Japan Machinery: Our stance as we head into Apr-Jun results announcements for coverage companies

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Japan Machinery: Our stance as we head into Apr-Jun results announcements for coverage companies

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15 Jul 2026 09:30:46 ET │ 11 pages

Japan Machinery

Our stance as we head into Apr-Jun results announcements for

coverage companies

CITI'S TAKE

We summarize here our thoughts on results announcements for coverage

companies. Capex demand, centered on semiconductors, appears to have

been strong in Apr-Jun. However, market expectations for FA stocks with Takahiro InoueAC

high semiconductor exposure already seem generally elevated. We thus +81-3-6776-4646

believe stocks with relatively attractive valuations that can benefit from takahiro.inoue@citi.com

expanding capex demand have greater upside potential heading into

results announcements. We see good chances of positive stock price

reactions post-earnings for Kurita Water Industries, Misumi Group,

Amada, and Omron. Meanwhile, we foresee real risk of negative stock

price reactions after results announcements for Daifuku and Hoshizaki.

Our view on the cycle — Monthly orders from the Japan Machine Tool Builders'

Association, widely regarded as a key early-cycle indicator, continue to show

strength, and some in the market are concerned that Jul-Sep may mark the peak of

the order cycle on a YoY basis. However, as suggested by the continued growth

outlook for the WFE market, capex demand, centered on semiconductors, is likely to

continue to see structural increases. Capex is spreading to supporting industries

including SMEs, and we expect order increases in absolute terms through CY27.

While investors may harbor concerns about a short-term order cycle (YoY) peak, we

believe there is no need to be overly pessimistic heading into Apr-Jun earnings

announcements. We see the actual earnings showing and the outlook for machinery