constitute over 70% of Johnson’s growth in FY13E.

Higher valuation justified. Johnson has traded between P/E 8x-15x over the past 3 years. Although the share has already bounced from its recent lows, we think the stock could yet test the upper end of this range, as more credence is given to the company’s steadily improving market position, strength in higher-end auto components, consistently high FCF yield (c.9%) and higher dividend payout potential. Johnson’s share has lagged other HKEx listed industrial stocks despite the company demonstrating similar market dominance, strong corporate governance and as consistent an operating performance as its peers. We believe this longtime laggard can thus catch up with its peers and we initiate coverage with a BUY rating and a TP of HK$6.5 based on a high end 14.5x FY13E P/E.

At A GlanceIssued Capital (m shrs) 3,604Mkt Cap (HK$m/US$m) 18,381 / 2,372Major Shareholders (%) Wang Koo Yik Chun 60.84

F ree F loat (%) 39.16Avg Daily V olume (m shrs) 1.9

DBS Group Research . Equity 22 October 2012

China / Hong Kong Company Focus

Johnson Electric Bloomberg: 179 HK | Reuters: 179.HK

Company Focus

Johnson Electric

Table of Contents

Investment Summary 3

SWOT Analysis 7

Company profile 8

Competitive Strengths 11

Business analysis - Automotive Product Group (APG) 14

Business analysis – Industrial Product Group (IPG) & other businesses 21

Financial – Income Statement 26

Financial –Balance Sheet 29

Financial –Cash Flow 29

Future Opportunities 30

Key Risks 30

Valuation 31

Appendix 38

Mabuchi Motors (6592.JT) 41

Nidec (6594.JT) 42

Bosch (private company) 43

Brose (private company) 44

Company Focus

Johnson Electric

Investment Summary Evolving into a high value-added component supplier. Although long regarded as a low-end motor manufacturer, Johnson has undergone something of a ‘quiet revolution’, evolving almost unnoticed by the market in recent years into a high value-added auto parts supplier, and one of the largest component suppliers of industrial products. Testament to the increasing technological content in Johnson’s products and their ability to continuously upgrade product quality, the massive surge in raw material prices over the past 6 years has wreaked very little damage on the company’s consistently healthy gross margins.

We believe Johnson has historically been partially a victim of perception, long seen by the market merely as just another low-end industrial play. As such, we believe the share price has not yet reflected the quiet transformation in the company’s products and its rapidly improving fortunes.

GP margin remains resilient despite rise in copper price

FY06 FY07 FY08 FY09 FY10 FY11 FY1221

22

23

24

25

26

27

28

-50%

0%

50%

100%

150%

200%

250%

300%

Johnson's GP margin since FY06Copper price movement since 2005

Source: Bloomberg, Company, DBS Vickers

Hybrid vehicles a key driver for growth. A key source of future growth for Johnson is the auto industry’s increasing appetite for higher quality cooling fan modules (“CFM”) used in hybrid vehicles. Johnson is fully exploiting this demand as one of the few suppliers of these motors used in hybrid and electric vehicles. The CFM sub-segment has significantly outperformed the broader market, growing 34% and 17% y-o-y in FY11 and FY12 respectively, against global auto production growth of only 3% y-o-y in 2011. We expect the CFM business will grow at 18% and 13% to US$495m and US$557m in FY13E and FY14E respectively, and will represent more than 70% of Johnson’s growth in FY13E.

CFM outperforms global auto sales growth

0%

5%

10%

15%

20%

25%

30%

35%

40%

FY11

FY12

FY13

F

FY14

F

FY15

F

FY16

F

FY17

F

CFM sales growth Hybrid growthGlobal auto sales

Source: OICA, Pike Research, DBS Vickers, Company

We estimate Johnson’s market share at 4.6% and 5.2% for the cooling fan market (including non hybrid) in FY11 and FY12. Using history as a guide to the potential impact CFM could have on Johnson’s fortunes over the next few years, a key driver of Johnson’s revenue over the past two decades was the development of Electronic Power Steering (EPS). EPS in turn created huge demand in brush DC motors from the 1990s onwards benefitting Johnson and which the market duly rewarded at the time. If history is anything to go by, we think the Hybrid/ EV CFM product line could therefore be Johnson’s new EPS story over the coming decade.

Johnson outperforms the Global auto market

-20%

0%

20%

40%

60%

80%

1986

1989

1992

1995

1998

2001

2004

2007

2010

2013

E

Global Auto Production GrowthJohnson Rev Growth

2012

E

Source: Company, OICA, DBS Vickers

Company Focus

Johnson Electric

The growing case for a higher dividend payout.

Before the financial crisis, the company used to operate a higher dividend payout ratio of above 50% between FY04-FY08. Johnson prudently opted to reduce the dividend payout to 25%-30% during FY10-FY12 due to global economic uncertainties. Looking forward, as the market recovers; we believe the company may increase its dividend payout ratio if no major acquisition takes place, supported by a strong net cash position of US$192m in FY12. For a company with such strong and consistent free cashflow yield, we believe this could potentially trigger a re-rating.

Premium valuation justified, Initiate with a BUY.

Johnson has traded on a P/E of between 8x-15x over the past 3 years. Although Johnson’s share price has rebounded from its recent lows, we believe a further re-rating to the high end of the above range would be more than justified. This is due to Johnson’s continually improving market position in the higher end auto component space (CFM), its consistently high FCF yield of 9% and potentially higher dividend payout.

Finally, we believe a continued re-rating is warranted due to the fact that, despite investors traditionally favouring companies with strong market positions, great corporate governance and consistent operating performances, despite Johnson boasting a similar track record in all of these areas, its share price performance still lags compared to other HKEx listed industrial stocks such as Techtronic (669 HK) and VTech (303 HK).

We initiate coverage with a BUY rating and a TP of HK$6.5 based on a 14.5x FY13E P/E, close to the high end of its historical trading range. The closest peer to Johnson would be Mabuchi (6592. JP), which currently trades at a FY12 P/E of 22.6x.

Dividend Payout

0

10

20

30

40

50

60

70

FY0

3

FY0

4

FY0

5

FY0

6

FY0

7

FY0

8

FY0

9

FY1

0

FY1

1

FY1

2

FY1

3F

FY1

4F

FY1

5F

%

Source: Company, DBS Vickers

YTD share price performance lagged industrial peers

-10%0%

10%20%30%40%50%60%70%80%90%

Jan

-12

Feb

-12

Mar

-12

Ap

r-12

May

-12

Jun

-12

Jul-

12

Au

g-1

2

Sep

-12

Oct

-12

Johnson Electric Techtronic Vtech

Source: Bloomberg

Company Focus

Johnson Electric

Background

Leading position in the motion systems market with quality customers. Johnson Electric has over 50 years of experience in producing motors and switches in global automotive and industrial products. It is now one of the major auto components suppliers for global automotive makers like BMW, Volkswagen, Mercedes Benz, GM and Ford etc. Through a series of acquisitions, the company is increasing its competitiveness and expanding its footprint into other new business areas such as Nanomotion for high-precision piezo ceramic motors and Nihon Mini Motor for camera and optical disc driver products etc.

Company Focus

Johnson Electric

Financial Summary

IPG- “Industrial Products Group” (35% of group’s revenue) - Steady 2% and 4% growth. Although we estimate smart meters and medical device products to deliver 11% growth in FY13E, the weak global economy drags down demand for other sub-segments such as traditional home appliances and consumer electronics. Offsetting the decline in both sub-segments, we estimate a 2% and 4% overall growth to US$772m and US$800m for the entire IPG business in FY13E and FY14E

APG -“Auto Products Group” (60% of group’s revenue) – Sales growth of 8% driven by strong Cooling Fan Module. We estimate that the APG segment will record 8% and 7% growth to US$1,373m and US$1,471m in FY13E and FY14, respectively. We estimate that the proportion of sales from Cooling Fan Module will further increase from 20% in FY12 to 22% and 23% in FY13E and FY14E, respectively. This represents a contribution of over 36% and 38% to total APG sales in FY13E and FY14E, respectively.

Gross margin - Improvement from efficiency gain and lower material prices. We believe 1) lower material costs 2) operating

efficiency and 3) technology advancement can improve Johnson’s GP margins. The higher skew in product mix to higher margin Cooling Fan Module products can also improve overall GP margins. Overall we estimate GP margins to improve 0.1ppt each year from 27.3% in FY12 to 27.4% and 27.5% in FY13E and FY14E respectively.

Net margins - Expect 8% and 6% growth in net profits for FY13E and FY14E. Taking into account improving operating maintenance and tighter cost controls, Opex/sales ratio is expected to reduce from 18% in FY12 to 17% in FY13E. As a result we expect net profit margins to improve from 8.7% in FY12 to 9% in FY13E. Overall we expect a 8% and 6% growth in net profits to US$202m and US$215m for FY13E and FY14E respectively.

Financial position – Solid financial position and return profile. Johnson has a net cash position of US$195m in FY12. Despite the slowdown in the global economy, the company has maintained an average free operating cashflow of US$290m representing a FCF yield of 9.7% in FY12. Moreover it has also registered a ROE of 15% in FY12 and we expect an average ROE of 13% for FY12-FY14E.

Financials summary Revenue growth (%) FY10 FY11 FY12 FY13E FY14E FY15E

Automotive Products Group ("APG") 3% 23% 11% 8% 7% 7%

Industry Products Group ("IPG") -12% 38% -5% 2% 4% 6%

Other businesses -15% -65% 17% 10% 12% 12%Total -5% 21% 2% 5% 6% 7%

Net profit growth (%) 2871% 136% 3% 8% 7% 7%

Margins

Gross Profit margin 27.7% 27.5% 27.3% 27.4% 27.5% 27.5%

EBIT margin 6.3% 11.2% 10.3% 10.6% 10.6% 10.5%

Net margin 4.4% 8.6% 8.7% 9.0% 9.1% 9.1%

Dividend yield 1.0% 1.8% 2.0% 2.1% 2.3% 2.5%

FCF Yield 10.3% 9.2% 9.8% 7.6% 8.6% 9.1%

ROAE (%) 7.4% 14.6% 13.2% 13.2% 12.8% 12.4%


Company Focus

Johnson Electric

SWOT Analysis

Strengths Weakness

• Leader in the motion systems industry for automotive and industrial products.

• Portfolio of well-known customers

• Worldwide innovation centres focus in different sectors to create differentiation in products.

• Global manufacturing bases helps sourcing for multinational customers

• Export-oriented business affected by the health of the global economy

• Strongly related to the global auto market as APG applications account for 60% of sales

• Higher copper and steel prices means higher raw material costs

Opportunities Threats

• Gain market share in the emerging auto markets (e.g. China and India)

• Fast growing environmental-friendly vehicle increases demand in high quality Cooling Fan Modules.

• Increase demand in smart devices help IPG growth

• Global restructuring reduces costs

• Slowdown in global auto production

• Economic slowdown lowers industrial product demand

• Global operations increases FX risks

Source: DBS Vickers

Company Focus

Johnson Electric

Company profile

Company Background

Corporate History. Found by the late Wang Seng Liang and Wang Koo Yik Chun in 1959, Johnson Electric began to produce micro motors in Hong Kong. In 1972, Patrick Wang (son of the late Wang) established its AC Motor business and began production of micro-motors for the automotive industry in the USA in 1976. The company had established its first production plant in Shajing, Shenzhen in1982 and got listed on the HKEX in 1984.

