[5201 AGC] Company Analysis and Future Potential

Conclusion! A Company with Investment Potential

Personally, I believe this is a good time to invest in this company

The most recent buying opportunities were in mid-March and early April, but since this is only hindsight, it’s impossible to know what the future holds

If a second bottom were to occur in the future, there’s a high likelihood the price would fall below current levels, but since most companies carry that risk, I believe the timing of entry is crucial

Below, I’ll outline the reasons why AGC is an attractive investment

What Does AGC Do?

First, I looked into AGC’s basic information.

Originally known as Asahi Glass Co., Ltd., the company changed its name to AGC in July 2018,

It is now the world’s largest glass manufacturer, with a history spanning over 100 years

It is also a member of the Mitsubishi Group.

Furthermore, it is a constituent of the Nikkei 225 in the ceramics sector; with 213 group companies, it is a major corporation with revenue totaling 1,518 billion yen in 2019

Its business operations are primarily divided into four sectors: “Glass,” “Electronics,” “Chemicals,” and “Ceramics.”

(Quoted from the AGC website)

As the company’s name suggests, glass products are its main source of revenue, but the chemicals business is also growing at a similar pace

I. First Quarter of the Previous Fiscal Year (January 1, 2019 – March 31, 2019)

The breakdown by segment is as follows:

Figures for ceramics and other segments do not appear to be disclosed due to various circumstances

(Quoted from the First Quarter Financial Results for the Fiscal Year Ending December 2020)

Profit up 7% from the same period last year

On May 18, the company announced its First-Quarter Financial Results for the Fiscal Year Ending December 2020

The fact that the company achieved a 7% increase in operating profit despite being affected by the COVID-19 pandemic is a positive development.

On the following day, May 19, the Nikkei Stock Average rose, and AGC was among the top gainers

(Quoted from the First Quarter Financial Results for the Fiscal Year Ending December 2020)

COVID-19-related contracts and vaccine development

Since there were three COVID-19-related announcements in May, I have summarized them below.

AGC <5201.T> announced on the 13th that it had expanded its production capacity for “Twin Carbo” to meet growing demand for partitions effective in preventing droplet transmission in offices, cafeterias, and other settings.The company’s “Twin Carbo” is a transparent, hollow-structured sheet created by integrally molding sturdy polycarbonate sheets using a special technique, and it is said to offer excellent impact resistance.Furthermore, compared to standard polycarbonate sheets, it is ultra-lightweight—weighing about one-fifth as much—and offers high design flexibility; it has reportedly been widely used for interior applications in offices and homes.

Morningstar, Inc.

AGC <5201.T> announced on the 14th that its U.S.-based CDMO subsidiary, AGC Biologics, has been commissioned by Denmark’s AdaptVac to manufacture a COVID-19 vaccine candidate.AdaptVac is a member of “PREVENT-nCoV,” an EU (European Union) consortium aimed at preventing the spread of the novel coronavirus, and is working on the development of a vaccine against the virus.Development of the vaccine is reportedly proceeding with the goal of beginning clinical trials in the second half of 2020. A CDMO is a company that, in addition to contract manufacturing, undertakes and performs the development of manufacturing methods on behalf of clients.

Morningstar, Inc.

[Tokyo, 22nd, Reuters] – AGC <5201.T> rose for the fifth consecutive day. The stock surged sharply on the 21st after Anges <4563.T> announced during trading hours that it would join a project to jointly develop a novel coronavirus vaccine with Osaka University, and it continued to rise today.The company will join the collaborative framework with Takara Bio <4974.T>, which is responsible for manufacturing, with the aim of strengthening the production of the novel coronavirus DNA vaccine.

Reuters

I believe the company’s strength lies in the fact that it has multiple COVID-19-related production areas—such as partitions to prevent droplet transmission, contract manufacturing of vaccine candidates for other companies, and vaccine development in collaboration with other firms—rather than just one.

Personally, I purchased this stock in early April and, while I’ve taken profits a few times, I still hold some shares.

While striking a balance between taking profits and holding the stock is essential, I think this is a stock with a promising future.

I’m writing this as a personal note after researching AGC, but please note that this is just a collection of thoughts from a non-expert individual, so I am not recommending any investments.

I hope you enjoy reading my personal thoughts.

Thank you for reading to the end♪