Disco (6146.T): Nikkei preview (July 2026): No surprises; current status of SPE makers ahead of results

Research evidence excerpt

Disco (6146.T): Nikkei preview (July 2026): No surprises; current status of SPE makers ahead of results

out earnings are intensifying. Conversely, when positive newsflow is amassing, the shares can

overshoot on the upside to a forward FY (FY2) PER of c50x. Taking the foregoing into account and also referencing the trading

range of peer comparator Disco, we adopt a PER of 45x, the level at which the shares traded when earning growth expectations

were strengthening.

Risks

Downside risks to our target price include 1) a contraction in tester demand as HPC/AI-related test efficiency improves; 2)

increasing competition leading to lower market share and margin deterioration; 3) testers, which are not currently targeted by

restrictions on exports to China, becoming subject to the restrictions; 4) yen appreciation (most testers are sold in dollars); 5)

the market’s focus is concentrated on the launch of new products by industry peers and concerns about the loss of market

share for Advantest-made testers emerges; and 6) the firm continues to procure funds via corporate bonds.

Upside risks include 1) greater-than-expected growth in SoC tester demand on a sustained rise in test intensity; 2) a clear rise

in demand for and profitability of DRAM testers, including for HBM, and other applications; 3) expansion in the system-level

test business exceeding market expectations; 4) further clarity on enhancements to shareholder returns and the importance

being attached to capital efficiency; and 5) yen depreciation.

Tokyo Electron

(8035.T; ¥65100.0; 1; 17 Jul 26; 15:30)

Valuation

Our ¥89,000 target price corresponds to an FY3/29E PER of 35x. TEL's PER has ranged from 10x to 50x over the past 5 years,

and from 15x to 50x over the past 2 years.