Mitsubishi Heavy Industries (7011.T): Nikkei reports ¥100 bn+ GTCC investment and doubling capacity; consistent with existing policy; Buy

Research evidence excerpt

Mitsubishi Heavy Industries (7011.T): Nikkei reports ¥100 bn+ GTCC investment and doubling capacity; consistent with existing policy; Buy

Goldman Sachs Mitsubishi Heavy Industries (7011.T)

deliver structurally higher profit growth relative to the sector, both in the near and

long term, and we maintain our Buy rating.

Exhibit 1: MHI: Capex and depreciation trend Exhibit 2: MHI: Revenue, segment profit and profit margin

(GTCC-inclusive segment) trend (GTCC-inclusive segment)

(JPY mn) CapEx Depreciation (JPY mn) Revenue Segment profit Profit margin (rhs)

100,000 3,000,000 25%

80,000 20%

2,000,000

60,000 15%

40,000

10%

1,000,000

20,000

5%

0 0% 3/2006 3/2007 3/2008 3/2009 3/2010 3/2011 3/2012 3/2013 3/2014 3/2015 3/2016 3/2017 3/2018 3/2019 3/2020 3/2021 3/2022 3/2023 3/2024 3/2025 3/2026 CoE

3/2027 3/2001 3/2002 3/2003 3/2004 3/2005 3/2006 3/2007 3/2008 3/2009 3/2010 3/2011 3/2012 3/2013 3/2014 3/2015 3/2016 3/2017 3/2018 3/2019 3/2020 3/2021 3/2022 3/2023 3/2024 3/2025 3/2026 3/2027E 3/2028E 3/2029E 3/2030E

Historical figures reflect the segment classification in effect at the time. The Historical figures reflect the segment classification in effect at the time. The

GTCC business, previously reported under the Power Systems segment or the GTCC business, previously reported under the Power Systems segment or the

Energy & Environment segment, is now included in the Energy Systems Energy & Environment segment, is now included in the Energy Systems

segment. segment.

Source: Company data, Data compiled by Goldman Sachs Global Investment Source: Company data, Goldman Sachs Global Investment Research

Research

Price Target Risks and Methodology - Mitsubishi Heavy Industries (7011.T)

We are Buy rated on Mitsubishi Heavy Industries with a 12-month target price of ¥6,000.