Mitsubishi Heavy Industries, Ltd.
***This research report will be completed upon publication of FY2022 Financial Results by the Company on May 10, 2023***
Summary
Brief Company Overview
Mitsubishi Heavy Industries (TYO:7011) Group is an engineering company and one of the world's leading industrial groups that spans its operation from energy, logistics & infrastructure, industrial machinery, aerospace and defense, to automobiles. The company is listed in Tokyo Stock Exchange with the trading symbol "7011" and named Mitsubishi Heavy Industries, Ltd. The origin of the company can be traced back to 1884 when Yataro Iwasaki took a lease out on government-owned Nagasaki Shipyard and renamed it Nagasaki Shipyard & Machinery Works. He started shipbuilding business on a full scale. This shipbuilding business was later turned into Mitsubishi Shipbuilding Co., Ltd., and then launched as Mitsubishi Heavy-Industries, Ltd. in 1934, manufacturing ships, heavy machinery, airplanes, and railroad cars.1
Mitsubishi operates through Energy Systems; Plants & Infrastructure Systems; Logistics, Thermal & Drive Systems; and Aircraft, Defense & Space segments. The company belongs to specialty industrial machinery; it employs 77,430 full-time employees as of December 31, 2022. Mitsubishi is headquartered in 2-3, Marunouchi 3-chome, Chiyoda-ku, Tokyo, Japan. Seiji Izumisawa is the current President, CEO & Representative Director of the company. It has 8 domestic offices including the head office, 6 overseas offices in Turkey, Middle East, Taipei, Hanoi, Ho Chi Minh, and Kuala Lumpur. Consolidated total number of companies in the group is 260 - among them 68 are domestic and 192 are overseas. The company has 12 works and plants.2
As of May, 2023, 52-week range of the company's share price has been between ¥5,687.00 to ¥4,340.00. Trailing P/E of the company is 13.28 times, price to sales (ttm) ratio is 0.42 times, profit margin is 3.13%, return on assets (ttm) is 1.63%, return on equity is 8.94%. Trailing annual dividend yield of the company is 1.05%, and payout ratio is 29.74%. The company split its share on September 27, 2017 to the ratio of 1 to 10.
Business Overview
The company offers thermal, renewable energy, nuclear power generation, and engine power plants; oil and gas production plants; lithium-ion battery products and fuel cells; civil aircrafts and engines, aviation equipment, and maintenance, repair, and overhaul of aircrafts; and launch vehicles and services, rocket engines, reaction control systems, space stations, rocket launchers, rocket engine combustion test facilities, and electronic parts.3 It also provides passenger and commercial ships, LNG and LPG carriers, special purpose vessels, and IT services and systems; marine machineries, boilers, turbines, engines, and structures; and intelligent transport systems products and solutions, such as electronic toll collection system, road user charging system, highway traffic management system, EV management system, and development system. In addition, the company offers organic solvent exhaust gas treatment system, waste-to-energy system, sludge treatment system, air quality control system, and bio-treatment system; turbochargers, car air-conditioning and refrigeration systems, rubber and tire machinery, and testing equipment; forklift trucks; and printing, paper converting, and metals, and food & packaging machinery, pumps, compressors & mechanical turbines, hydraulic components. Further, it provides gas holders, vibration control systems, water pipes, tunnel excavation machinery, and cybersecurity solutions for industrial control systems; special vehicles, naval ship and maritime systems, defense aircrafts, helicopters, defense aeroengines, and guided weapon systems; CO2 capture plants; and after-sales services.
Major parts of Mitsubishi Group4
The relationship between FORM MHI, MHI MTH, MHI and Mitsubishi Electric is such that all are part of the Mitsubishi Group. It is a corporate group of more than 600 companies, including Mitsubishi Motors, Nikon and MHI, covering a variety of commercial activities, from banking and insurance to mining and machinery. Mitsubishi Heavy Industries (MHI), with its 130 years of history, operates under Mitsubishi and is focused on efficient and clean energy, comfortable and safe living, clean environment, logistics and transportation.
Mitsubishi Heavy Industries Thermal Systems (MHI MTH) is a group company specialized in air conditioning to support domestic and international group companies. Mitsubishi Heavy Industries Thermal Systems design and manufacture of air conditioning for HVAC systems and automobiles within the MHI group.
After the successful cooperation of MHI and FORM in Turkey , FORM MHI Klima Sistemleri A.Ş. is a company established as a result of the Joint Venture agreement signed in Jan.30th, 2019.
Mitsubishi Electric, a former division of Mitsubishi Heavy industries, broke away in 1921 to embark on semiconductor technology. The two are direct competitors in the VRF and split product sectors although they have come to the air conditioning market on very different routes.
