External uncertainties remain amid lack of visible growth drivers

Research evidence excerpt

External uncertainties remain amid lack of visible growth drivers

2/26E Pretax basis) 7.4 currency basis, our FY12/26 OP forecast is now roughly ¥60.0b lower than

Note: No. of shares includes treasury stock before. The revisions mainly reflect: 1) the impact of a sharper-than-expected

Absolute and TOPIX-relative share price rise in memory prices (we assume a slightly larger drag than that factored

into guidance [-¥63.4b]); (More on page 2)

WATCH: Memory procurement, changes under new leadership, new

businesses, shareholder returns, M&A

Our focus is on the following. 1) Memory: When reporting 1Q results, the

company explained that it has secured 96% of the required volume for

FY12/26, but we recognize that there is a risk of additional downward

pressure on prices (and on volumes, depending on the outcome of

subsequent negotiations). We do not expect the issue of tight memory supply

to be resolved in 2027 and therefore caution that the impact could beSenior Analyst Kenichi Saita

+81 3 6202 8145 kenichi.saita@mizuho-sc.com prolonged. We are also eyeing the timing for the shift to DDR5. Other point

Senior Analyst Yasuo Nakane of focus include: 2) pricing strategy; (More on page 2)+81 3 6202 8124 yasuo.nakane@mizuho-sc.com

MEASURE: Valuation still based on dividend yield

Click here for ESG on Our price objective is based on our FY12/26 DPS forecast of ¥160, in line

our entire coverage with company guidance, and a dividend yield of 3.75% (previously 3.5%). We

raise our target yield to reflect the rise in long-term interest rates in Japan.

Our price objective translates to a total return yield of around 9.3%, assuming

¥200b in annual share buybacks.

Consolidated results and forecasts Share Price: ¥4,147 (30 Jun) 52wks: H ¥5,033 L ¥3,956