Mitsubishi Heavy Industries MTBP Progress Briefing

Goldman Sachs maintains a Buy rating on MHI following a progress briefing where the company raised its cash inflow outlook to ¥2.6 tn and confirmed that its ITO methodology is driving substantial productivity gains in its gas turbine business.

Key Takeaways

• 1.MHI substantially raised its cash inflow outlook for the 2024 MTBP to ¥2.6 tn from the initial ¥1.5 tn guidance.
• 2.The 'ITO' (Innovative Total Optimization) management policy is delivering tangible productivity gains, including a 30% capacity increase in gas turbines.
• 3.FY3/27 profit guidance was raised to ¥540 bn (10% margin), exceeding the original MTBP target of ¥450 bn.

Table of Contents

• Higher-than-expected cash inflows
• Gas turbines
• Profit generation using ITO methodology
• Our view
• Price Target Risks and Methodology - Mitsubishi Heavy Industries (7011.T)

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