IT & Software / Internet & Media: Marketing Feedback/Investment Themes: Expectations on Recruit Re-rating in Internet & Media; In IT Services, Focus on Near-term Earnings Momentum at 3 Majors

Research evidence excerpt

IT & Software / Internet & Media: Marketing Feedback/Investment Themes: Expectations on Recruit Re-rating in Internet & Media; In IT Services, Focus on Near-term Earnings Momentum at 3 Majors

IdeaMCurrent-year guidance looks conservative relative to an ambitious mid-term plan;

absent risk materialization, upside revision potential is large and momentum is strong:

NEC’s mid-term plan looks ambitious on profit growth, while its sales growth assumptions

appear conservative to realistic. Both IT services and social infrastructure should drive

profit growth. Relative to the ambitious mid-term plan, current-year guidance looks

conservative, already factoring in component supply and geopolitical risks. If these risks

do not materialize, guidance could be revised up. The additional contribution from CSG

joining the group should also provide a technical boost, leaving short-term earnings

momentum relatively strong.

Fujitsu (6702): OW, PT ¥4,000

Continued margin improvement looks realistic through AI-driven development; the

sovereign AI growth story may take time for the market to understand, while current-

year guidance also includes conservative elements: Fujitsu’s mid-term plan is framed as

a 10-year plan, but its EPS growth and margin improvement targets are clear and

ambitious. The key issue is achievability. Margin improvement has already been

demonstrated, and deeper use of AI-driven development should contribute to profit

growth. Over the mid term, Fujitsu could become a core player in sovereign AI through

the combination of IT and sovereign technology, but the market may need time to

understand its growth strategy, including semiconductors and quantum computing.

Current-year guidance includes conservative assumptions for hardware-related businesses,