Company History
In 1884, Yataro Iwasaki, the founder of Mitsubishi, leased the Nagasaki Seitetsusho from the Japanese government, renamed it the Nagasaki Shipyard & Machinery Works and entered the shipbuilding business on a large scale. Iwasaki purchased the shipyards outright in 1887. In 1891, "Mitsubishi Heavy Industries - Yokohama Machinery Works" was started as Yokohama Dock Company, Ltd. Its main business was ship repairs, to which it added ship servicing by 1897.
Nagasaki Shipyard & Machinery Works was later turned into Mitsubishi Shipbuilding Co., Ltd., and then launched as Mitsubishi Heavy-Industries, Ltd. in 1934, manufacturing ships, heavy machinery, airplanes, and railroad cars. Following the World War II, the Japanese government took an initiative to dismantle large industrial groups (zaibatsu), MHI was divided into three independent and competing companies. Thus, in 1950, MHI was divided into three entities: West Japan Heavy-Industries, Ltd., Central Japan Heavy-Industries, Ltd. and East Japan Heavy-Industries, Ltd. The three companies later consolidated in 1964 and reborn as Mitsubishi Heavy Industries, Ltd.
In 1958, in cooperation with 23 other Mitsubishi Group corporations, Mitsubishi Heavy Industries created Mitsubishi Atomic Power Industries. MHI continues to dominate contemporary Japanese production of atomic power. The businesses in which the group entered during the period of depression in shipbuilding business due to the WWI, started flourishing now. During that time of crisis, Mitsubishi Shipbuilding Company (MSC) actively pursued a number of other technological developments, most notably the airplane and the automobile. Having made its first airplane in 1916 and first auto in the following year, MSC grouped these products under the name Mitsubishi Internal Combustion Engine Manufacturing Company in 1920. This offshoot went through several changes before taking the name of Mitsubishi Aircraft Company in 1928, at which time it was already one of Japan's leading manufacturers of military aircraft. After six years of independence, however, the aircraft and automobile facilities were once again united with MSC to form Mitsubishi Heavy Industries in 1934. In the early 1960s, Automobile production rose steadily, if not as quickly as at rivals Toyota and Nissan, and by 1964 the Nagoya plants were manufacturing 4,000 cars per month. Even aircraft production had been resumed by the early 1960s.5
In 1970, MHI's automobile department became independent and Mitsubishi Motors Corporation began manufacturing and marketing automobiles. The 1973 oil crisis marked the end of Japan's rapid economic growth and had a major impact on MHI's business, particularly in shipbuilding. After that point, the company established an industrial machinery business and enjoyed steady expansion until Japan again entered a period of slow growth following the bursting of its economic bubble. During that period, Mitsubishi succeeded in launching rockets and expanded its business domains to include aerospace.
The decade 1960-1970 saw increasing dependence of the world on imported oils. In the awake, Mitsubishi received an avalanche of orders for oil tankers. This ensued the effects like reunion of all three parts of Mitsubishi in 1964. Tanker-building business utilized the bulk of MHI's resources. A new dock with 300,000-gross-ton capacity was built at Nagasaki in 1965, followed by the 1972 completion of a mammoth 1-million-gross-ton supertanker facility at the same yard. This ultra-efficient dock enjoyed only a short life, however--the oil crisis of 1973 and 1974 soon brought tanker orders to a near standstill, permanently crippling the entire Japanese shipbuilding industry.
By 1975, as a result of that downturn, MHI generated only about 40% sales from the shipbuilding segment and only about 33% of its employees worked there. By 1985, the numbers further declined to only 15% and 17%, respectively. However, MHI managed to shift its assets quickly enough to survive. Having already spun off its automobile division to form Mitsubishi Motors Corporation in 1970, MHI aggressively pursued clients in the power-plant and factory-design fields. It also resumed its position as the top supplier of military hardware to Japan's growing defense force. MHI has streamlined its production facilities by shifting employees from older industries such as shipbuilding to newer ones such as machinery and power-plant production, at the same time allowing natural attrition to shrink its overall labor bill.
MHI participated in a ¥540 billion emergency rescue of Mitsubishi Motors in January 2005, in partnership with Mitsubishi Corporation and Mitsubishi Tokyo Financial Group. As part of the rescue, MHI acquired ¥50 billion of Mitsubishi Motors stock, increasing its ownership stake to 15 percent and making the automaker an affiliate again.
In October 2009, MHI announced an order for up to 100 regional jets from the United States-based airline Trans States Holdings.
MHI entered merger talks with Hitachi in 2011 which later broke down and were suspended.6 This would have been the largest merger between two Japanese companies. However, t
- ^ https://www.mhi.com/company/aboutmhi/history.html
- ^ https://www.mhi.com/company/aboutmhi/outline.html
- ^ https://finance.yahoo.com/quote/7011.T/profile?p=7011.T
- ^ https://www.form-mhiklima.com/en-us/corporate/history#
- ^ https://www.referenceforbusiness.com/history2/66/Mitsubishi-Heavy-Industries-Ltd.html
- ^ https://www.bbc.com/news/business-14398128
