Medalist BTS also rode… Bike world Intel runs Shimano in Japan

Tokyo Olympic cycle gold Richard Karapaz (left) and BTS member Jin.

The two athletes who won gold medals in the road and mountain bike (MTB) categories at the Tokyo Olympics last year have something in common. It is said that he rode a bicycle equipped with parts from Japanese company Shimano (7309). From road bikes to mountain bikes, 80% of bikes worldwide use Shimano parts. Just as Intel’s central processing unit (CPU) was included in most computers in the past, most bicycles contain Shimano parts, giving it the nickname ‘the Intel of the bicycle world’.

Shimano’s unrivaled market share made record-high profits last year. The share price also responded to this, and has doubled since the low of the corona virus. The stock price recently showed a lull amid growing concerns over a slowdown in earnings following the beneficiary of the corona virus ended, but it rebounded once more on the announcement of better-than-expected earnings.

I thought the benefits were over, but it was a ‘surprise’

Shimano finished trading at 28,250 yen at the Tokyo Stock Exchange on the 15th. It has more than doubled from the low (12,930 yen) recorded following the outbreak of Corona 19. As the perception that bicycles are a leisure activity to avoid infection with COVID-19 spreads, Shimano’s stock price reached all-time highs every day until September of last year. However, the stock price recently peaked at 35,550 yen (September last year) and showed a lull in the past amid doubts as to whether the company will be able to maintain the same earnings even following the corona virus is over.

Shimano’s stock price soared 17% on the 9th. The reason was the performance that exceeded expectations. Shimano announced on the 8th that it is estimated that last year’s operating profit reached 148.3 billion yen, a new record high. In addition, it announced that it would raise the price of transmissions for high-end bicycles by 5%. Shimano, which raised its selling price in addition to its good performance, had no choice but to stand out.

Driving innovation in bicycle parts

Founded in 1921, Shimano was an ordinary original equipment manufacturer (OEM) until 1972. Shimano started the branding thinking that high-end bicycles would become popular in the future. In 1973, a component-type part named ‘Dura-ace’ was the beginning. Until then, bicycles were made by assembling parts from different companies, such as gearboxes and chains. In this way, no matter how good Shimano made the transmission, it did not produce the best results with a bad chain. Therefore, Shimano introduced the world’s first component method that bundles and sells parts such as transmission and chain at once. In this way, Shimano was able to enjoy the effect of monopolizing a large part of bicycle parts.

Bicycle parts maker Shimano’s ‘wheels’

Even following that, he did not neglect product development in the eyes of users. A typical example is transmission innovation. When you change gears on the bike, you can feel a ‘tick’ at your fingertips. Shimano first introduced this sense in 1984. Until then, bicycle shifting relied on sense. As a result, mistakes in shifting gears were frequently made when the players were tired at the end of the race.

Shimano solved this problem by adding a touch of fingertips. In 1990, the idea of ​​putting the transmission near the handle was also changed. In the past, gearbox levers were usually attached to the frame above the wheel of a bicycle.

irreplaceable bicycle parts

Innovating over innovation, Shimano has become an irreplaceable parts company. From Olympic medalists to BTS’ RM and Jin’s bikes, over 80% of bikes around the world are equipped with Shimano parts. The market is also optimistic regarding Shimano’s future performance. The basis for the optimism in performance is the electric assist, which is in the midst of development. The electric assist is a motor attached to the bicycle, and the motor adds power even when the pedal is lightly pressed. With this motor, even the elderly and weak can enjoy the bike comfortably. It is estimated that sales of this component last year increased by 45% compared to the previous year.

Shimano’s earnings this year are also believed to have reached an all-time high. According to Shimano, this year’s sales are 580 billion yen, up 6.1% from the previous year, and operating profit is 161 billion yen, up 8.6%.

Takahiro Mori, a senior analyst at Mizuho Securities, said, “The market predicted that this year’s operating profit would be lower than the previous year due to concerns that demand would decrease due to the coronavirus. It will improve.”

Reporter Seulgi Lee [email protected]