Feedback from Visits to Investors in Asia (Singapore and Hong Kong)

Research evidence excerpt

Feedback from Visits to Investors in Asia (Singapore and Hong Kong)

UpdateMM&A benefits from Sumitomo Mitsui Construction and Swing, gains related to Toshiba,

and the possibility of an upward earnings revision in 1Q. Interest in Penta-Ocean reflected

expectations for continued earnings strength and attractive valuation, while Kumagai

Gumi was viewed favorably from a risk-reward perspective given its inexpensive valuation

and expected substantial 1Q profit growth.

Electrical engineering and HVAC: Interest was relatively higher for electrical engineering,

but compared with our previous visit (Apr), we also sense rising interest in HVAC. In

electrical engineering, because companies’ P/E multiples look inexpensive, there was

strong interest in all major names including Kandenko, Kinden, and Kraftia (interest was

particularly high in Kandenko). Looking ahead to 1Q results, investor focus appears

particularly high on Kinden, as it is expected to be the first company in the group to

announce results. We believe interest in HVAC is rising as it now appears inexpensive on a

P/E basis.

Other names (telecom engineering, special civil engineering): There were almost no

questions on special civil engineering (Sho-Bond HD, Raito Kogyo). We received questions

on telecom engineering (COMSYS Holdings, EXEO Group), but interest seemed lower

than during our previous visit (Apr). We believe interest has declined because, relative to

other subcontractors, electrical engineering and HVAC are viewed as offering investment

appeal given their inexpensive P/E valuations, and weakening mobile-related order

momentum could make P/E expansion difficult. We also note that mobile monthly orders

at COMSYS Holdings have been running at elevated levels since Aug 2025, which, in our