Special Civil Engineering: Mild Profit Growth, Less Earnings Upside vs General and Electrical/HVAC Contractors Still Dampen Appeal

研报英文原文证据摘录

Special Civil Engineering: Mild Profit Growth, Less Earnings Upside vs General and Electrical/HVAC Contractors Still Dampen Appeal

Idea

June 24, 2026 07:56 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MConstruction | Japan Ryo Yagi

Equity Analyst

Special Civil Engineering: Mild Ryo.Yagi@morganstanleymufg.com +81 3 6836-8938

Profit Growth, Less Earnings

Upside vs General and Construction

Japan

Industry View AttractiveElectrical/HVAC Contractors

What’s Changed

Raito Kogyo (1926.T) From ToStill Dampen Appeal Price Target ¥3,050 ¥3,400

Expect limitations on execution capacity to keep profit growth

based on workforce expansion mild at both Sho-Bond & Raito

Kogyo, less well positioned for earnings overshoots than general

or electrical/HVAC engineering contractors.

Key Takeaways

Roadworks, infrastructure repairs and reinforcement works are contributing to

CE demand, but limited execution capacity is holding down profit growth.

3yr OP CAGR forecasts: Raito +1.7% from F3/28, Sho-Bond +2.5% from F6/26.

Slower growth for Raito mainly reflects expected OP fall in F3/27 as

contributions from big Raito Inc projects drop out.

Expect fewer prospects of strong earnings upside than general or electrical/

HVAC engineering contractors to keep defensive names less popular.

Raito Kogyo: Not undervalued with earnings and increased shareholder return

expectations priced in (P/E 13.7x on our F3/27e at Jun 23 close). Both parent and

subsidiary earnings are firmer than we foresaw, with healthy CE orders and bigger-

than-expected contributions from add-on works/design changes yielding solid parent

margins. But we see the end of big Raito Inc projects as a YoY profit negative in

F3/27, and execution capacity constraints keeping OP growth mild from F3/28 (3yr

CAGR +1.7%).