Reiterating Buy rating on recognition of longer-term overseas growth potential

Research evidence excerpt

Reiterating Buy rating on recognition of longer-term overseas growth potential

hanges to our forecasts, we now factor in: 1) a slight upward revision

to our overseas sales forecasts for FY5/29 onward; 2) an increase in R&D

and other costs in FY5/27; and 3) subsidy income pushed back from FY5/26.

(See page 2 for more.)

WATCH: FY5/27 guidance, new growth strategy, domestic/overseas

order outlook

When the company announces 4Q results in mid-July, we will be focusing

on the possibility that FY5/27 guidance will call for a swing to profitability at

the operating level, as well as the new growth strategy that is currently being

drafted. While it is unclear what the new growth strategy will contain, we thinkAnalyst Kennosuke Fujishiro

+81 3 6202 8262 kennosuke.fujishiro@mizuho-sc.com the share price would react positively if the plan makes overseas expansion

Senior Analyst Yusuke Hori more predictable. We are optimistic about the September contract with the+81 3 6202 8418 yusuke.hori@mizuho-sc.com

Ministry of Defense’s Defense Intelligence Headquarters, the possibility of an

Click here for ESG on image data tender from the Ministry of Land, Infrastructure, Transport and

our entire coverage Tourism, and partnerships with overseas companies.

MEASURE: Applying PER of about 17x to our FY5/29 EPS forecast

Our new price objective (¥3,200) is based on our FY5/29 EPS estimate and

a PER of about 17x (previously 15x). In light of space-related companies’

rising valuations, we set our valuation base year as FY5/29, when satellite

sales for the Ministry of Defense’s satellite constellation project are expected

to peak. (See page 2 for more.)

Consolidated results and forecasts Share Price: ¥2,792 (12 Jun) 52wks: H ¥4,485 L ¥1,532

Term Sales YoY OP YoY RP YoY NP YoY EPS PER EV/EBITDA