Hitachi Construction Machinery (6305.T): Model Update

研报英文原文证据摘录

Hitachi Construction Machinery (6305.T): Model Update

vel of profitability/cash flow

generation relative to larger peers and the likelihood that Hitachi reduces its stake from 10% over the next 6 months. We note

management is now proactively looking to grow via M&A.

Risks

Risks related to our target price include: 1) an improvement/slowdown for construction machinery demand in North Amrica

and/or gain/loss of market share; 2) an uptick/decline in the excavator market in the rest of Asia and other emerging

economies; 3) a recovery/downturn in global mining capex and/or commodity prices; 4) market share gains/losses in North

America; 5) yen weakness/strength; and 6) changes among its main shareholders. Our forex assumptions for FY3/27 are

¥155/$, ¥180/euro; and ¥110/AUD. We estimate forex sensitivity at the OP stage (full-year basis) at around ¥1.6bn for every ¥1

move against the dollar, around ¥0.6bn for every ¥1 move against the euro, and ¥0.4bn for every ¥1 move against the AUD.

Komatsu

(6301.T; ¥7087.0; 2; 30 Jul 26; 15:30)

Valuation

We apply a PER of 18x to our FY3/27 EPS forecast to arrive at a target price of ¥8,000. Our target multiple is a premium to

Komatsu’s six-year average (12x) but a discount to the CY26E average for global industrials of c20x and a large discount to

other global mining OEMs. We think this multiple is reasonable given weak demand for mining and construction equipment in

Southeast Asia (especially Indonesia), the ongoing threat of increasing competition from low-cost Chinese OEMs (not just in

Southeast Asia) and downside risks relating to further changes in US tariff policy. On the plus side, Komatsu's higher-margin

mining business should benefit from higher copper and gold prices. Compared to industry leader CAT, operating margins at