Tokyo Keiki (7721.T): Initiating coverage at Buy; earnings upside from expanding domestic/overseas defense demand not yet priced in

研报英文原文证据摘录

Tokyo Keiki (7721.T): Initiating coverage at Buy; earnings upside from expanding domestic/overseas defense demand not yet priced in

Goldman Sachs Tokyo Keiki (7721.T)

Marine systems: Increase in the number of operating vessels globally acts as a driver

Business overview (21% of FY3/27E operating profits): Global share

60%

Tokyo Keiki supplies global shipbuilders and shipping companies (including Japanese)

with autopilots for automatic steering, gyrocompasses, and ECDIS for displaying nautical

chart information. It holds a high global market share of over 60% in autopilots and

gyrocompasses (as of FY3/26; company estimates). Competitors include YDK

Technologies, in which Imabari Shipbuilding is a major shareholder. The segment’s sales

are evenly split between products for new ships (to shipbuilders) and maintenance

services/replacements (to shipping companies). Because mainstay gyrocompasses

require maintenance once every three years, the sales weighting of after-sales services

is high, providing stable revenues.

Global shipbuilding: Replacement needs for aging vessels drive total

demand over medium to long term

In 2025, global new shipbuilding order volume came to 57.1 mn CGT, which, despite a

yoy decrease of 21% amid uncertain tariff policies, was a high level compared to the

past 15-year range (16.5 mn CGT to 78.1 mn CGT). We forecast new shipbuilding

demand at or above this level over 2025-2032, and assume the breakdown of global

total order volume (excluding defense-related) will be: (1) 48% from growth in

replacement demand for aging vessels, (2) 28% from the expansion of global trade

volume, and (3) the remaining 24% from growth in demand for alternative

fuel-compatible vessels due to tightening emission regulations. We expect (1)