Japan's Tsugami Precision Machine Tool's orders from China are rapidly decreasing

According to Nishijima Naosheng, president of Tsugami, a Japanese precision machine tool manufacturer, recently 'orders from China have decreased rapidly and will not recover until November at the earliest.' China's demand for machine tools for processing smartphone parts has come to an end. In addition, the number of orders from the automotive industry is also sluggish. Since receiving a large order for smartphones from China in December last year, the number of orders received by Tsugami has grown sharply, reaching 6.4 billion yen in March this year, a record high for single-month orders. However, from July, smartphone-related orders began to decline sharply, and only 1.9 billion yen in August. Orders other than smartphones also continued to be sluggish, and Nishijima said, 'It will be roughly 2.5 billion to 3 billion yen from September to October.' The order amount will be reflected in the revenue in about 2 months. Due to the surge in the number of orders before June, Tsugami's consolidated operating profit from April to September 2012 increased by 3.4 times year-on-year to 4.8 billion yen, '20-30% higher than the initial expectation.' But Nishishima acknowledged that earnings in the second half of the fiscal year are highly likely to decline. Tsugami has a market share of about 60% in China in the field of mobile-spindle automatic lathes. Nishijima said 'orders in all industries continue to be sluggish' in China, including autos and electronic components. Regarding the order recovery period, Nishijima predicted that 'it will rebound in November to December when it is expected to receive new orders related to smartphones.'