Nisshinbo Holdings: We keep our Buy rating, hike our target price from ¥2,900 to ¥3,700

研报英文原文证据摘录

Nisshinbo Holdings: We keep our Buy rating, hike our target price from ¥2,900 to ¥3,700

Global Markets Research

29 June 2026Nisshinbo Holdings

3105.T 3105 JP / EQUITY: JAPAN INDUSTRIAL ELECTRONICS

RatingWe keep our Buy rating, hike our target price from

Remains Buy¥2,900 to ¥3,700

Target price

Increased from 2,900 JPY 3,700Substantial potential for high-power microwave systems

Closing price JPY 2,457.0We keep our Buy rating, still expect margins and ROE to improve 26 June 2026

We raise our target price for Nisshinbo Holdings from ¥2,900 to ¥3,700. We fine-tune our

Implied upside +50.6%26/12 operating profit forecast from ¥36.2bn (up 37% y-y, operating margin of 6.9%) to

¥36.4bn (up 38%, 7.0%). Our target price is based on our end-27/12 BPS forecast of

¥2,042 (previously ¥2,037) and a P/B of 1.8x (previously 1.4x), referencing P/B and ROE

for defense companies, and corresponds to a P/E of 19x (previously 15x). We expect

Relative performance chartmargins and ROE to continue to improve as a result of structural reforms, and maintain

our view that the company's high-power microwave (HPM) business is an area with

substantial growth potential. We still forecast operating losses in 26/12 Q2 for seasonal

reasons, and while we expect the company to book extraordinary losses of around ¥6bn

related to the structural reforms in the microdevices business that it announced in

December 2025, we think this has already been factored into consensus forecasts.

HPM-related products look to have considerable potential

R&D into HPM is moving forward in many countries as an effective means of countering

drone saturation attacks. In the US, Epirus and Raytheon are developing HPM systems.

Epirus's Leonidas system is priced at over ¥2bn per unit, suggesting that such systems