After its listing, the company continued to expand its business including establishing its Japanese branch office in 1988 and opening its engineering centre in Germany in 1992.

In the 2000s, Johnson began to expand its footprint through a series of M&A activities. In 1999, the company acquired Electric Motor System from Lear Corporation including Gate SpA in Italy, the motors business of Kautex Textron division, and the seat motor business of ArvinMeritor’s Light Vehicle systems division in 2001. It also acquired a 51% stake in Nanomotion for high precision piezo ceramic motors and Nihon Mini Motor for camera and optical disc driver products in 2004. Its latest acquisitions are Saia-Burgess AG and Parlex in 2005.

Johnson’s timeline

1959 1972 1976 1982 1984 1988 1992 2001 20102003 2007

Founded by the late Mr. Wang Seng Liang and Mrs. Wang Koo Yik Chun to produce micro motors.

- Established Johnson Electric in USA.- Began production of micro-motors for the automotive industry.

Listed on Hong Kong Stock Exchange.

Opened Engineering center in Germany.

Opened brushless DC motor technical and production center in Italy.

- Opened automotive motor production plants in Chennai, India.- Opened motor production plant in Beihai, Guangxi, China.

Dr. Patrick Wang established AC Motor Business.

Established plant in Shajing, Shenzhen, China.

Established Johnson Electric branch office in Japan.

Automotive and Industry divisions established.

Established the Johnson Medtech division in Hong Kong.

Source: Company

Organisation Structure. Johnson Electric is one of the world’s largest providers of motors, solenoids, micro-switches, flexible printed circuits and control systems. Its business is classified into two major segments: 1) Automotive products group (APG) 2) Industry products group (IPG). The two segments account for 60% and 35% of the group’s total revenue. Other businesses

include Johnson Medtech (JMT), Components Services (C&S) and Saia-Burgess Controls, a provider of programmable control systems and the sales of control units which accounted for 5% of total sales. The company has an annual production capacity of over one billion units.

Company Focus

Johnson Electric

Corporate structure

Automotive Products Group

Johnson Electric Group

Johnson Medtech Other Business

Industry Products Group Components & Services

Source: Company

Directors and Management Composition. Johnson’s senior management team and board of directors consist of a group of experienced and professional members.

Honorary Chairman and Non-executive Director: Madam Yik-Chun Koo Wang, age 95, is the honorary chairman of the company and is the co-founder of Johnson Electric. She was the vice-chairman of the group in 1984 and was actively involved in the development of the group in the early stages.

Chairman and Chief Executive- Patrick Wang is the son of the late Wang Seng Liang. He joined the group in 1972, was appointed managing director in 1984 and was elected as Chairman and CEO in 1996. He is a member of the nomination and corporate governance committee. Wang obtained his BSc and MSc degrees in Electrical Engineering and has an Honorary Doctorate of Engineering from Purdue University in Indiana, USA.

Vice-Chairman: Winnie Wang is the sister of Patrick Wang. She joined the group in 1969 and was appointed executive director in 1984 and was elected as vice-chairman in 1996. She is a member of the remuneration committee.

Executive Director: Austin Jesse Wang is the son of Patrick Wang. He joined the group in 2006 and became a director in 2009. He is the general manager of Saia-Burgess Controls Greater China and prior to that was senior manager of operations at Saia-Burgess China Industry Products Group and

technical product manager of Saia-Burgess Controls AG. He has previously worked as a consulting engineer in the computer industry. Wang graduated from Massachusetts Institute of Technology with an M.Eng and B.S degrees in Computer Science and Electrical Engineering.

Senior Vice President, Strategic Manufacturing: Tung Shing Choi joined Johnson Electric in 1968 and has over 40 years of experience in motor component manufacturing, motor assembly processes and the utilisation of machines and fixtures. He is responsible for the global manufacturing management of the group.

Senior Vice President, Strategic Marketing & Sales: James Randolph Dick has over 35 years of experience in high technology management. He joined Johnson in 1999, and was responsible for marketing and selling, prior to joining the group he held executive positions with Xerox in USA, IBM in Europe and Astec Plc in Hong Kong.

Senior Vice President, Supply Chain Services: Robert Allen Gillette joined the Group in 2007 and is responsible for providing leadership strategic direction in supply chain management for all business units. Prior to joining the group, he worked for Emerson Electric where he held various operations, marketing and supply chain positions in North America and Asia.

Company Focus

Johnson Electric

Senior Vice President, IPG- Europe and the Americas: Joseph Alan Guisinger joined in 2004 and is responsible for the strategic, commercial and operational direction of the Industry Products Group (IPG) in Europe and Americas. Prior to joining the group, he held senior positions in Emerson Electric.

Executive Vice President: Christopher John Hasson joined the group in 2002 and is responsible for corporate business development, mergers and acquisitions, corporate strategic planning and supervision of the legal and company secretarial functions. Prior to joining the group, he was a partner at the Boston Consulting Group.

Senior Vice President, APG Asia: Kam Chin Ko joined the group in 1988 and is responsible for the strategic, commercial and operational direction of the Automotive Products Group (APG) in Asia.

Senior Vice President, IPG- Asia: Yiu Cheung Kwong joined the Group in 1999 and is responsible for the strategic, commercial and operational direction of the Industry Products Group (IPG) in Asia. Prior to joining the group, he had 10 years experience with TDK, NHK and Philips where he held positions in product engineering, product procurement and sales and marketing.

Senior Vice President, Human Resources: Peter Henry Langdon joined the Group in 2007 and is responsible for Human Resources, Global Environmental, Health and Safety, and Training and Development. Prior to joining Johnson, he was responsible for Human Resources and was the assistant corporate secretary for a major international energy service company.

Senior Vice President, Corporate Engineering: Yue Li is responsible for overall corporate technology engineering operations and Value Innovation Programs. Prior to joining the group in 2004, he worked for Emerson Electric in St. Louis as director of new products, and for Carrier Corporation in Syracuse as director of power electronics and motor technologies and for Emergency One Inc in Florida as vice president of product management.

Senior Vice President and Chief Financial Officer: Jeffrey L. Obermayer joined the group in 2010 and had 28 years experience with BorgWarner Inc in USA and Germany, where he held senior executive positions in finance, business development, treasury and risk management and accounting.

Company Focus

Johnson Electric

Competitive Strengths

A leading provider of motion systems to supply global automakers. Johnson Electric has over 50 years of experience in producing motors and switches in global automotive products and industrial products. It is now of the major auto components suppliers to global automotive makers including, BMW, Volkswagen, Mercedes Benz, GM and Ford etc.

A comprehensive application of automotive and industrial products. Johnson offers a wide combination of product knowledge, technology and designs in various applications. Its Industry Product Group (IPS) application ranges from power tools, camera, home appliances, medical devices to smart

metre devices etc. The Auto Product Group’s (APG) business includes power train cooling, lighting, steering, HVAC, window lift, suspension and transmission etc.

A strong R&D engineering team. Johnson has innovation centres throughout the world situated in key industrial locations, which facilitates close collaboration with key customers. Each design team focuses on specialised areas to ensure efficient and on-time completion of customer design projects. Moreover, all machinery and a majority of the tools are designed and built in-house to fit Johnson’s unique production engineering process.

Johnson's innovation centres Country

USA Methuen Vandalia Springfield Plymouth

Competencies Flexible PCB Solenoid , Actuators Motor technology , Actuators

Motor technology, Cooling fan module

Germany Halver Dresden Oldenburg

Competencies Switches Motor technology, Actuators, Gear

Switches

Switzerland Murten

Competencies Actuators, Controls

Italy Asti

Competencies Motor technology, Cooling Fan Module

UK Isle of Wight

Competencies Flexible PCB

Israel Yokneam

Competencies Piezo motors

China Hong Kong Shenzhen Shanghai

Competencies Motor technology, Medical device subsystems

Motor technology, Electronics, Gear, Medical device subsystems

Cooling fan module, Flexible PCB

Japan Tokyo

Competencies Micro Motors

Location(s)

Source: Company

Company Focus

Johnson Electric

Johnson’s production facilities

Source: Company

All tools are designed in-house to meet its high standard. In order to meet high standard. Johnson Electric Production System (JEPS) is designed to maximise the efficiency and quality of the manufacturing of each customer's product. Components & Services Division designs and manufactures a wide range of precision components that provide the foundation technologies within the products. The company develops custom magnets, bearings, shafts, metal and plastic housings, laminations, commutators, and die cast parts. These capabilities allow a precise alignment between top level product design requirements (QFD) and component performance specifications.

Proven ability to grow via M&A strategy. Since 1999, Johnson Electric entered into a series of acquisitions to increase its competitiveness and to expand its footprint into other new business areas. The company acquired Electric Motor System from Lear Corporation, including Gate SpA in Italy, the motors business of Kautex Textron division, and the seat motor business of ArvinMeritor’s Light Vehicle systems division in 2001. It also acquired a 51% stake in Nanomotion for high precision piezo ceramic motors and Nihon Mini Motor for camera and optical disc driver products in 2004. Its latest acquisitions were Saia-Burgess AG and Parlex in 2005.

The series of M&A activities allows the company to emerge from a low-end micro motors manufacturer to a global high value-added professional automotive and industrial components provider.

M&A timeline

1999 2001 2004 2005

Acquisition of Electric Motor Systems from Lear Corporation including Gate SpA in Italy.

Acquired motors business of Kautex Textron division.Acquired seat motor business of ArvinMeritor's Light Vehicle Systems division.

Acquired 51% stake in Nanomotion Ltd. for high precision piezo ceramic motors.Acquired Nihon Mini Motor for camera and optical disc drive products.

Acquired Saia-Burgess AG, a Swiss manufacturer of stepper motors, switches, actuators, and control systems.Acquired Parlex, a USA manufacturer of flexible printed circuits and connector solutions.

Source: Company

Company Focus

Johnson Electric

Johnson’s Brands

Brand Area of focus

Motion (Motors and Solenoids)

Johnson motor Industrial and automotive markets focuses in DC micromotors and small AC motors

Saia-Burgess Automotive markets for custom engineered actuators and switches

Saia Motor Precision stepper and synchronous motors used within custom designed valves and motion control systems

NanoMotion Piezo motors and provide precision motion within microscopy, defense, semiconductor and medical systems

Ledex Solenoid DC solenoids

Dormeyer Solenoid AC solenoids used in high volume, home technology products. Johnson Medtech Integrated provider of custom engineering and manufacturing of Medication Delivery Subsystems, Surgical

Motion-Subsystems, Medical Grade Pumps and Custom Medical Actuators.

GATE Cooling Fan Modules for automotive engine cooling.

Switches and Relays

Saia Switches Precision microswitches

Burgess Microswitches

Baer Home technologies switches

TH-Contact Custom control panel builders

Flex Circuits and Microelectronics

Parlex Custom engineered flexible interconnects and sensors.

Source: Company, DBSV

Company Focus

Johnson Electric

Business analysis - Automotive Product Group (APG)

• Accounted for 60% of the group’s total revenue

• Cooling Fan Module (CFM) to grow at 18% and 13% in FY13E and FY14E, respectively, driven by eco-friendly vehicle sales.

• Comprehensive products in different applications and serving well-known quality customers

• Promising outlook of the Cooling Fan Module business leverages on the strong potential in the environmental-friendly vehicles market

Johnson Electric is a global leader in the automotive components industry. The APG business unit provides custom motors, actuators, switches and motion sub-system solutions for all critical automotive motion-related functions.

