The IT systems and hardware provider has been unable to join in the improving prospects enjoyed by the sector. In addition they have been throwing a lot of cash at setting up an IT service for regional banks, with very little take-up. The company is now looking to make small, bolt-on acquisitions which we feel will add very little to the business and more likely be an unwelcome distraction at a time when they should be focussing on core problems.
Nihon Unisys is a leading Japanese provider of IT systems integration and services. The company has a strong market position amongst financial institutions, which we see as a major positive given this sector is embarking on a major overhaul and upgrade of its IT capabilities. In addition, Nihon Unisys is set to gain from a marked reduction in the legacy license fee it pays to Unisys. This will benefit FY08 results, which is also when we expect the underlying business to be operating at top speed. The valuation does not reflect this combination of positive industry and company-specific factors, with a P/Sales of just 0.5x and a 12 month forward PE of 10.7x.
| Sedol |
Type |
Price |
Date |
|
6642688 |
Sell |
JPY 1556.491 |
17/05/2007 |
|
6642688 |
Buy |
JPY 2032.489 |
01/12/2006 |
|
6642688 |
Buy |
JPY 2043.396 |
30/11/2006 | |
