Rohm (6963): Set rating to Underperform: Time required for full earnings recovery including SiC

Research evidence excerpt

Rohm (6963): Set rating to Underperform: Time required for full earnings recovery including SiC

Accessible version

Rohm (6963)

Set rating to Underperform: Time required

for full earnings recovery including SiC

Rating Change: UNDERPERFORM | PO: 3,900 JPY | Price: 5,078 JPY

28 May 2026

Establish rating at Underperform, PO ¥3,900 Equity

We revise our investment opinion on Rohm to Underperform from No Rating and set a

price objective (PO) of ¥3,900 following Denso’s withdrawal of the takeover bid (TOB).

Our PO is based on EV/EBITDA of 6x our FY3/28 estimate, in line with the past 10-year Key Changes

average. In calculating the assumed EV, we factor in the potential for future value

(¥) Previous Current

expansion of the ¥100bn limited partner (LP) investment in Toshiba, as well as the

indirect stake in Kioxia through Toshiba. We add ¥2,500 from the Toshiba investment to Inv. Opinion -6- C-3-7

Rohm’s fair value of ¥1,400, which is derived from an EV/EBITDA of 6x. Inv. Rating NO RATING UNDERPERFORM

Price Obj. NA 3,900

2027E Rev (m) 512,500 512,700Current share price appears driven by expectations

Key investment theses are (1) a sense of overvaluation in the current share price, which 2028E Rev (m) 540,100 539,500

strongly reflects potential returns from the LP investment in Toshiba; (2) delays in the 2029E Rev (m) NA 572,100

pace of profitability improvement in the silicon carbide (SiC) device business; and (3) 2027E EPS 53.78 64.96

uncertainty over the outlook for restructuring in the domestic power semiconductor 2028E EPS 87.73 106.48

market. Rohm aims to improve earnings primarily through fixed-cost reductions, 2029E EPS NA 139.63

including impairment of low-utilization production lines, but we do not expect earnings 2027E EBITDA (m) 91,218 74,635