Earnings still slowing, but steady improvement in real terms; focus on details

研报英文原文证据摘录

Earnings still slowing, but steady improvement in real terms; focus on details

with high growth kicking in from FY3/30 onward. While we expect

underlying OP across all businesses to improve, we look for profits in the

Russia business to decline through FY3/28 on an uptick in depreciation costs,

raw material costs, and personnel costs, which we think is the reason for

the gap between our forecasts and FY3/27 guidance. As part of the growth

investments mentioned above, the company plans to invest in developing

common modules for printers in FY3/27, and this is expected to push down

OP in the Japan business by ¥1.0b.

WATCH: Potential for discontinuous growth

Sato plans to make strategic investments of ¥15b–¥20b over the four-Analyst Yosuke Saika

+81 3 6202 8549 yosuke.saika@mizuho-sc.com year period of FY3/26–FY3/29. Investment targets include R&D aimed at

commercializing the “perfect and unique tagging” (PUT) concept outlined in

Click here for ESG on its 2030 Vision, M&A, capital investment, and partnership opportunities. We

our entire coverage will be keeping an eye on the growth potential of the company’s business

domains of focus from these efforts. FY3/26 sales for these three business

domains combined were only ¥1.4b, but the company aims to boost sales

to ¥22.0b in FY3/29 (OP of ¥2.3b) and ¥35.0b in FY3/31 through M&A,

investments, and entering partnerships. (See page 2 for more.)

MEASURE: PER of 12x our FY3/27 EPS estimate

As before, our price objective is based on a PER of about 12x on our FY3/27

EPS estimate. The target multiple references the average of the PER range

(roughly 9x–17x) at which the shares have traded since Russia’s invasion of

Ukraine.

Consolidated results and forecasts Share Price: ¥2,467 (21 Jul) 52wks: H ¥2,565 L ¥2,053