Harmonic Drive Systems: Investor Feedback

Research evidence excerpt

Harmonic Drive Systems: Investor Feedback

Japan | Machinery

Harmonic Drive Systems EquityJuneResearch23, 2026

FLASH NOTEInvestor Feedback

We have seen increasing interest in Harmonic Drive Systems. Investors RATING BUY

are focused on the stock's valuation, humanoid-related orders, and market PRICE ¥7,700^

competition. We believe HDS's established position will enjoy increasing PRICE TARGET | % TO PT ¥10,000 | +30%

orders from aerospace/defense industry which should lead to potential 52W HIGH-LOW ¥8,870 - ¥2,316

upside to the earnings consensus estimates. We see the June 23rd pullback FLOAT (%) | ADV MM (USD) 61.3% | 98.58

in share price offering a more appealing buying opportunity ahead of the MARKET CAP ¥728.9B | $4.5B

coming quarterly results. TICKER 6324 JP

^Prior trading day's closing price unless otherwise

noted.

Market sentiment: Harmonic Drive Systems ('HDS') has outperformed the TOPIX by 24% in

the past week. Japanese government's announcement of strategic spending on Physical AI

(memo; 19 June) amplified the magnitude of share price hike. Following our upgrade report

(link; 16 June), we have received multiple inquires on our latest view on HDS from overseas

investors based in Asia, Europe, and the US. Until roughly two years ago, inquiries on HDS came

mostly from investors based in Asia. This implies a likelihood of a broadening investor group

for HDS.

Investor feedback & our view: Discussion points on HDS thus far have been focused on the

stock's valuation, new orders from industrial robot (mainly collaborative robots) and humanoid

makers, and competitive landscape.

HDS has historically been traded at a premium to other Japanese factory automation sector

stocks, considering its dominating market share in small-size precision reduction gear industry