Hirose Electric "Lifting our price target on a recovery in industrial machinery"

研报英文原文证据摘录

Hirose Electric "Lifting our price target on a recovery in industrial machinery"

,055.7 1,297.6 23 1,285.2

forecasts for industrial machinery connectors by 21%/29%/19%, as well as for

03/29E 1,200.9 1,390.1 16 1,524.9

communications infrastructure applications, and factored in the effect of the new

consolidation of SER (¥7.0bn on FY3/27 sales). We forecast Q1 (April-June) OP at Shingo Hirata, CFA

¥12.8bn, 6% above consensus. The main factor behind the variance was strong sales, Analyst

particularly in industrial machinery connectors. shingo.hirata@ubs.com

+81-3-5208 6224

Key points at the results briefing

The company is scheduled to announce Q1 results after market close on 4 August and

hold a results briefing at 10:45 am the following day. The share of AI-related orders in

total orders was limited to less than 2% as of Q4 (January-March). We presume that the

competitive environment is intense, given the dominant industry positions of major US

companies. Upside risk is expansion of the customer base. In addition, at the time of full-

year results announcement, management expected a price hike effect of around ¥3bn in

FY3/27 (assuming a -¥8bn impact from higher raw material costs), and we are focusing

on whether there are any changes to this outlook. We believe it will be difficult to pass

on costs to product prices because customers, including smartphone manufacturers, are

facing sharp hikes in memory prices.

Valuation: Reiterate Neutral; lifting our price target from ¥19,000 to ¥31,100

We are shifting the base year for our price target from FY3/27 to FY3/28 and are using a

PER of 24X, up from 20X, reflecting rising sector multiples. Our target multiple is

1SD higher than the historical average.

Highlights (¥b) 03/24 03/25 03/26 03/27E 03/28E 03/29E 03/30E 03/31E