Taikisha: 1979.T / 1979.P / EQUITY / JAPAN CONSTRUCTION

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Taikisha: 1979.T / 1979.P / EQUITY / JAPAN CONSTRUCTION

Global Markets Research

10 July 2026Taikisha

1979.T 1979 JP / EQUITY: JAPAN CONSTRUCTION

RatingWe raise forecasts to reflect higher orders, better

Remains Neutralmargins

Target price

Company focusing on high value-added projects, we expect overseas Increased from 4,040 JPY 4,850

margins to improve

Closing price JPY 4,650We raise forecasts, retain Neutral rating 9 July 2026

We raise our forecasts for Taikisha in light of 26/3 results and subsequent research, and

Implied upside +4.3%retain our Neutral rating. We raise our forecasts for recurring profits for 27/3 onwards

primarily to reflect improved margins at the green technology system segment. We also

raise our DPS forecasts for 27/3 onwards to reflect the company's policy of improving

shareholder returns (it has raised its DOE benchmark from 4.0% to 4.5%). We retain our

Relative performance chartvaluation methodology but raise our target price to ¥4,850, which we obtain by multiplying

our new 27/3 EPS forecast of ¥299.3 by a P/E of 16.2x. We continue to apply a discount

of around 20% to the Russell/Nomura Large Cap (ex financials) average. We think the

share price will find support from the high total shareholder return yield, given

management's pledge of annual share buybacks of ¥5bn, but think any further rise in the

share price will require the company to accelerate profit growth, for example by

concentrating more on high value-added projects at the green technology system segment

and focusing on margins at the point of order at the paint finishing system segment.

We raise forecasts for 27/3 onwards to reflect higher orders, better margins

We raise our 27/3 recurring profit forecast from ¥24.4bn to ¥26.0bn (up 5% y-y) versus

guidance of ¥25.0bn.