1Q New Guidance Above Expectations: AI Capex Benefits Are Broadening

THK reported a significant 1Q earnings beat and record orders of ¥87bn, driven by broadening AI Capex demand, particularly in China. Goldman Sachs raised its target price to ¥5,200 but maintained a Sell rating due to valuation and long-term competitive concerns.

Key Takeaways

• 1.1Q operating profits of ¥7.6 bn significantly beat the GS estimate of ¥5.4 bn, leading to a guidance raise for FY12/26.
• 2.Demand momentum is extremely strong with orders reaching a record ¥87.0 bn, driven by broadening AI Capex benefits.
• 3.Momentum in China is particularly robust with orders increasing 68% year-over-year, despite previous concerns about market share loss.

Table of Contents

• Key Data
• GS Forecast
• Ratios & Valuation
• Growth & Margins (%)
• Income Statement
• Balance Sheet
• Cash Flow
• Earnings surprises
• Our view
• Investment Thesis - THK
• Price Target Risks and Methodology - THK (6481.T)
• Disclosure Appendix

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