[Earnings Preview] Will Toyota break a new high with record-breaking financial results, and the momentum is to reach 6.5 trillion yen in operating profit

The reevaluation of hybrid cars is a tailwind
Toyota's group sales volume for fiscal year 23 (including Daihatsu Motor and Hino Motors) recorded a record high of 1.09 million units, up 5.0% from the previous fiscal year. Toyota alone has reached over 10 million units, up 7.3% to 10.31 million units.
What is boosting Toyota's sales volume is that Toyota was the first in the world to popularize itStrong sales of hybrid vehicles (HVs)That is a major factor. What is fiscal year 23Hybrids account for 35% of Toyota car sales。Hybrids accounted for 860,000 out of 1.53 million units in Japan, surpassing the majority for the first time。
The reason behind this is that the growth in demand for EVs has hit a dead end. There are government subsidies, etc. for EVs from Europe, America, China, etc., the fact that the cruising range (distance that can be traveled on a single charge) is short and the charging infrastructure is not in place, and purchases by early adaptors (people who buy products and services at an early stage) have gone round. As a result,Hybrid cars are being re-evaluated by consumers as a “realistic solution” at the momentIt can now be done.

Will it rise further due to the depreciation of the yen
During the fiscal year ending March 24, Toyota revised its earnings forecast upward twice when the interim financial results and the third quarter financial results were announced. One major reason for this is that the exchange rate of yen has been lower than expected. At the time of financial results for the 3rd quarter, the estimated rate was revised from 1 dollar = 141 yen to 143 yen, but the fourth quarter started in the 141 yen range and ended in the 151 yen range, and the yen continued to depreciate above expectations in general.
Also, earnings forecasts were made for the second timeThe rate of progress against earnings forecasts as of the third quarter has reached 78% in sales, 87% in operating profit, and 88% in net profit。
Maintaining the pace of sales and profits until the 3rd quarterBy simple calculation, operating profit is 6.5 trillion yen and net profit is 6 trillion yenbecomes.
hithertoSince operating profit had never reached 3 trillion yen for Japanese companies, financial results greatly break record records for both Toyota and Japanese companiesLooks like it's going to happen.

How far will stock prices grow?
Strong performance is also reflected in stock prices. Toyota's stock price has risen 39.16% since the beginning of the year as of the closing price on 5/1. 3891 yen, which is the high price since listing, was added on 3/27.
The total market capitalization surpassed Samsung Electronics in February and became the second largest Asian listed company, and in March the total market value reached 60 trillion yen for the first time as a domestic company。

Attention is drawn to the extent to which parts that have not yet been factored into the market are included in the contents of financial results announcements.

Factors of anxiety are the effects of group scandals and EV development in China
However, there is also an element of anxiety that hinders the rise in stock prices.
The biggest problem is that Hino Motors, Daihatsu Motor, and Toyota Industries, which are under their umbrella, announced that fraud was being carried out in tests related to certification acquisition in their respective countries from 22/3 to 24/1. Since some production was stopped due to this effect, the sales volume for 24/2/3 split from the same month of the previous year. It is also one of the reasons why global sales volume did not reach the plan.
Toyota is in MarchA person from Toyota was dispatched as the president of Daihatsu MotorAlso, it is a policy to proceed with corporate culture reforms, but there is a possibility that the impact will continue even after entering fiscal year 24. A scandal began, and Hino Motors decided to integrate business with Mitsubishi Fuso Truck and Bus, which is under the umbrella of Daimler Trucks by the end of 24, and Toyota lost one subsidiary.
For this reason, there seems to be a possibility that Toyota's earnings forecast for the fiscal year ending 25/3 will be a conservative figure.

Also,Its presence in China, which is the world's largest automobile market, is fadingThere is also a possibility that this will hinder the rise in stock prices. Although the number of units sold in fiscal year 23 barely increased from the previous fiscal year, it paled in comparison to growth in the US and Japan, and it did not reach the increase in the number of units sold in China as a whole.

Looking at the calendar year, it can be seen that Toyota's sales volume in China has been declining for 3 consecutive years, and the decline in market share has also become remarkable.

The penetration rate of EVs is high in the Chinese market, and since domestic players such as BYD are putting on a sales offensive, EV development strategies are becoming important in order to rebound.
Incidentally, as for Toyota's target sales volume of EVs for fiscal year 23, the full-year sales forecast was revised downward from 202,000 units to 123,000 units when the interim financial results were announced, but the actual sales volume remained at around 117,000 units.

ー MooMoo News Mark
Source: Toyota and other companies' websites, Nihon Keizai Shimbun, Bloomberg, China Automobile Manufacturers Association, Moomoo