The APG product line comprises the following brands: Saia-Burgess for custom actuators and switches; GATE for engine cooling fan modules; and Johnson Motor for DC motors (Standard DC, Compact DC and brushless DC product lines)

APG Applications

Model vehicles nowadays require a large number of motion devices for different applications. According to the company, a standard European/US compact car requires 40 motors, a mid-size car: 60 motors and a luxury sedan demand up to 80 or more motors per vehicle.

Johnson’s APG application serves 13 different parts of an automotive, from engine management, power cooling, power steering to door locks etc.

APG APPLICATIONS

Source: Company

The uses of the APG motion/motor devices are primarily required in three major ways 1) Safety 2) Energy efficiency and 3) Comfort. We believe safety and fuel energy are the key concerns in modern vehicles and has accordingly become especially important in high-end luxury cars.

Safety: Johnson Electric’s ABS motor product line provides leading power density technology for automotive and motorcycle applications. It is the industry leader in electric parking brake motors and custom engineered motor actuators.

Company Focus

Johnson Electric

Apart from braking systems, Johnson’s products also help enhance passenger safety in seating applications including seat belt tensioner, child locks and safety windows sensors etc.

Energy efficiency: In terms of fuel efficiency, Johnson develops the leading technology platform to enhance fuel efficiency, drivability and safety. Engine management products include fuel pumps, electronic throttle controls (ETC) and exhaust gas recirculation (EGR) etc.

Moreover, the company also produces transmission applications including Automated Manual Transmission (AMT) and Dual Clutch Transmission (DCT) to help improve fuel efficiency.

Comfort: Johnson develops custom HVAC (Heating, Ventilation and Air Conditioning) actuators to create the industry standard for compact and low noise designs for global automakers.

Other areas such as power steering, door locks, mirrors, window lift and seating also require a large number of motion devices to help improve drivers’ comfort, safety and engine efficiency.

Johnson’s APG division covers 13 different auto components with a product portfolio of over 40 different categories. Our analysis categorises the APG business into two sub-segments. 1) Cooling fan module (CFM) 2) General auto components.

Sub-segment: Cooling Fan Module. Johnson Electric is one of the global leaders in CFM, with its Gate brand. Johnson works with advanced engineering departments at OEMs to create custom designs. The Gate brand includes a broad power range of DC and BLDC motors, as well as actuators for cooling valves and grill shutters for fuel efficiency enhancement. The CFM business accounted for c.20% of the group’s total revenue in FY12.

What is an Engine Cooling Fan module? An Engine Cooling Fan is also known as a radiator used for cooling internal combustion engines. It is used in automotives, motorcycles aircraft, railway locomotives etc.

Johnson’s CFM primarily addresses the passenger car segments. Its advanced technology is designed to minimise weight, space and noise. Its latest EC (brushless) motor improves fuel efficiency and CO2 emissions by engine temperature management.

APG – Cooling Fan Module

Source: Company

Market outlook- Cooling Fan Module

Outperform global auto market. The CFM unit is one the fastest growing businesses in the group. This sub-segment has recorded 34% and 17% y-o-y growth in FY11 and FY12, accounting for 17% and 20% of the group’s total revenues. The global auto production recorded only 3% y-o-y growth in 2011. As a result, Johnson’s cooling fan business has significantly outperformed the global automotive market by gaining market share.

Continuous market share gain. Assuming an ASP of US$100 for each cooling fan module, we estimated an annual sale of 4.2m units of CFM in FY12. According to OICA data, global auto production was 77.7m and 81m units in 2010 and 2011. Therefore we estimate Johnson’s market share to be 4.6% and 5.2% for the cooling fan market in FY11 and FY12.

Johnson’s CFM Market share estimates

0%

2%

4%

6%

8%

FY10 FY11 FY12 FY13F FY14F FY15F

Source: DBS Vickers

Company Focus

Johnson Electric

Assumption table

FY Mar (US$m) FY10 FY11 FY12 FY13F FY14F FY15F

sub-segment breakdownCooling fan 266.8 357.68 420.0 495.1 557.8 624.7Estimated ASP US$ 100 100 100.0 100.0 100.0 100.0Estimated unit sold (m) 2.668 3.577 4.200 4.951 5.578 6.247Total auto production (m) 61.8 77.7 80.1 82.5 85.8 89.2growth (%) -12.4% 25.8% 3.1% 3.0% 4.0% 4.0%market share 4.3% 4.6% 5.2% 6.0% 6.5% 7.0%sub-segment growth % (assumption) -22% 34% 17% 17.86% 12.67% 12.00%Group's total revenue 1,741.0 2,104.0 2,140.8 2248.0 2386.8 2555.2% of sales 15% 17% 20% 22% 23% 24%

Source: Company, DBS Vickers Global fuel consumption target

Source: International Council on Clean Transportation

Large growth potential from eco-friendly vehicles. In a world of soaring oil prices and an increase in environmental concerns, there is a clear trend of automakers developing eco-friendly vehicles such as hybrid and electric vehicles to replace traditional gasoline cars, to reduce CO2 emission. Over the past few years, global sales of hybrids and electric cars have grown rapidly from 480k units in 2008 to 995k units in 2011, according to Pike Research. It is also expected that global sales of eco-friendly vehicles will grow at a CAGR of 18% to 2.87m in 2011-2017.

Global regulations

Country/Region

European Union

United States

Japan

China

Canada

Australia

South Korea

12 % reduction, MY2008-2015 EU NEDC cycle

20% reduction, MY 2011-2016 U.S. FTP

10% reduction, MY 2004-2010 EU NEDC

13% reduction, MY 2012-2015 U.S. FTP

Fuel consumption (L/100km)

GHG emissions (CO2e/mi)

Fuel consumption (L/100km)

Fuel economy (km/L)

20% reduction, MY 2011-2016 U.S. FTP GHG emissions (CO2e/mi)

Fuel economy (mi/gal)

Fuel economy (km/L)

19% reduction, MY 2010-2015 Japan JC08

Regulated metric Program details, reduction in CO2-per-distance emissions

CO2 emissions (CO2/km)

40% reduction, MY 2008-2020 EU NEDC

Source: ICCT

Company Focus

Johnson Electric

Global oil price

0

20

40

60

80

100

120

140

160

May

-83

May

-86

May

-89

May

-92

May

-95

May

-98

May

-01

May

-04

May

-07

May

-10

US$/barrel

Source: Bloomberg

Johnson’s capability in CFM EV. In hybrid vehicles, the electric powertrain emits very little waste heat. Consequently, the heat flows in the coolant will have to be better controlled by thermal management. As one of the few names in the world which has the capability to produce CFM for hybrid and EV, Johnson Electric introduced a new cooling fan product line exclusively for hybrids and EVs. The CFM EV is designed to have an extremely long life to continuously manage the battery temperature during the operating and recharge cycles of plug-in hybrids and electric vehicles. The CFM EV was launched under the GATE brand and is designed to maximise airflow with its compact size, low weight and quiet operation.

Further increase its market share in CFM market; revenue expected to grow at 18% and 13% in FY13E and FY14E. We believe that technology advancement in CFM EV will allow Johnson to further increase its market position in the global CFM business. Although the global auto market is only forecasted to grow at 3% in FY13E, we estimate an 18% growth in the CFM segment revenue. We estimate Johnson’s CFM market share to grow from 5.2% in FY12 and to 6% in FY13E, primarily driven by the hybrid and electric vehicle market. As a result, we expect the CFM business to grow at 18% and 13% to US$495m and US$557m in FY13E and FY14E respectively.

Case study: Power Steering

Looking back into the history you can see that Johnson’s revenue grew rapidly by 14 times over the past two decades. We believe one of the major reasons for this success was the development of Electronic Power Steering (EPS) which has created a huge demand in brush DC motors since 1990s.

The “EPS” technology was first introduced in the 1950s. In the early days, this technology was designed for heavy vehicles to provide leverage to steer their wheels. During the 1960s and 1970s, power steering was only an option for premium vehicles such as the Cadillac and Lincoln etc. The power steering technology did not become popular until the late 1980s and early 1990s. That changed when Honda introduced the first “all electric” power-steering system on its Acura NSX sports car in 1993. The new system, which requires a brush DC motor dominated the market and brought a revolution to the global auto industry. Since then, the EPS system has become a necessity in both passenger and commercial vehicles. This new revolutionary technology created massive business opportunities for auto components makers, especially motor manufacturers.

Johnson electric is one of the beneficiaries from this technological migration process. As a result, although automotive production grew with only a CAGR of 1.28%, Johnson Electric’s revenue grew by 18% CAGR within 10 years from the introduction of EPS. Ignoring the revenue doubling between 1999 and 2000, Johnson Electric still obtained a 12% CAGR between 1990 and 1999, substantially outperforming the auto market. With this, we believe the development of EPS was a major driver and opportunity for Johnson Electric’s revenues and we are trying to look for a new growth driver for Johnson Electric’s future.

Johnson’s sales growth vs global auto

-20%

0%

20%

40%

60%

80%

1985 1990 1995 2000 2005 2010 2015

Global Auto Production Growth

Johnson Rev Growth

CAGR= 18.4%

Source: Company, OICA

Déjà vu: Will eco-friendly Hybrid/Electric vehicles be the future of the market?

We have noticed that there is a growing trend of leading automotive manufacturers starting to push out hybrid models. Although the first batch of modern hybrid cars were produced in 1970’s after the first oil crisis, it did not become widely available until the release of the Toyota Prius in 1997. We have

Company Focus

Johnson Electric

seen global sales of hybrid and EV grow from around 520,000 in 2008 to around 930,000 in 2011. According to Pike Research, global sales will triple that of 2011 by 2017 with a CAGR 18% between 2011-2015. Johnson should be able to capitalise on this as they are one of the few suppliers of motors used in hybrid and electric vehicles.

Global hybrid sales

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2008

2009

2010

2011

2012

F

2013

F

2014

F

2015

F

2016

F

2017

FSales Vol

Source: OICA

Sub-segment: General auto components. Johnson did not have the revenue breakdown for different auto component units. Other components applies to any motion devices in an automotive apart from the Cooling Fan Module, (e.g. Heating, Ventilation & Air Conditioning or HVAC, braking, suspensions, power steering and interior components etc)

The general auto components accounts for 67% of APG revenue and 40% of the group’s total revenue. The product portfolio of this sub-segment covers over 13 different parts of a vehicle, including at least 40 different types of product categories.

Global auto output expected to rise at only 3%. Apart from the CFM business unit, Johnson’s APG business is closely correlated to the global auto industry activity. Due to the Global Financial crisis, Global auto output had fallen dramatically to 47.8 units in 2009. However, since then, the market has regained its steady growth rate and returned back to the 59.9m units production level in 2011. According to OICA, The overall market is expecting 3% and 4% growth in 2012 and 2013, respectively.

Global auto production

0

10

20

30

40

50

60

70

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

E

2013

E

mn

Source: OICA, DBS Vickers

Johnson’s general auto components sales in line with the global auto market growth at a CAGR of 3%. Due to its diversified nature and complicated product portfolio, we estimate that the sub-segment sales will grow in line with the global auto output at 3% and 4% in FY13E and FY14E, respectively.

APG sales to grow at 8%, driven by the strong Cooling Fan Module. We estimate the overall APG segment to record an 8% and 7% growth to US$1,373m and US$1,471m in FY13E and FY14, respectively. We estimate that revenue from the Cooling Fan Module to further grow by 18% in FY13E and 13% in FY14E respectively. This represents a contribution of over 36% and 38% to total APG sales in FY13E and FY14E, respectively.

