Reiterate Buy: Ample room for margin upside from a better project mix

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Reiterate Buy: Ample room for margin upside from a better project mix

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Taisei Corporation (1801)

Reiterate Buy: Ample room for margin

upside from a better project mix

Reiterate Rating: BUY | PO: 17,000 JPY | Price: 13,375 JPY

13 June 2026

Cut PO to ¥17,000 from ¥20,700; reiterate Buy Equity

We lower Taisei’s PO to ¥17,000 from ¥20,700 but reiterate Buy. We lift FY3/27E EPS

by 4% to ¥1,008 from ¥969, but lower the applied P/E to 16.5x from 21.5x to reflect

greater external uncertainty. We change the valuation base year to FY3/27 from FY3/28, Key Changes

as the market is more focused on near-term earnings. The 16.5x P/E is broadly in line (¥) Previous Current

with the four-peer average and, in our view, looks appropriate, given our forecast of 10% Price Obj. 20,700.00 17,000.00

compound annual EPS growth for FY3/28-FY3/29, excluding gains on securities sale and 2027E Rev (m) 2,296,690.5 2,428,755.1

other such items, in line with peers. Despite the share-price correction, our profit growth 2028E Rev (m) 2,393,493.9 2,525,358.2

scenario driven by both building construction and civil engineering remains unchanged. 2029E Rev (m) NA 2,626,617.7

Raise FY3/27/FY3/28 OP forecasts by 9%/5% 2027E2028E EPSEPS 1,031.50968.75 1,008.431,061.94

We lift FY3/27 operating profit forecast to ¥195.2bn from ¥179.6bn (+8.7%, consensus 2029E EPS NA 1,143.42

at ¥189.1bn), and our FY3/28 forecast to ¥215.1bn from ¥204.9bn (+5.0%, consensus at 2027E Op. Profit (m) 179,630.1 195,188.5

¥208.1bn), driven mainly by higher non-consolidated building sales. Gross profit margin

forecasts are broadly unchanged at 12.2% for FY3/27 and 13.2% for FY3/28, with Takumi Kasai >>

additional works and a solid project mix supporting margins. We lift FY3/29 operating Research Analyst