Core business undervalued, raising to Buy

研报英文原文证据摘录

Core business undervalued, raising to Buy

basic) (¥)

FY3/29. These forecasts are 5%/25%/5% above the consensus. For FY3/27, we are

From To % ch Cons.

raising our sales forecast by 6%, reflecting a cyclical recovery in AI servers and 03/27E 108.2 92.5 -15 86.5

automotive/industrial equipment, but incorporating the impact of lower utilisation due 03/28E 129.5 159.6 23 133.7

to inventory optimisation and rising gold prices. Meanwhile, for FY3/28 and FY3/29, we 03/29E 137.0 184.0 34 182.9

are raising our sales forecasts by 6%/7%, reflecting benefits from expanding sales for AI

servers, and raising our OP forecasts based on price hike effects, improved SiC earnings, Shingo Hirata, CFA

and structural reforms. Our Q1 (April-June) OP forecast is ¥6.7bn, slightly above the Analyst

shingo.hirata@ubs.com

consensus by 3%. Although we forecast strong growth in Q1 sales (+21% qoq), we

+81-3-5208 6224

assume lower utilisation due to reductions to inventory.

Kohei Takahashi

Focus on AI server upside, Toshiba’s earnings, and three-company merger Analyst

kohei.takahashi@ubs.com

In May this year, Rohm raised its AI-related sales target for FY3/31 to ¥100bn, up +81-3-5208 6172

significantly from its previous target of ¥30bn. While it is a late entrant in AI servers,

business opportunities are growing, supported by its strong relationships with

Taiwanese power supply manufacturers and SiC, for which demand is expected to

increase as 800V HVDC adoption advances. Management has already pointed to upside

risk in its medium-term target, and we believe it is likely to revise up the target soon.

Regarding Toshiba, in which Rohm holds ¥100bn in common shares, Bloomberg

reported in March that interest-bearing debt would be consolidated into ¥750bn in

bank borrowings (link, Japanese only).