Kyoritsu Maintenance: F3/26 4Q Results: We Lower Our Forecasts Factoring in Macro Deterioration Risks

Research evidence excerpt

Kyoritsu Maintenance: F3/26 4Q Results: We Lower Our Forecasts Factoring in Macro Deterioration Risks

UpdateM

RiskRisk RewardReward– Kyoritsu- KyoritsuMaintenance Maintenance(9616.T) (9616.T)

Bad news has already been priced in; risk-reward profile is attractive

PRICE TARGET ¥3,220 OVERWEIGHT THESIS

Our Base case is founded on EV/EBIDTA of 12.5x on our F3/27 earnings forecast, and ▪The current share price has corrected to a

considers the correlation between RevPAR growth rates and EV/EBITDA multiples since 2015. level consistent with our bear-case scenario,

F3/27e OP ¥23.7bn. and we believe that a substantial amount of

negative factors has already been priced in. ¥3,795 ▪Stock price has not fully discounted theConsensus Price Target Distribution ¥2,650.00 ¥4,800.00 OP growth forecasts driven by hotel MS PT

business (Dormy Inn and resort hotels).Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

Consensus Rating Distribution

RISK REWARD CHART 88% Overweight

13% Equal-weight

JPY ¥4,300¥4,300(+81.97%)¥4,300(+81.97%)(+81.97%) 0% Underweight

MS Rating

4000 Source: Refinitiv, Morgan Stanley Research

¥3,220¥3,220(+36.27%)¥3,220(+36.27%)(+36.27%) Risk Reward Themes 3000

Pricing Power: Positive

¥2,363¥2,363¥2,363 Self-help: Positive

2000 ¥2,300¥2,300(-2.67%)¥2,300(-2.67%)(-2.67%) View descriptions of Risk Rewards Themes here

MAY '25 NOV '25 MAY '26 MAY '27

Key: Historical Stock Performance Current Stock Price Price Target

Source: Refinitiv, Morgan Stanley Research

BULL CASE ¥4,300 BASE CASE ¥3,220 BEAR CASE ¥2,300

EV/EBIDTA of 14.5x on our F3/27e EV/EBIDTA of 12.5x on our F3/27e EV/EBIDTA of 11x on our F3/27e

Our Bull case assumes stronger ADR Our Base case is based on EV/EBIDTA of Our Bear case assumes weaker ADR (Dormy

(Dormy Inn + resort hotels) vs.