Company Focus

Johnson Electric

APG sales

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800


Cooling fan Other auto motors

US$m


Industry outlook

The global automotive product suppliers market has been affected by the recent economic slowdown. In particular, smaller companies struggled to survive during the crisis, according to the Motor and Equipment Manufacturers Association (MEMA). There were over 50 bankruptcies and about 200 liquidations in 2009 in the automotive supplier sector. However we have seen recovery in global auto production. Based on OICA, global production was 80 million, which is a continuation of the growth trend before 2008, after seeing global production figures dropping in 2008 and 2009. According to Polk Research, the auto market is expected to grow at a CAGR of 5.5% for 2012-2015.

Competitive landscape

Johnson supplies most of their automotive products to other companies, such as Delphi, Denso, etc, as a second tier supplier for first tier automotive manufacturers such as BMW, Daimler, etc.

Johnson not only faces competition from other automotive parts manufacturer like Bosch but also from their clients who try to produce those parts themselves. On the whole, with the global auto market recovering, we see that Johnson will outperform the industry leveraging due to their footprint in the Hybrid/EV market.

Company Focus

Johnson Electric

Johnson’s clients/competitors

Company origin

Market cap

US$ m

Stock code

Group revenue(US$ m)

EBIT margin

- %

Gross Profit

margin- %

Specialised area Competition with

others?

Major client

Johnson Electric

Hong Kong 2,211.2 179 HK 2,140.8 10.3% 27.3% Motion and Motors, Cooling Fan, Switches and Relay, Flex Circuits and Microelectronics

BMW, GM, Ford, Daimler, Volkswagen

America Axle

US 729.9 AXL:US 2,585.0 8.6% 17.6% Axles and Driveshafts, Drivetrain components, forged products

and other

Magna GM (73%). Chrysler/Fiat, Volkswagen,

Audi/Scania, Nissan, Daimler Truck/Mercedes, Tata Motors/Jaguar Land

RoverBehr Germany 0.0 not listed 5,160.3 4.7% na Automotive Air Conditioning

and Engine Cooling SystemsPorsche, Daimler, Audi,

BMW, KAMAZ, Hyundai/Kia, PSA Peugeot Citroen

Delphi US 7,070.4 DLPH:US 16,041.0 10.4% 16.6% Electrical/ Electronic Architecture, Electronics &

Safety, Powertrain Systems, Thermal Systems

Valeo, Denso, Lear,

Magneti Marelli, TRW

BMW, Caterpillar, Chrysler, Daimler, Fiat,

Ford, Geely, GM, Hyundai/Kia, PSA Peugeot Citroen,

Renault/Nissan, Shanghai GM, Toyota, Volvo

Trucks, Volkswagen Group

Denso Japan 26,967.4 6902:JT 39,981.0 5.1% 13.8% Auto Components (Aftermarket) - spark plug, NaviBridge, Auto

Componenets (OEM) - Air Conditioning System, Engine

Related Components, Body Equipment, Driving Control and

Safety Products, Regulation & Legislation

Delphi, Valeo

Toyota Group, OE Sales for others (Honda, GM, Suzuki), After-market, New business & Others

Lear US 4,278.0 LEA:US 14,156.5 4.8% 8.4% Seating System, Electrical Power Management Systems

Magna GM, BMW, Ford, VW/Audi, Fiat/Chrysler

Magna Canada 7,803.3 MGA:US 28,748.0 4.3% 9.3% Exterior and Interior Systems, Body Systems and Chassis

Systems, Powertrain Systems, Complete Vehicle Assembly,

Vision and Electronic Systems, Tooling, Enginerring and other,

Closure Sytems

Lear GM, BMW, Fiat/Chrysler Group, Ford Motor

Company, Volkswagen, Daimler AG

Magneti Marelli

Italy 0.0 GIL:IM (delisted)

€5.9 billion

na na Electronic Systems, Automotive Lighting, Powertrain, Suspenion

Systems, Exhaust Systems, Motorsport, Plastic Components and Modules, After Market parts

amd Services

all main car manufacturers in Europe

and America, Chery, Suzuki-Maruti, Tata, Piaggio, Ducati and

Harley DavidsonTRW US 4,034.3 TRW:US 16,244.0 7.9% 11.5% Chassis Systems, Occupant

Safety Systems, Electronics, Automotive Components

Delphi, Valeo

Volswagen, Ford, GM

Valeo France 2,986.1 FR:FP 15,132.7 6.5% 17.0% Powertrain Systems, Thermal Systems, Comfort and Driving

Assistance Systems, and Visibility Systems

Delphi, Denso, TRW

Three major global automakers represent

43.3% of the Valeo Group's sales

Valeo's largest customer accounted for 19% of

the Group's accounts and notes receivable

Source: Companies, DBS Vickers

Company Focus

Johnson Electric

Business analysis –

Industrial Product Group (IPG) & other businesses

• Accounted for 40% of the group’s total revenue (IPG: 34.6%, Others: 4.6%)

• Steady growth of 3% and 5% ahead in FY13E and FY14E, respectively.

• One of the world’s leading motors suppliers for major industrial products

• Increase awareness of energy savings and efficiency creates huge demand for Smart meters

The Industry Product Group (IPG) provides motion products and customised solutions for various commercial and industrial applications, including home appliances, power tools, business equipments, personal care products, building automation, security, audio-visual and other industrial products.

Similar to the APG segment, Johnson’s product line comprises different brands: Johnson Motor for DC motors (Standard DC, Compact DC, and brushless DC product lines), and AC motors; Saia Motor for stepper motors and synchronous motors; Ledex and Dormeyer for solenoids; and Saia, Bär, Burgess, the-contact for switches.

IPG applications

Source: Company

Company Focus

Johnson Electric

Comprehensive product portfolio covers almost every industrial sector.

Johnson’s IPG has a broad range of products covering a large number of sectors. In order to simplify the product mix, we have classified Johnson’s IPG into four major sub-segments. 1) Industrial equipment 2) Home appliances 3) Consumer electronics and 4) Advanced technologies.

IPG Breakdown

Home Appliances

27%

Industrial equipment

19%

Advanced technologies

26%

Consumer electronics

28%


IPG sales trend

0

200

400

600

800

1000

FY10 FY11 FY12 FY13F FY14F FY15FIndustrial equipment Home Appliances

Consumer electronics Advanced technologies

US$m


Sub-segment breakdown FY Mar (US$m) 2010 2011 2012 2013F 2014F 2015F

Industrial equipment 111.0 152.6 140.4 147.4 156.3 167.2

growth assumption -9% 38% -8% 5% 6% 7%

Home Appliances 160.0 220.0 204.6 198.5 198.5 204.4

growth assumption -11% 38% -7% -3% 0% 3%

Consumer electronics 163.9 225.3 210.6 206.4 206.4 216.7

growth assumption -7% 38% -7% -2% 0% 5%

Advanced technologies 144.1 198.2 198.1 219.9 239.7 263.7

growth assumption -18% 38% 0% 11% 9% 10%

Total 579.0 796.2 753.7 772.2 800.8 852.0


Industrial equipment driven by global construction and housing activities. This sub-segment includes products such as lift trucks, gardening tools, construction equipments and power tools etc. For power tool and construction products, Techtronic (669.HK) is one of Johnson’s major customers. We estimate that 18% of IPG’s revenue comes from this sub-segment.

We believe the industrial equipment sub-segment is mainly driven by the state of the global economy. According to the “World Power Tools Industry” market report by marketresearch.com, global demand for power tools is forecasted to exceed US$28bn in 2013 at a CAGR of 4%. The recovery in the US housing market and the ongoing investment

Company Focus

Johnson Electric

in infrastructure and construction in emerging markets are the major drivers for the growth of the power tools market. We estimate a 5% and 6% growth in revenues for this sub-segment in FY13E and FY14E, respectively.

Johnson’s Industrial sub-segment growth vs Techtronic sales growth

-20%

-10%

0%

10%

20%

30%

40%

50%

FY07

FY08

FY09

FY10

FY11

FY12

F

FY13

F

FY14

F

Johnson's industrial production growth*Techtronic's sales growth

* FY07: FY3/08 – FY14: FY3/15F

Source: Companies, DBS Vickers

Slowdown in Home Appliances. The industries served under this sub-segment includes washing machines, refrigerators, dishwashers and floorcare products etc. We estimate the home appliance sub-segment contributes 27% to total IPG sales.

According to Euromonitor, the Top 5 major home appliances brands accounts for 20% of the global market. They are Haier, Whirlpool, LG, Panasonic and G.E. Due to the slowdown in the global economy and the increase in competition; the home appliances industry has suffered a decline in recent years. We expect emerging markets to be the growth drivers for this sub-segment. In particular, China’s rural appliance rebate program should provide support in the near term. However, we do not expect growth in lower-end products can offset the decline in the developed market. As a result, for Johnson’s home appliances sub-segment we estimate a 3% decline in FY13E and we expect sales to stay flat in FY14E.

China’s home appliances

RMB bn

192237

271315

536

40523%

16%

32%

29%

14%

0

100

200

300

400

500

600

2006 2007 2008 2009 2010 20110%

5%

10%

15%

20%

25%

30%

35%

Sales of home appliances (LHS)

Growth y-o-y (RHS)

Source: DBSV

The Top 5 Major Home Appliance Brands in the World

Brand Company HeadquartersMarket share *

Haier Haier Group Qingdao, China 5.10%

Whirlpool Whirlpool Corp Michigan, USA 4.50%

LG LG Group Seoul, South Korea 4.30%

Panasonic Panasonic Corp. Osaka, Japan 3.10%

G.E. General Electrics Co. Fairfield, Connecticut, USA 3.00%

* 2009 market share data

Source: Euromonitor

Consumer electronics demand yet to recover. This sub-segment includes cameras, office automation, electronic toys, vending machines, ATM and gaming machines etc. We believe that consumer electronics is the largest sub-segment, accounting for 28% of IPG’s revenue.

According to the CCID report, total global consumer electronic product output reached 2.1b pieces in 2010, a 12.6% y-o-y growth from 2009. This growth was mainly driven by an increase in demand for finance machines and vending machines, as a result of increases in automation to cut labour costs. In particular, global finance machine sales grew 9% to US$2.2b in 2010. However, global office automation equipment sales shrank at an average of 4.5% in 2009 and 2010 due to the slowdown in the economy. Due to higher exposure in the automation segment, the slowdown in such products will drag down overall growth. Hence, we estimate a mild 2% drop in FY13E.

Company Focus

Johnson Electric

Consumer electronics

0

100

200

300

400

500

600

700

2007 2008 2009 2010 2011

US$bn

Source: CCID

Advanced technologies, major growth driver. This sub-segment includes defence products, medical devices and smart meters. We estimate that 26% of the total IPG revenue came from this sub-segment.

With the general population’s increase in health awareness, food safety and health related expenses; the medical equipment market has achieved continuous growth in recent years. According to the CCID report, global medical equipment sales reach US$91.7b in 2011, representing a y-o-y growth of 21.3%.

Moreover, smart electric meters have also become an important device nowadays for improving power efficiency, to reduce energy consumption and for cost savings. According to Pike Research, the smart meter penetration was below 4% in 2008. It is forecasted to reach 18% in 2012 and to exceed 55% by 2020.

Global market of medical test equipment

0

10

20

30

40

50

60

2008 2009 2010 2011

US$bn

Source: CCID

We think that both medical devices and smart meters will be the major growth driver for this sub-segment. We estimate an 11% growth for FY13E. We believe this will overtake consumer electronics to become the largest contribution in the overall IPG segment.

