Japan IT services and industrial electronics: April-June 2026 results preview

研报英文原文证据摘录

Japan IT services and industrial electronics: April-June 2026 results preview

Viewpoint |

02 Jul 2026 11:26:36 ET │ 15 pages

Japan IT services and industrial

electronics

April-June 2026 results preview

Moriya Koketsu AC

CITI'S TAKE +81-3-6776-8304

moriya.koketsu@citi.com

We present our take on April-June 2026 results, which are scheduled for

release from mid-to-late July. Our sector view has remained largely Masahiro Shibano

unchanged since late January, with share prices continuing to underperform +81-3-6776-4641

TOPIX by c38%. However, we still believe major SIers will maintain an masahiro.shibano@citi.com

important position when companies implement AI. Our Q1 preference

ranking is NRI (4307) → NEC (6701) → Fujitsu (6702).

Share prices — Down 38% YTD, the IT services sector continues to underperform

TOPIX. As frontier AI models and open-source AI models continue to improve,

concerns about AI replacing SIer system development have intensified further. Some

overseas firms like Snowflake in the US have reported positive results, but Accenture

and others reinforced concerns about AI-led business substitution. Accordingly, the

shares of two network integrators, IIJ (3774) and Baudroie (4413), have performed

well. While factors beyond fundamentals appear to be at play, we believe the market

appreciates that network integration work is difficult for AI to replace.

March-May results outlook — We expect March-May results from Baudroie (4413)

and SHIFT (3697) to tally with consensus. SHIFT has an August fiscal year-end,

making this quarter Q3. Attention is thus likely to also focus on FY8/28 comments.

We expect BayCurrent (6532) to announce below-consensus March-May earnings.

However, the market has already priced in an earnings miss, which should limit any