27/3 Q1 results: We raise our forecasts and target price

Research evidence excerpt

27/3 Q1 results: We raise our forecasts and target price

s business

In Q1, sales rose 9.9% y-y to ¥525.4bn and operating profits came in at ¥49.1bn, or 2.6x the prior-year

level (our pre-release forecasts: ¥525.0bn, ¥36.0bn). One-time factors include gains of around ¥3.0bn on

the sale of land at the electronic components segment and rush demand ahead of price hikes at the

industrial tools business. If we exclude the industrial tools business, the outperformance in profits versus Source: LSEG, Nomura

our forecasts is mainly attributable to the solutions segment, where profits at the communications business Performance / Stock price data

(mobile phone shipments are skewed towards Q1 due to customer circumstances), the other business (%) 1M 3M 12M

(product mix improvements), and the document solutions business (strong sales) were a combined ¥5.5bn Absolute returns -0.3 31.0 115.8

higher than we expected. When excluding gains on the sale of land, profits at the electronic components Relative to 2.8 24.6 76.7

Russell/Nomura Large

segment undershot our forecast by around ¥2.0bn. Connectors and crystals look to have performed Cap

weakly. In Q1, the B/B ratios for the electronic components segment and industrial & automotive Market capitalization (¥bn) 5,037.8

components business were high at 1.20x and 1.16x, respectively, providing evidence of strong demand. 52-week low stock price (¥) 1,764

There were strong orders for MLCCs and tantalum capacitors for AI servers at the electronic components 52-week high stock price (¥) 4,019

segment and for fine ceramic parts for SPE at the industrial & automotive components business. Among AI Shares outstanding (mn) 1,419.1

Daily turnover (3-M avg) (¥mn) 25,283.1

server applications, the company is planning major investments in MLCCs.