Updating Forecasts: Stainless for SPE, Free-Forgings Drive Earnings Growth

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Updating Forecasts: Stainless for SPE, Free-Forgings Drive Earnings Growth

Japan | Japanese Steel Producers

Daido Steel EquityJulyResearch8, 2026

TARGET | ESTIMATE CHANGEUpdating Forecasts: Stainless for SPE, Free-

RATING HOLDForgings Drive Earnings Growth

PRICE ¥2,632^

We revise our earnings forecasts for Daido Steel. Orders for stainless

steel towards SPEs is rising rapidly above FY3/27 company guidance. As PRICE TARGET | % TO PT ¥2,480 (¥2,000) | -6%

margins on these products are extremely high, we'd expect earnings to 52W HIGH-LOW ¥3,005 - ¥992

fare above forecasts. On the other hand, specialty steel volumes for the FLOAT (%) | ADV MM (USD) 58.9% | 4,139.96

automotive markets and forgings for oil & gas drilling remain subdued. MARKET CAP ¥524.3B | $3.2B

CAPEX should peak this FY & we don't expect meaningful boost in TICKER 5471 JP ^Prior trading day's closing price unless otherwise

shareholder returns. Raise PT, remain Hold. noted.

Stainless steel for semiconductor production equipment (SPE): The company’s high- FY (Mar) CHANGE TO JEFe JEF vs CONS

cleanliness stainless steel for SPE (CLEANSTAR) offers excellent corrosion resistance and is 2026 2027 2026 2027

available in three grades tailored to applications and required properties. It is mainly used in REV NA NA NA NA

front-end equipment (thin film formation, etching), including valves, fittings, MFCs (Mass Flow

EPS +14% +10% +9% -1%

Controllers), metal gas filters, and gas supply pipes. A new material with improved corrosion

resistance and processability is under development, with launch scheduled for FY3/27. With

2026 (¥) Q1 Q2 Q3 Q4 FY3

high entry barriers, it is expected to support further market share expansion. The company’s

EPS -- -- -- -- 168.50