IPG sub-segments growth

-30%-20%

-10%0%

10%20%

30%40%

50%


Industrial equipmentHome AppliancesConsumer electronicsAdvanced technologies


Steady 2% and 4% growth for IPG business. Although we estimate smart meters and medical device product to deliver 11% growth in FY13E, the weak global economy drags down

Company Focus

Johnson Electric

demand for other sub-segments, particularly traditional home appliances and consumer electronics. Offsetting the decline in both sub-segments, we therefore estimate a 2% and 4% overall growth to US$772m and US$800m, respectively, for the entire IPG business in FY13E and FY14E.

Overall IPG revenue

0

100

200

300

400

500

600

700

800

900


US$m


Other businesses such as Control Units provide stable 10% growth annually. Johnson’s other businesses also include Johnson Medtech and Saia-burgess Controls.

Johnson Medtech provides custom engineering and motion product solutions for the medical device industry. The focus of Johnson Medtech is primarily in subsystems for Medication Delivery and Surgical Devices as well as Medical Grade Pumps and Custom Medical Actuators.

Saia-Burgess Controls produces and markets control technology for OEMs, in production machines and equipment construction, and for system integrators carrying out projects in infrastructure automation (buildings, transportation, manufacturing, water, energy and gas industries). For these customers and application areas, Saia-Burgess Controls produces over 30,000 controller CPUs each year with more than 1.5 million inputs and outputs.

Revenue from other businesses was US$93m in FY12, accounting for 4% of the group’s total revenues. These businesses are high value-added services and niche, which means they are less affected by the global economy condition. Moreover the high barrier to entry nature of the business prevents vigorous competition. Looking ahead, we expect 10%

and 11% growth in the other businesses for FY13E and FY14E, respectively, contributing c.4.6% and 4.8% of the total revenue respectively.

Other businesses revenue

0

50

100

150

200

250


US$m


Company Focus

Johnson Electric

Financial – Income Statement

• Revenue growth driven by Cooling Fan Module (CFM) at a CAGR of 15% in FY13E and FY14E.

• Margin recovery on track due to stabilised raw material prices

• Expecting more APG revenue from emerging markets.

Cooling Fan Module (CFM) business to continue the success story. We believe the technology advancement in CFM EV will allow Johnson to further increase its market position in the global CFM business. Although the global auto market is only forecasted to grow at 3% in FY13E, we estimate an 18% growth in the CFM segment revenue. We estimate Johnson’s CFM market share to grow from 5.2% in FY12 further to 6% in FY13E primarily driven by the hybrid and electric vehicle market. As a result we expect the CFM business to grow at 18% and 13% to US$495m and US$557m in FY13E and FY14E respectively.

We estimated that revenue contribution from the CFM business to increase from 19.6% in FY12 to 23.3% in FY14E.

Due to its diversified nature and complicated product portfolio, we estimate that other APG sales (excluding CFM) will grow in line with the global auto output at 3% and 4% in FY13E and FY14E. Overall we expect APG segment to grow 8% and 7% to US$1,373m and US$1,471m in FY13E and FY14, respectively.

For the IPG segment, although we estimate smart meters and medical device products to deliver an 11% growth in FY13E, the weak global economy drags down demand for other sub-segments, particularly traditional home appliances and consumer electronics. Offsetting the decline in both sub-segment, we therefore estimate a 2% and 4% overall growth to US$772m and US$800m for the entire IPG business in FY13E and FY14E.

Moreover, revenue from other businesses was US$93m in FY12, accounting for 4% of the group’s total revenue. Looking ahead, we expect a stable 10% and 11% growth in the other businesses for FY13E and FY14E, contributing c. 4.6% and 4.8% of the total revenue respectively due to its high value-added nature.

Overall, we expect Johnson to register mid single-digit revenue growth in FY13E and FY14E. We believe the relatively slow-growing IPG segment will drag down the overall growth rate.

However, in the longer term, the IPG segment should regain its growth momentum driven by advanced technology products, such as medical devices and more importantly, smart meters.

Johnson’s overall sales trend

0

500

1000

1500

2000

2500

3000


Other businessesIndustry Products Group ("IPG")Automotive Products Group ("APG")

US$m


Europe to remain the largest geographical segment but Asia-Pacific to catch up. Due to Johnson’s product quality and brand recognition, the company has a strong APG customer portfolio which includes Volkswagen, BMW, Daimler-Benz, GM and Ford etc. Despite the slowdown in the European economy, quality automakers such as BMW and Benz are registering record high-sales benefitting from the strong growth in emerging markets. Looking ahead, we still expect the European automakers to outperform their US peers in the near term. In the longer term, we expect higher revenue contribution from the Asian region with increasing demand from domestic automakers and JV manufacturers in China and India.

Company Focus

Johnson Electric

Global auto production geography, 2011

Japan12%

France3%

Spain3%

USA5%

Brazil4%

South Korea7%

India5%

Others27%

Germany10%

China24%

Source: OICA

Steel and copper account for the bulk of raw materials. The company does not have a breakdown of its cost structure in its annual report. However we estimated that raw material accounts for approximately 60% of the COGS, while direct labour accounts for 8% and overhead accounts for 25%. Among the raw materials, we estimate that 50% is steel, copper (35%), plastic (5%), transmission (5%) and other components (5%).

Cost breakdown

Others4%

Labour6%

Raw material

65%

Overhead25%


Commodity prices on a downward trend helps reduce cost pressures. Over the past decade, Johnson’s GP margin has declined gradually from 32.5% in FY03 to the lowest level of 23.3% in FY09 during the financial crisis. In recent years, the company has managed to improve its GP margins to return to the 27% level due to effective product mix change and commodity hedging.

Gross margin

20

25

30

35

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

F

FY14

F

FY15

F

%


The price of steel increased sharply from US$300 per tonne in 2009 to US$700 in 2011. However steel prices dropped rapidly in late 2011 through 1H12 due to the impact of the global economic environment. Steel prices currently trade at US$335 per tonne.

Flat sheet steel price

2,500

3,000

3,500

4,000

4,500

5,000

5,500

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

RMB/ton

Source: Custeel

Company Focus

Johnson Electric

The price of copper has also demonstrated an upward trend since 2009 and it increased substantially in 2011. The average closing price of the LME three-month copper futures increased 17% y-o-y in 2011. In 1H12, we saw a gradual decrease in copper prices.

LME copper price

0

2000

4000

6000

8000

10000

12000

Jan

-04

Jan

-05

Jan

-06

Jan

-07

Jan

-08

Jan

-09

Jan

-10

Jan

-11

Jan

-12

US$/MT

Source: Bloomberg

The recent price correction in both copper and steel prices has reduced cost pressure for Johnson. Moreover, the company has also hedged against the copper price to reduce the risk of a sharp increase in commodity prices. Looking forward, we expect a mild 0.1ppt improvement from 27.3% in FY12 to 27.4% in FY13E and 27.5% in FY14E.

Wage increase in China of minimal impact to Johnson. Rising wages in China should not have a significant impact on Johnson’s overall production cost. Currently 60% of the products are manufactured in China. We estimate that direct labour accounts for only 8% of COGS. Assuming a 10-15% rise in wages, the net impact on total COGS is less than 1%.

Rmb appreciation not a key issue. We estimate that direct labour and overheads accounts for 33% of the total COGS. However, since only 60% of the production is done in China, the actual impact is lower than expected. Our sensitivity analysis suggests that every 2% in Rmb appreciation will drag GP margins by 0.3ppt. Recently, there have been signs of a slowdown in China’s economy. DBS economists have tuned down the Rmb appreciation forecast from 3% to less than 2% by end 2012.

Sensitivity analysis

Net profit

Copper

-30% -20% -10% 0% 10% 20% 30%

6% 31.7% 30.0% 28.4% 26.7% 25.1% 23.4% 21.8%

4% 32.0% 30.3% 28.7% 27.0% 25.4% 23.7% 22.1%

2% 32.2% 30.6% 28.9% 27.3% 25.6% 24.0% 22.3%

0% 32.5% 30.8% 29.2% 27.5% 25.9% 24.3% 22.6%

-2% 32.8% 31.1% 29.5% 27.8% 26.2% 24.5% 22.9%

-4% 33.0% 31.4% 29.7% 28.1% 26.4% 24.8% 23.1%

-6% 33.3% 31.7% 30.0% 28.4% 26.7% 25.1% 23.4%RM

B a

pp

reci

atio

n

0

50

100

150

200

250

FY10 FY11 FY12 FY13F FY14F FY15F0

20

40

60

80

100

120

140

160

Net profit (LHS) YoY growth (RHS)

US$m %

Source: DBS Vickers Source: Company, DBS Vickers

Expect 8% and 6% growth in net profits for FY13E and FY14E. Taking into account improving operating maintenance and tighter cost controls, Opex/sales ratio is expected to reduce from 18% in FY12 to 17% in FY13E. As a result we

expect net profit margins to improve from 8.7% in FY12 to 9% in FY13E. Overall we expect an 8% and 6% growth in net profits to US$202m and US$215m for FY13E and FY14E respectively.

Company Focus

Johnson Electric

Financial –Balance Sheet

Healthy financials support expansion and provide business stability. The company maintains a stable current ratio of 1.6-1.8x for FY11-FY12. We expect the ratio to stay at current healthy levels. Moreover, we believe efficient product management and improved manufacturing processes can further minimise work-in-progress inventory as the transportation of production time is reduced. As a result, we expect total inventory days to improve slightly from 62 days in FY12 to 57 days in FY13E.

Strong net cash position supports higher dividend payout. Johnson maintained a dividend payout of 25%-30% during FY10-FY12. Before the financial crisis, the company used to have an even higher dividend payout ratio of above 50% during the FY04-FY08 period. Looking forward, we believe it is likely that the company might increase its dividend payout ratio if no major acquisition takes place, supported by a strong financial position of US$192m in FY12.

Payout trend

0

10

20

30

40

50

60

70

FY0

3

FY0

4

FY0

5

FY0

6

FY0

7

FY0

8

FY0

9

FY1

0

FY1

1

FY1

2

FY1

3F

FY1

4F

FY1

5F

%


Financial –Cash Flow

Capex remains at less than 5% of sales, as acquisition are unlikely to happen. The company has indicated that no M&A is likely to take place in the near future. We expect the capex level to remain at US$90m for machinery maintenance and new purchases, operating enhancements and basic working capital management.

Company Focus

Johnson Electric

Future Opportunities

Further expanding the brand portfolio through M&A in the long term. The company is looking for M&A activities if the opportunities arise in the future. Through a series of M&A activities, Johnson can expand its product coverage and develop into a high value-added auto components supplier in the value chain. Moreover, the company can look for business opportunities to venture into the energy saving businesses such as electric vehicles and other smart devices.

Key Risks

Sales dependent on macroeconomic activities. Johnson is not a pure auto market player, however the global auto sales environment also affects Johnson’s sales. Global auto sales is closely related to the macroeconomic condition, as a result, Johnson’s performance depends on external macroeconomic factors, which it cannot control.

Steel and copper account the bulk of raw materials. Both steel and copper make over 85% of total raw materials. Movements in commodity prices also rely on macroeconomic conditions and industry demand. Recent quantitative easing measures proposed by the Fed creates inflationary pressures and will likely increase asset prices. Although Johnson has hedged against commodity prices, rapid changes in prices increases business risk. During the financial crisis, Johnson’s GP margin fell rapidly to 23.3% in FY09 as compared to 27.3% in FY12.

