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WIKI ANALYSIS
Mitsui & Co Ltd. NASDAQ:MITSY TYO:8031 is a Tokyo based multinational conglomerate (3 regional corporate locations) operating within four core business areas; they focus on the procurement of mineral resources and oil/gas, the development of commercial and private infrastructure, expansion of logistics networks for industrial uses worldwide and healthcare, housing and other services to corporate clients. Other important services involve providing customers with marketing services (oversees a global network, that gives it an advantage over institutions with less international exposure), credit and other financing products, assessing the risk of doing business in specific countries/sectors of that economy and cost management.
Advantages the company has over some others include the numerous strategic partnerships it has with other large companies like private company Baosteel of China (helps give it access to the Chinese market), Vale (makes the Brazilian market more accessible, China and Brazil represent half of the BRIC, leading emerging economies), and Russian Railways (a working group was created in 2007 in which Mitsui acts as a sales agent for logistics customers wanting to transport cargo by rail from Japan to Russia) and environmental solutions projects among them metal recycling, its involvement in new alternative energy related vehicle technology . It also owns 25% of Erdos one of China's biggest companies. Erdos engages in coal mining as well as the production of energy and metal alloys. In addition to China and Brazil Mitsui also plays an important role in Russia through its logistics business which is a key provider of Japanese cargo to the country (including Moscow) by rail (trains). It is also an important supplier of ammonia to Asia.
Company Overview
As with all conglomerates products (and services) are varied. Altogether operations are divided into 14 main business segments, 6 of them related to raw materials and energy, 2 logistics with 2 others supplying aerospace and motor vehicles through leasing and sales, 1 infrastructure, 1 plant growing/food processing and storage unit, 1 provider of financial advice and 1 other providing a wide range of services ranging from healthcare/pharmaceutical support to real estate and catering services. Having such an expansive business bodes well for customers and investors seeking a highly diversified business with experience in many key economic sectors that has had success multitasking. Having limited exposure to each industry can make it less risky than some of its competitors. In 2010 Mitsui created a renewable energy division called Mitsui & Co. Ltd. Infrastructures provides purification, storage and transport of different types of raw materials including water, LNG (natural gas), oil and others. Mitsui Chemicals is a specialty chemical producer in the business of phenol, textile materials (synthetic), polyethylene terephthalate resins, polyurethane, polyethylene and polypropylen.
Marketing advice targets corporate customers and involves business trend analysis and the gathering and interpreting of vital information about each market including government legislation (what's allowed, what are the tax implications).
Companies that it is the largest shareholder in
- On November 18, 2010 Mitsui overtook Ford as the largest shareholder of Mazda. Ford had been the leading holder of mazda stock for 31 years until November when it reduced its ownership from 11% to 3.5%. Some of that interest was sold to Mitsui, Mitsui is also Mazda's main lender.[1][2]
- In December 2010 Mitsui became the largest shareholder of Taiwanese LED chipmaker Formosa Epitaxy after raising its share to 15% (private placement). The LED's produced by Formosa are used in appliances like computer monitors and tv's as well as vehicles.[3]
Business and Financials including revenue, earnings and assets
| 3 of the 11 segments yr end Mar'10[4] billion yen | Amerca's | Europe/ME/Africa | Asia Pacific | Other | adj/elim |
| gross profit | 73.082 | 16.655 | 27.862 | 0.506 | 0.898 |
| net income | (9.572) | 3.771 | 25.719 | 1.481 | (33.856) |
| total assets | 507.065 | 132.109 | 305.980 | 2,725.444 | (1,584.516) |
In the six months after the fiscal year ended March 31, 2010 the company lost ¥158.4 (about US$1.93 billion) in asset value; current assets, investments and liabilities each lost about 100 billion yen in value however interest bearing debt improved (down 100 billion yen).[5] Operating cash flow fell 17.64% in the first half of 2011 when compared to the corresponding period the year before; although operating income increased 128.53% (¥93.8 billion, US$1.1 billion) net cash outflow counteracted it by ¥160.4 billion (almost US$ 2 billion). Both regional and industry categories are segments, regional business units do not include data for each industry even though the activity takes place within one of those regions, they are separate divisions. Mitsui's fiscal year starts and ends in March.
| Financial Statement key data avg fx to USD during period yearly:March previous year to March current year, half:March '10 to September '10 | 2010 financials by industry[4] | |||||||||
|
(billion Yen) | 2007[6] | 2008[6] | 2009[7] fx 100.53736[8] | 2010[4] fx 92.899096[9] | 1H11[5] fx 88.972779[10] |
(billion Yen) | expenses | operating income | net income | total assets |
|---|---|---|---|---|---|---|---|---|---|---|
| revenue | 4,793.957 | 5,535.225 | 5,738.878 | 5,504.789 | 2,204.327 | products iron/stl | 32.1 | 1.173 | 3.2 | 460.562 |
| gross profit | 866.300 | 1,016.306 | 988.077 | 999.264 | 437.8 | infrastructure | 15.4 | 10.74 | 19.3 | 1,323.237 |
| EBIT | 309.174 | 247.307 | 402.004 | 242.178 | 189.124 | energy | 56.2 | 98.458 | 83.8 | 1,458.763 |
| net income | 301.502 | 177.607 | 410.061 | 177.607 | 183.234 | IT consumer serv | 61.7 | (8.762) | 9.8 | 528.174 |
| basic per share | 174.26 | 227.20 | 97.59 | 82.12 | 100.42 | mineral resources | 15.4 | 56.81 | 62.9 | 912.777 |
| shareholders equity | 2,110.279 | 2,183.660 | 1,881.663 | 2,230.128 | 2,215.665 | chemical | 49.4 | 14.885 | 11.9 | 605.727 |
| total assets | 9,813.312 | 9,537.829 | 8,364.243 | 8,368.984 | 8,210.594 | foods | 63.0 | 20.394 | 0.8 | 609.146 |
| operating cash flow | 0.239275 | 0.415791 | 0.5826 | 0.63236 | 0.2708 | logistics financial | 28.9 | 1.493 | (0.839) | 384.516 |
Competition
- Itochu Corporation - competes in different industries especially food processing. Itochu was also one of the main buyers of mazda stock (along with Mitsui) in the Ford selloff.[11]
- Marubeni Corporation - competes in metals and materials and logistics
- Sumitomo Corporation - competes with Mitsui in chemicals, infrastructure projects, transportation and logistics.
References
- ↑ Ford to cut Mazda stake, losing top shareholder title (2010-11-18).
- ↑ Sumitomo Mitsui To Overtake Ford as Mazda's Top Shareholder, Chairman Says (2010-10-18).
- ↑ Formosa attracts Mitsui to become its largest shareholder through private placement (2010-12-28).
- ↑ 4.0 4.1 4.2 Mitsui 2010 Annual Report page 52 for divisional/regional data, page 46 for consolidated (2010).
- ↑ 5.0 5.1 Mitsui 2011 First Half Report (2010-11-02).
- ↑ 6.0 6.1 Mitsui 2008 Annual Report Year ended March 31, 2008 (2008-05-02).
- ↑ Mitsui 2009 Annual Report Year ended March 31, 2009 (2009-05-07).
- ↑ 2008-2009 avg monthly exchange rates Yens to 1 USD.
- ↑ 2009-2010 avg monthly exchange rates Yens to 1 USD.
- ↑ 2010 avg monthly exchange rates Yens to 1 USD.
- ↑ Ford holdings of the largest shareholder of Mazda shares top spot to make way (2010-11-18).
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