Japan Industrials: HK investor visit/Yaskawa 1Q/JSW MTP feedback; focus on execution and pricing

研报英文原文证据摘录

Japan Industrials: HK investor visit/Yaskawa 1Q/JSW MTP feedback; focus on execution and pricing

Goldman Sachs Japan Industrials

Mitsubishi Heavy Industries as one of the stocks likely to deliver the highest earnings

growth with the greatest degree of certainty when looking out to FY2027-2028. We also

recommend Japan Steel Works, AeroEdge, and SKY Perfect JSAT as small/mid-cap ideas

within the Aerospace & Defense subsector.

FAQ post-Yaskawa earnings: Yaskawa’s miss was company-specific, but execution risk

at other FA names has become a new focus

After our follow-up with Yaskawa Electric (Buy, on CL), we made significant downward

revisions to our estimates for FY2/27 in particular (our report). While the company

repeatedly emphasized that the issues were specific to Yaskawa and not an

industry-wide phenomenon, investor attention has shifted to execution risk at other

companies. Our impression is that the constraints on Yaskawa’s revenue, shipments, and

production stemming from the ERP issues are largely attributable to internal factors, and

that order trends themselves remain buoyant, with component procurement proceeding

smoothly despite higher costs. However, while ERP-related issues are purely

company-specific, the question of whether other companies may be harboring

execution risks that are not visible from the outside has suddenly emerged as a key

concern. This reflects a growing awareness not only of the lead time delay risk for certain

products that we also flagged during our Taiwan research trip, but also of the risk of

higher variable costs from being overly busy and the risk of operational issues arising

from human resource constraints.

As a result, we think this quarter’s earnings season will attract more attention than usual