Company Focus

Johnson Electric

Valuation

Current valuation trading at discount to global peers. Johnson Electric is a leading manufacturer of motors and switches for global automotive and industrial products. It is also a major auto components supplier to the world’s leading car makers. Leveraging on the increase in demand in environmental-friendly products, Johnson is likely to benefit from it and outperform the global industrial sector.

Johnson is currently trading at 11.7x FY13E P/E and 10.9x FY14E P/E multiples. Johnson has traded between a P/E of 8x-15x in the past 3 years. Although Johnson’s share price has rebounded from recent lows, we believe further re-rating to the high end of the range is justified due to the Company’s continually improving market position, strength in higher end auto component space, its consistently high FCF yield of 9% and potentially higher dividend payout.

Among its global peers, Mabuchi Motor (6592.JP) and Nidec (7756.JP) manufacture motion components to both automotive and home & industrial sectors. Both companies trade at an average of 14.5x FY13E P/E (Mar-end). We believe the two Japanese companies are the closest comparable to Johnson in the market.

We derived a TP of HK$6.5 based on a 14.5x FY13E P/E. This is comparable with global peers in diversified sector. Johnson has evolved from a low-end motor manufacturer to a high value-added auto parts suppliers, as well as one of the largest component suppliers for industrial products. We believe Johnson deserves a premium to ordinary auto component suppliers. Our valuation is also supported by our DCF model that assumes a 7% equity risk premium, 3% risk-free rate and 2.5% terminal growth.

Peers valuation

Mkt GP P/FCF PE PE Yield Yield P/Bk P/Bk ROE ROE

Currency Price Cap^ Fiscal Margin 11A 12F 13F 12F 13F 12F 13F 12F 13F

Company Name Code Local$ US$m Yr % x x x % % x x % %

Johnson Electric Hdg.*# 179 HK HKD 5.1 2,371 Mar-12 27.3 10.2 11.7 10.9 2.1 2.3 1.5 1.3 13.2 12.8

Diversified players

Mabuchi Motor 6592 JP JPY 3570 1,821 Dec-11 24.1 71.2 22.5 20.9 2.8 2.8 0.7 0.7 3.7 4.1

Minebea# 6479 JP JPY 271 1,384 Mar-12 21.0 11.1 9.5 8.1 2.6 2.8 0.9 0.8 9.7 9.7

Nidec Copal# 7756 JP JPY 638 514 Mar-12 19.4 69.4 9.9 8.8 3.1 3.9 0.8 0.7 8.6 n.a.

Average 50.6 14.0 12.6 2.9 3.2 0.8 0.8 7.4 6.9

APG peers Interior components

Magna Intl. MG CN CAD 44.04 10,462 Dec-11 10.0 10.6 8.6 8.1 2.5 2.7 1.2 1.0 14.4 15.2

Lear LEA US USD 41.39 4,056 Dec-11 8.4 9.0 7.9 7.8 1.3 1.4 1.4 1.2 18.1 16.5

Faurecia EO FP EUR 12.78 1,824 Dec-11 8.6 5.9 5.9 4.8 2.2 2.5 1.1 0.9 26.5 20.5

Auto Tyres Michelin ML FP EUR 61.68 14,453 Dec-11 28.5 23.2 7.3 7.0 3.8 4.0 1.2 1.1 16.2 15.6

Continental CON GR EUR 75.68 19,488 Dec-11 21.0 17.0 7.6 7.1 2.5 3.0 1.8 1.5 21.8 20.5

Average 29.8 10.4 9.5 2.6 2.9 1.1 1.0 14.1 13.6

Industrial

Electronics components

Von Roll 'B' ROL SW CHF 2.25 443 Dec-11 17.6 183.9 22.5 22.5 0.0 0.0 1.3 1.2 8.0 7.1

Ibiden# 4062 JP JPY 1065 2,055 Mar-12 22.6 n.a. 17.2 11.9 3.0 3.2 0.6 0.5 4.6 5.1

Acuity Brands AYI US USD 63.36 2,683 Aug-12 40.8 18.9 24.3 17.9 0.8 0.9 3.5 2.9 14.5 19.0

Environmental & building systems

Havell'S India# HAVL IN INR 646.85 1,522 Mar-12 n.a. 39.9 18.0 15.1 1.1 1.2 6.2 4.7 34.3 32.6

Uponor (Fra) UNR1V FH EUR 8.12 765 Dec-11 36.3 14.6 18.9 15.6 4.8 5.4 2.8 2.6 17.5 20.6

Lindab International LIAB SS SEK 47.75 572 Dec-11 27.5 12.0 15.5 11.0 2.8 4.2 1.3 1.2 11.3 13.3

Average 53.9 19.4 15.7 2.1 2.5 2.6 2.2 15.1 16.3

^ H-share market cap for H-share

# FY12: FY13; FY13: FY14

Source: Thomson Reuters, *DBS Vickers

Company Focus

Johnson Electric

Key Assumptions Sensitivity Analysis

FY Mar 2010A 2011A 2012A 2013F 2014F 2015F

GP margin % 27.7 27.5 27.3 27.4 27.5 27.5 2011

EBITDA Margin % 11.3 15.3 14.7 14.6 14.3 13.8 Copper price +/- 10%

GP margin -/+ 1.6ppt

APG growth (%) (11.5) 37.5 (5.3) 2.4 3.7 6.4 Rmb appreciation +/- 2%

Net Profit -/+ 0.3ppt

IPG growth (%) 3.2 23.1 10.7 7.9 7.1 7.0 Other business growth (%)

(15.1) (65.0) 16.5 10.0 12.0 12.0

Segmental Breakdown (US$ m)

FY Mar 2010A 2011A 2012A 2013F 2014F 2015FRevenues (US$ m) Automotive Products 934 1,150 1,273 1,373 1,471 1,575 Industry Products Group 579 796 754 772 801 852 Other businesses 228 80 93 102 115 128 Divested business 0 78 21 0 0 0

Total 1,741 2,104 2,141 2,248 2,387 2,555

Company Focus

Johnson Electric

Income Statement (US$ m) Margins Trend FY Mar 2010A 2011A 2012A 2013F 2014F 2015FRevenue 1,741 2,104 2,141 2,248 2,387 2,555Cost of Goods Sold (1,259) (1,524) (1,556) (1,633) (1,731) (1,853)Gross Profit 481 580 584 615 655 702Other Opng (Exp)/Inc (371) (344) (363) (378) (402) (433)Operating Profit 111 236 221 237 254 269Other Non Opg (Exp)/Inc 0 0 0 0 0 0Associates & JV Inc 0 0 0 0 0 0Net Interest (Exp)/Inc (7) (9) (1) 1 2 5Exceptional Gain/(Loss) 0 0 0 0 0 0Pre-tax Profit 104 226 221 239 256 274Tax (16) (36) (32) (34) (37) (39)Minority Interest (10) (9) (2) (2) (3) (3)Preference Dividend 0 0 0 0 0 0

8.0%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

11.5%

12.0%

2011A 2012A 2013F 2014F 2015F

Operating Margin % Net Income Margin %

Net Profit 77 182 187 202 217 232Net Profit before Except. 77 182 187 202 217 232EBITDA 197 322 314 329 340 352Growth Revenue Gth (%) (4.8) 20.9 1.7 5.0 6.2 7.1EBITDA Gth (%) 45.0 63.6 (2.5) 4.6 3.5 3.5Opg Profit Gth (%) 135.9 113.1 (6.2) 7.3 6.9 6.0Net Profit Gth (%) 2,870.8 136.1 2.7 8.3 7.3 6.9Margins & Ratio Gross Margins (%) 27.7 27.5 27.3 27.4 27.5 27.5Opg Profit Margin (%) 6.4 11.2 10.3 10.6 10.6 10.5Net Profit Margin (%) 4.4 8.6 8.7 9.0 9.1 9.1ROAE (%) 7.4 14.6 13.2 13.2 12.8 12.4ROA (%) 3.8 8.1 8.1 8.5 8.5 8.5ROCE (%) 5.5 11.1 10.2 10.5 10.4 10.2Div Payout Ratio (%) 30.7 23.4 24.7 25.0 25.0 25.0Net Interest Cover (x) 16.4 25.1 207.8 NM NM NMSource: Company, DBS Vickers

Company Focus

Johnson Electric

Interim Income Statement (US$ m) Margins Trend FY Mar 1H2010 2H2010 1H2011 2H2011 1H2012 2H2012

Revenue 812 929 1,031 1,073 1,118 1,023Cost of Goods Sold (596) (664) (735) (790) (814) (742)Gross Profit 216 266 296 284 304 281Other Oper. (Exp)/Inc (187) (184) (172) (172) (185) (178)Operating Profit 29 82 124 112 119 102Other Non Opg (Exp)/Inc 0 0 2 (2) 3 (3)Associates & JV Inc 0 0 0 0 0 0

Net Interest (Exp)/Inc (3) 3 (6) (4) (4) 3Exceptional Gain/(Loss) 0 0 0 0 0 0Pre-tax Profit 26 85 120 106 118 103Tax (10) (6) (22) (14) (16) (15)Minority Interest (5) (6) (5) (3) 0 (2)Net Profit 10 73 93 89 102 85

0%

2%

4%

6%

8%

10%

12%

14%

1H10

2H10

1H11

2H11

1H12

2H12

Operating Margin % Net Income Margin %

Net profit bef Except. 11 73 93 89 102 85 Growth Revenue Gth (%) (28.2) 33.1 27.0 15.5 8.5 (4.7)Opg Profit Gth (%) (69.9) (267.3) 330.5 36.6 (4.3) (8.3)Net Profit Gth (%) (78.0) (263.0) 789.2 21.2 9.4 (4.2) Margins Gross Margins (%) 26.6 28.6 28.7 26.4 27.2 27.5Opg Profit Margins (%) 3.5 8.8 12.0 10.4 10.6 10.0Net Profit Margins (%) 1.3 7.9 9.0 8.3 9.1 8.3 Source: Company, DBS Vickers

Company Focus

Johnson Electric

Balance Sheet (US$ m) Asset Breakdown

FY Mar 2010A 2011A 2012A 2013F 2014F 2015F

Net Fixed Assets 395 413 379 401 426 455Invts in Associates & JVs 2 2 2 2 3 3Other LT Assets 800 869 871 848 826 805Cash & ST Invts 372 379 401 545 684 828Inventory 196 253 240 241 257 276Debtors 360 422 384 419 445 476Other Current Assets 5 4 2 3 3 4

Total Assets 2,131 2,342 2,280 2,459 2,644 2,846 ST Debt 7 134 203 225 215 204Other Current Liab 430 460 437 445 473 506LT Debt 402 179 2 0 0 0Other LT Liabilities 119 147 150 150 150 150

Shareholder’s Equity 1,122 1,362 1,462 1,611 1,776 1,952Minority Interests 51 60 26 28 31 34Total Cap. & Liab. 2,131 2,342 2,280 2,459 2,644 2,846 Non-Cash Wkg. Capital 131 219 190 218 232 250Net Cash/(Debt) (36) 66 195 320 469 623Debtors Turn (avg days) 75.5 73.2 65.5 68.0 68.0 68.0Creditors Turn (avg days) 106.2 105.2 90.8 90.0 90.0 90.0Inventory Turn (avg days) 61.1 64.2 59.9 57.0 57.0 57.0Asset Turnover (x) 0.8 0.9 0.9 0.9 0.9 0.9Current Ratio (x) 2.1 1.8 1.6 1.8 2.0 2.2Quick Ratio (x) 1.7 1.3 1.2 1.4 1.6 1.8Net Debt/Equity (X) 0.0 CASH CASH CASH CASH CASHNet Debt/Equity ex MI (X) 0.0 0.0 (0.1) 0.0 (0.3) (0.3)Capex to Debt (%) 12.4 23.8 32.7 40.0 41.9 44.0Z-Score (X) 3.4 4.8 0.0 0.0 0.0 NA Source: Company, DBS Vickers

