2025-06-12-花旗集团-天田（6113）_天田公司（6113.T）_与三羽一彦会面及参观天田全球创新中心的要点_12页_559kb

Citigroup Research on AMADA (6113.T)

Summary of Key Points (June 13, 2025 ET)

Recent Engagement Insights

• Meeting with Management: Discussed long-term value unlocking and ROE enhancement. Management views the end of the medium-term plan fiscal year (2031/2026) as a key moment following the company's consolidation via acquisition of Via Mechanics.
• Balance Sheet Reform: Amada is advancing reforms:
  • Removal of installment receivables (planned for 2026/27), currently composing ~35% of receivables.
  • Sale of investment securities (¥16bn) in Japan+ tax approval.
  • PBR (0.8x) based, FY3/26E 12x PER (¥1400 target price).
  • Potential increase in buybacks beyond ¥60bn target.
• Orders: Domestic demand resilient; Subsidies expected to boost orders. North America/Expo season positive outlook in May. Stable in Japan, weak in China/ASEAN; challenging Europe.
• AGIC Impact: Impressed by V-factory connections and potential of LIVLOTS system. Automated proposal system shown.

Valuation Context

• Current market cap: ~$3.36T.
• Seller rates AMADA "Neutral".
• Target price ¥1400 (vs current ~¥1499) with 4.1% dividend yield expected based on target.
• Risks: Manufacturing recession, subsidy cuts, yen strength/reduced competitiveness, fiber laser decline, Chinese discounting. Upside Catalysts: Surprising HW/IoT spending in SMEs, yen appreciation, buyback announcements.
• Target PBR 0.8x (5-year average ~0.8x).

Valuation

• Target Price: ¥1,400 (equivalent to ~$8.15 as of June 13 ET)
• Period: 2026 Financial Year Estimate (FY3/26E)
• Expected Dividend Yield: 4.2%
• PBR (Price to Book Value): 0.8x (5-year avg: 0.8x)
• PER (Price to Earnings Ratio): ~12x
• Market Capitalization: ~$3,357M

Risk Assessment

• Our Target Price Could Underperform: Global manufacturing recession, government subsidy reduction, strong Yen hurts competitiveness, weak fiber laser demand, excessive discounts by Chinese OEMs.
• Our Target Price Could Outperform: Higher-than-expected SME spending/M&A activity, share buybacks, Yen appreciation.