ULVAC (6728): Cut PO: Non-advanced contraction, but mix drives earnings growth; reiterate Buy

Research evidence excerpt

ULVAC (6728): Cut PO: Non-advanced contraction, but mix drives earnings growth; reiterate Buy

Japan – Semiconductors/Tech Hardware/ Software & IT Svc Coverage Cluster

Investment rating Company BofA Ticker Bloomberg symbol Analyst

TDK TTDKF 6762 JP Masashi Kubota

Tokyo Electron TOELF 8035 JP Mikio Hirakawa

Tokyo Seimitsu TMIUF 7729 JP Mayako Ouchi

ULVAC ULVAF 6728 JP Mayako Ouchi

NEUTRAL

BIPROGY NTULF 8056 JP Hideaki Tanaka

Iriso Electronics IREEF 6908 JP Hazel Xue

Nikon NINOF 7731 JP Mayako Ouchi

SCREEN Holdings DINRF 7735 JP Mikio Hirakawa

TIS TISNF 3626 JP Hideaki Tanaka

Trend Micro TMICF 4704 JP Hideaki Tanaka

UNDERPERFORM

Alps Alpine APELF 6770 JP Masashi Kubota

Alps Alpine APELY APELY US Masashi Kubota

Anritsu AITUF 6754 JP Mikio Hirakawa

Fuji Electric FELTF 6504 JP Mikio Hirakawa

Hirose Electric HRSEF 6806 JP Masashi Kubota

Japan Aviation JPAVF 6807 JP Masashi Kubota

Kyocera KYOCF 6971 JP Masashi Kubota

Kyocera KYOCY KYOCY US Masashi Kubota

Mabuchi Motor MBUMF 6592 JP Masashi Kubota

NS Solutions NSSXF 2327 JP Hideaki Tanaka

Otsuka Corp OSUKF 4768 JP Hideaki Tanaka

Sharp SHCAF 6753 JP Mikio Hirakawa

Taiyo Yuden TYOYF 6976 JP Masashi Kubota

RSTR

Rigaku Corporation RGAKF 268A JP Mikio Hirakawa

RVW

Nidec NNDNF 6594 JP Masashi Kubota

NIDEC NJDCY NJDCY US Masashi Kubota

iQmethod SM Measures Definitions

Business Performance Numerator Denominator

Return On Capital Employed NOPAT = (EBIT + Interest Income) × (1 − Tax Rate) + Goodwill Amortization Total Assets − Current Liabilities + ST Debt + Accumulated Goodwill

Amortization

Return On Equity Net Income Shareholders’ Equity

Operating Margin Operating Profit Sales

Earnings Growth Expected 5 Year CAGR From Latest Actual N/A

Free Cash Flow Cash Flow From Operations − Total Capex N/A

Quality of Earnings Numerator Denominator