Net Fixed Assets - 25.2%

Assocs'/JVs - 0.1%

Bank, Cash and Liquid

Assets - 33.3%

Inventory - 15.1%

Debtors - 26.3%

Company Focus

Johnson Electric

Cash Flow Statement (US$ m) Capital Expenditure FY Mar 2010A 2011A 2012A 2013F 2014F 2015F

Pre-Tax Profit 104 226 221 239 256 274Dep. & Amort. 87 87 93 91 86 83Tax Paid (19) (28) (28) (34) (37) (39)Assoc. & JV Inc/(loss) 0 0 0 0 0 0(Pft)/ Loss on disposal of FAs 0 0 0 0 0 0Chg in Wkg.Cap. 85 (98) 23 (28) (15) (18)Other Operating CF 42 107 (10) 1 2 5Net Operating CF 298 294 299 269 293 304

Capital Exp.(net) (51) (75) (67) (90) (90) (90)Other Invts.(net) 0 1 5 0 0 0Invts in Assoc. & JV 0 0 29 0 0 0Div from Assoc & JV 0 0 0 0 0 0Other Investing CF (4) 2 2 0 0 0Net Investing CF (54) (72) (31) (90) (90) (90)

0102030405060708090

100

2011A 2012A 2013F 2014F 2015F

Capital Expenditure (-)

Div Paid 0 (40) (42) (53) (52) (56)Chg in Gross Debt (120) (95) (108) 19 (10) (10)Capital Issues 0 (11) (35) 0 0 0Other Financing CF (15) (41) 10 (1) (2) (5)Net Financing CF (136) (187) (175) (34) (64) (71)Currency Adjustments 2 5 4 0 0 0Chg in Cash 111 41 96 144 139 143Opg CFPS (US$) 0.06 0.11 0.08 0.08 0.09 0.09Free CFPS (US$) 0.07 0.06 0.06 0.05 0.06 0.06 Source: Company, DBS Vickers

Company Focus

Johnson Electric

PE band chart

PB band chart

1

2

3

4

5

6

7

Jun

-09

Oct

-09

Feb

-10

Jun

-10

Oct

-10

Feb

-11

Jun

-11

Oct

-11

Feb

-12

Jun

-12

Oct

-12

Feb

-13

Share Price (HK$)

8x

10x

11x

13x

15x

1

2

3

4

5

6

7

Jun

-09

Oct

-09

Feb

-10

Jun

-10

Oct

-10

Feb

-11

Jun

-11

Oct

-11

Feb

-12

Jun

-12

Oct

-12

Feb

-13

Share Price (HK$)

0.8x

1.0x

1.3x

1.6x

1.8x

Source: Bloomberg, DBS Vickers Source: Bloomberg, DBS Vickers

Company Focus

Johnson Electric

Appendix

Key management team

Name Age Role Responsibilities Date of Joining Experience Relationship

Executive Director

Patrick Shui-Chung Wang

61Chairman and Chief Executive

Member of Nomination and Corporate Governance Committee

1972 (joined the Group)1976 (appointed as a Director)1984 (appointed as Managing Director)1996 (elected Chairman and Chief Executive)

Chairman and a director of the HK Applied Science and Technology Research Institute Company LtdNon-ED and member of the Audit Committee of HSBC LtdNon-ED and member of the Nomination Committee of VTech Holdings LtdNon-ED of Tristate Holdings Ltd

Son

Winnie Wing-Yee Wang

65 Vice-ChairmanMember of Remuneration Committee

1969 (joined the Group)1971 (appointed as a Director)1984 (appointed as Executive Director)1996 (elected Vice-Chairman)

Non-ED of Tristate Holdings Ltd Daughter

Austin Jesse Wang

31Executive Director

2006 (joined the Group)2009 (appointed as a Director)

GM of Saia-Burgess China Industry Products Groupwas Technical Product Manager of Saia-Burgess Controls AGCommittee member of Shenzhen Committee of the Chinese People's Political Consultative Conferenceworked as a consulting engineer in the computing industry

Grandson

Non-executive Director

Yik-Chun Koo Wang

95Honorary Chairman

Co-founderVice-Chairman of Group in 1984 and was actively involved in development of the Group in its early stages

Mother

Peter Kin-Chung Wang

58 Non-ED Member of Audit Committee 1982

Chairman and CEO of Tristate Holdings LtdChairman and MD of Hua Thai Manufacturing Public Company Ltdwon the Young Industrialist Award of HK in 1998received the Outstanding Industrial Engineer Award from School of Industrial Engineering of Purdue Universitymember of Anhui Provincial Committee of Chinese People's Political Consultative Conferencehonorary chairman of the HK Garment Manufacturers Associationgeneral committee member of the Textile Council of HK Ltddirector of the Federation of HK Garment Manufacturers

Son

Source: Company

Company Focus

Johnson Electric

Key management team (continued) Name Age Role Responsibilities Date of Joining Experience

Peter Stuart Allenby Edwards

64 INEDChairman of Nomination and Corporate Governance Committee

1995 (Appointed as INED)

is a Solicitor and was Senior Partner of Johnson, Stokes & Master until 30 Sept 1996Chairman of the HK Branch of the International Fiscal AssociationChairman of the Revenue Law Committee of the HK Law Societymember of the Joint Liaison Committee on Taxationmember of the International Academy of Estate and Trust Lawdirector of a number of investment and holding companiesdirector of Martin Currie Pacific Trust plc.

Patrick Blackwell Paul

64 INED

Chairman of Audit CommitteeMember of Nomination and Corporate Governance Committee

2002 (appointed as INED)

Chairman and Senior Partner of PricewaterhouseCoopers in HK from 1994-2001INED of The HK and Shanghai Hotels, Ltd. INED of Pacific Basin Shipping Ltd.Chairman of the Supervisory Board of the British Chamber of Commerce in HK

Michal John Enright

53 INEDChairman of Remuneration CommitteeMember of Audit Committee


was a professor at Harvard Business Schoolcurrently a professor at the University of HK School of BusinessDirector in Enright, Scott & Associates, a HK-based consulting firm

Joseph Chi-Kwong Yam

64 INEDMember of Remuneration Committee


was Chief Executive of HKMA from 1993-2009Executive Vice President of the China Society for Finance and Banking, a society managed by People's Bank of ChinaMember of the Board of Directors, the Corporate Responsibility Committee and the Risk Committee of UBS AGINED, Chairman of the Risk Management Committee and member of the Strategic Development Committee of China Construction Bank Corporationmember of the advisory committees of a number of academic and private institution focusing in finance

Source: Company

Company Focus

Johnson Electric

Key management team (continued)

Name Age Role Responsibilities Date of Joining ExperienceSenior Management

Tung-Sing Choi

62Senior VP, Strategic Manufacturing

Global Manufacturing Management of the Croup

1968

40 years of experience in motor component manufacturing, motor assembly processes and the utilisation of machines and fixtures

James Randolph Dick

58

Senior VP, Strategic Marketing & Sales

Developing responses to macro market issuesLeading the Company's productising and selling process

1999

35 years of experience in high technology management throughout the worldheld Executive positions with Xerox (US), IBM (Europe) and Astec (BSR) plc

Robert Allen Gillette

46Senior VP, Supply Chain Services

Provide leadership and strategic direction in supply chain management for all business units of Johnson Electric

2007worked for Emerson electric, holding various operations, marketing and supply chain positions in N. America and Asia

Joseph Alan Guisinger

45

Senior VP, Industry Products Group - Europe and the Americas

Strategic, commercial and operational direction of the Industry Products Group in Europe and the Americas

2004worked for Emerson electricheld senior positions in Supply Chain Management in Asia and North America

Christopher John Hasson

49 Executive VP

Corporate business development, M&A, corporate strategic planningSupervision of the legal and company secretarial functionsBusiness units and investments under Johnson Electric Capital, including Saia-Burgess Controls

2002was partner at The Boston Consulting Group

Kam-Chin Ko 46

Senior VP, Automotive Products Group - Asia

Strategic, commercial and operational direction of the Automotive Products Group in Asia

1988

Doctor of Engineering from HK Polytechnic UniversityPreviously led the Components and Services Group and the Corporate Engineering functionsMember of The Institute of Engineering and TechnologyMember of the Institute of Industrial Engineers

Yiu-Cheung Kwong

46

Senior VP, Industry Products Group - Asia

Strategic, commercial and operational direction of the Industry Products Group in Asia

1999

have been a General Manager for Home Appliance Business Unit10 years experience with TDK, NHK and Philips, where he held a verity of positions in product engineering, product procurement , and sales & marketing

Peter Henry Langdon

63Senior VP, Human Resources

HR, Global Environmental, Health and Safety, and Training and Development

2007

was responsible for HRwas the Assistant Corporate Secretary for a major international energy service company

Yue Li 52Senior VP, Corporate Engineering

Overall corporate technology engineering operations and Value Innovation Programs

2004

PhD from University of Wisconsin-Madisonworked for Emerson Electric in St. Louis as director of new productsworked for Carrier Corporation in Syracuse as director of power electronics and motor technologiesworked for Emergency One Inc. in Florida as VP of product management

Source: Company

Company Focus

Johnson Electric

Mabuchi Motors (6592.JT)

Company Profile

Sales trend

Profitability

Mabuchi Motor was established in 1954 in Japan. It is currently listed on Tokyo Stock Exchange in 1986. Mabuchi manufactures and sells small DC motors to a range of industries, from automotive products to home & industrial equipment to optical & precision instruments. Mabuchi manufactures 100% of their products overseas, mainly in China. Mabuchi relies on their presence in Asia with 75% of their total revenue coming from the Asian market.

020,000

40,00060,000

80,000100,000

2009

2010

2011

1H11

1H12

(30)(20)

(10)0

1020

Turnover (LHS)Growth (RHS)

Yoy, %JPY m

(1,000)0

1,0002,0003,0004,0005,0006,000

2009

2010

2011

1H11

1H12

(2)0246810

Net profit (LHS)Net margin (RHS)

%JPY m

Source: Bloomberg Source: Bloomberg

SWOT Analysis

Geographic sales breakdown (FY11)

Sales breakdown ( FY11)

Strength: 20% global market share in the power windows market Diverse portfolio and long company history

Weakness: Fluctuation in market prices of steel and other materials. Fluctuation in exchange rates from yen and other Asian currencies as Mabuchi relies on the Asian market with all its operations located there. 100% of production is done outside Japan and in Asia.

Development: Expand business in China by developing an integrated development, production, and sales system in China and by reinforcement of quality and technology support of the Chinese automakers.

Europe16%

Japan12%

The Americas

9%

Asia & Other63%

Audio & Visual 12%

Optical16%

Home appliances

20%

Auto 52%

Source: Bloomberg Source: DBS Vickers General Data

Earnings Record

• Listed on Tokyo stock exchange – Ticker: 6592 JT

• Headquarters: Chiba (Japan)

• Production bases: Hong Kong, China, Taiwan, Vietnam

• Employees: 33,918 (95% in production division)

• Company website: http://www.mabuchi-motor.co.jp/

FY Dec (JPY m) 2009 2010 2011 1H11 1H12

Turnover 70,369 82,752 78,886 38,897 42,080

Gross profit 18,564 22,689 19,047 9,809 10,653

Operating profit 3,019 6,624 3,066 1,845 2,843

Net profit 5,450 5,260 (466) 2,252 2,999

EPS (JPY) 155.54 150.14 (13.31) 64.29 85.60

Balance Sheet

FY Dec (JPY m) 2009 2010 2011 1H12

Total assets 192,362 185,408 181,351 184,258

Total liabilities 12,051 10,838 12,813 12,300

Shareholders' equity 180,311 174,570 168,538 171,958


Company Focus

Johnson Electric

Nidec (6594.JT)

Company Profile

Sales trend

Profitability

Nidec was established in 1973 in Japan. In 1979, they became the first company worldwide to put spindle motors into practical use, in an 8-inch-diameter hard disk drives. Like Mabuchi, they manufacture and sell motors for similar target industries. In 1998, Nidec was listed on the Tokyo Stock Exchange. It is currently also listed on the Osaka Stock Exchange as well as the New York Stock Exchange. Nidec has a strong presence in Asia, with 78% of total revenue coming from this market with 25% from Japan itself. Their products are 100% manufactured in Asia from countries like Thailand, China, Philippines, Vietnam and Malaysia.

500,000

550,000

600,000

650,000

700,000

2009

2010

2011

2012

(20)

(10)

0

10

20


Yoy, %JPY m

010,00020,00030,00040,00050,00060,000

2009

2010

2011

2012

02

46

810


%JPY m


SWOT Analysis



Strength: Flagship products, brushless DC motors, deliver highly competitive environmental advantages precisely matched to the needs of the times

Nidec’s brushless DC motors hold global leadership positions in a broad spectrum of motor markets for applications ranging from information technology devices and automobiles to home appliances and industrial equipment

Weakness: Reliant on their two largest customers which represent 22% of net sales for 2012 and the largest customer accounts for 12%. Development: The company has already merged or acquired four different companies. (two US, Italy and South Korea) Plans to continue to position business acquisitions as an important pillar of its strategic growth plans.

Rest of the World

1%

Europe9%

North America

12%

Japan26%

Asia52%

Small Precision

Moto44%

Mid-Size Motors26%

Electronic and Optic

14%

Machinery10% Other-

Auto Parts6%


Earnings Record

• Listed on Tokyo stock exchange – Ticker: 6594 JT

• Headquarters: Kyoto (Japan)

• Production bases: Thailand, China, Philippines, Vietnam, Malaysia

• Employees: 107,489

• Company website: http://www.nidec.co.jp/

FY Mar (JPY m) 2009 2010 2011 2012

Turnover 613,458 587,459 688,530 682,320

Gross profit 130,565 151,122 175,360 158,591

Operating profit 51,806 78,342 90,527 73,070

Net profit 28,353 51,961 52,333 40,731

EPS (JPY) 197.42 373.04 375.91 296.25

Balance Sheet

FY Mar (JPY m) 2009 2010 2011 2012

Total assets 702,884 692,791 748,205 800,401




Company Focus

Johnson Electric

Bosch (private company)

Company Profile

Sales trend

Profitability

Bosch Group is the leading global supplier of technology and services. It operates in the areas of automotive, industrial, and consumer goods and building technology. It is the world’s largest independent parts supplier to the automotive industry and this business sector accounts for ~60% of their annual turnover. The company was set up in Stuttgart in 1886 by Robert Bosch. It is a private, family-owned company with majority of its shares held by a charitable foundation, Robert Bosch Stiftung GmbH. The group, including all its subsidiaries, regional companies, sales and service partners, are represented in ~150 countries. In 2011 itself, Bosch spent 4.2 billon Euros for R&D and applied for over 4,100 patents worldwide.

010,00020,00030,00040,00050,00060,000

2008

2009

2010

2011

(20)

(10)

0

10

20

30


Yoy, %EUR m

(2,000)

(1,000)

0

1,000

2,000

3,000

2008

2009

2010

2011

(4)

(2)

0

2

4

6


%EUR m


SWOT Analysis



Strength: Strong financial performance Global presence – comprises of over 350 subsidiaries in 80 locations in more than 50 countries. Weakness: Change of megatrends such as energy efficiency, climate protection, and scarcity of resources. Increase prominence of information, communication, and internet technologies, which are ever changing the competitive landscape. Development: Further expand their market position worldwide, focusing on growth regions of Asia, South America, and Central and Eastern Europe. Additional sales companies and agencies in Africa and the Middle East. Increase flexibility and agility to cope with the economy and the market.

Rest of the World1.7%

The Americas

17.8%

Asia21.5%

Europe59.0%

Automotive Technology

59.0%Consumer Goods25.3%

Industrial Technology

15.6%All other segments

0.0%


Earnings Record

• Private company

• Headquarters: Gerlingen (Germany)

• Subsidiaries locations : US, Germany, India, Brazil, China, France, Czech Republic, Japan, Spain, Turkey, Hungary, Italy, United Kingdom, Portugal, Romania, Netherlands, Switzerland, Australia, Malaysia, Austria, Belgium, South Korea, Russia, Poland, Sweden, South Africa, Vietnam, Tunisia • Employees: 302,500 (37% based in Germany)

• Company website: http://www.bosch.com/

FY Dec (EUR m) 2008 2009 2010 2011

Turnover 45,127 38,174 47,259 51,494

Gross profit 13,574 10,656 16,195 16,947

Operating profit 1,486 (1,119) 3,197 3,973

Net profit 344 (1,260) 2,377 1,746

EPS (EUR) #N/A N/A (1.05) 1.98 1.45

Balance Sheet

FY Dec (EUR m) 2008 2009 2010 2011

Total assets 46,761 47,509 52,683 54,616




Company Focus

Johnson Electric

Brose (private company)

Company Profile Brose is a partner to the international automobile industry and supplies mechatronic systems and electric drives to about 80 automotive manufacturers and more than 30 suppliers. Brose has 53 locations in 23 countries on all major automotive markets worldwide. Brose is a German private, family-owned company founded by Max Brose in Berlin and Ernst Jühling in Coburg in 1919. Currently it is the fourth largest family owned company among the top 100 automotive suppliers worldwide. Brose are currently focusing on new products designed to cut fuel consumption and develop component and systems to make automobiles safer and more comfortable to use.

SWOT Analysis Strength: Ranked one of the best employers in the industry by international research institute CRF for four years in a row. Has a global market share of 44% in the automotive door systems market. Recognized as a key supplier for window regulators by PSA Peugeot Citroën Weakness: Highly reliant on their current products which is a very niche market. The current market is unstable, with continuous changes in requirements, especially in the environmental and safety areas. Development: Recently opened a new production plant in Chongqing (31 July 2012)

Brose plans to start operations in six new plants in Hungary, Russia, China, the USA and Brazil over the next 12 months.

General Data • Private company

• Headquarters: Coburg (Germany)

• Production bases: Mexico, US, Brazil, Germany, UK, Sweden, Russia, Spain, Portugal, France, Belgium, Czech Republic, Slovakia, Hungry, Turkey, Africa, China

• Employees: ~20,000

Company website: http://www.brose.de


Company Focus

Johnson Electric

DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:

STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)

BUY (>15% total return over the next 12 months for small caps, >10% for large caps)

HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)

FULLY VALUED (negative total return i.e. > -10% over the next 12 months)

SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com); Thomson (www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com) and Bloomberg (DBSR GO). For access, please contact your DBSV salesperson.

GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers (Hong Kong) Limited (“DBSVHK”), a direct wholly-owned subsidiary of DBS Vickers Securities Holdings Pte Ltd ("DBSVH"). This report is intended for clients of DBSV Group only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVR. It is being distributed in the United States by DBSV US, which accepts responsibility for its contents. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBS Vickers Securities (USA) Inc (“DBSVUSA”) directly and not its affiliate. The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBSVHK and/or DBSVH) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. DBSVHK accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. DBSVH is a wholly-owned subsidiary of DBS Bank Ltd. DBS Bank Ltd along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. DBSVHK, DBS Bank Ltd and their associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by DBSVHK and/or DBSVH (and/or any persons associated with the aforesaid entities), that:

a. such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and

b. there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein.

Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

ANALYST CERTIFICATION The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of the date the report is published, the analyst and his / her spouse and/or relatives and/or associate who are financially dependent on the analyst, do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities, directorships and trustee positions).

Company Focus

Johnson Electric

COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBSVHK and its subsidiaries do not have a proprietary position in the securities recommended in this report as of the date the

report is published.

2. DBSVHK, DBSVUSA, DBS Bank Ltd and/or other affiliates may beneficially own a total of 1% or more of any class of common

equity securities of the subject company mentioned in this document as of the latest available date of the updated information.

3. Compensation for investment banking services: DBSVHK, DBSVUSA, DBS Bank Ltd and/or other affiliates may have received compensation, within the past 12 months, and within the next 3 months may receive or intends to seek compensation for investment banking services from the subject company mentioned in this document.

DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

RESTRICTIONS ON DISTRIBUTION

General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Australia

This report is being distributed in Australia by DBSVR and DBSVS, which are exempted from the requirement to hold an Australian financial services licence under the Corporation Act 2001 [“CA] in respect of financial services provided to the recipients. DBSVR and DBSVS are regulated by the Monetary Authority of Singapore [“MAS”] under the laws of Singapore, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the CA..

Hong Kong This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and regulated by the Hong Kong Securities and Futures Commission.

Singapore

This report is being distributed in Singapore by DBSVR, which holds a Financial Adviser’s licence and is regulated by the MAS. This report may additionally be distributed in Singapore by DBSVS (Company Regn. No. 198600294G), which is an Exempt Financial Adviser as defined under the Financial Advisers Act. Any research report produced by a foreign DBS Vickers entity, analyst or affiliate is distributed in Singapore only to “Institutional Investors”, “Expert Investors” or “Accredited Investors” as defined in the Securities and Futures Act, Chap. 289 of Singapore. Any distribution of research reports published by a foreign-related corporation of DBSVR/DBSVS to “Accredited Investors” is provided pursuant to the approval by MAS of research distribution arrangements under Paragraph 11 of the First Schedule to the FAA.

United Kingdom

This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the meaning of the Financial Services and Markets Act and is regulated by The Financial Services Authority. Research distributed in the UK is intended only for institutional clients.

Dubai/ United Arab

Emirates

This report is being distributed in Dubai/United Arab Emirates by DBS Bank Ltd, Dubai (PO Box 506538, 3rd Floor, Building 3, Gate Precinct, DIFC, Dubai, United Arab Emirates) and is intended only for clients who meet the DFSA regulatory criteria to be a Professional Client. It should not be relied upon by or distributed to Retail Clients. DBS Bank Ltd, Dubai is regulated by the Dubai Financial Services Authority.

United States Neither this report nor any copy hereof may be taken or distributed into the United States or to any U.S. person except in compliance with any applicable U.S. laws and regulations.

Other jurisdictions

In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

DBS Vickers (Hong Kong) Limited

18th Floor Man Yee building, 68 Des Voeux Road Central, Central, Hong Kong

Tel: (852) 2820-4888, Fax: (852) 2868-1523

china / hong kong company focus johnson...

Documents