2025-06-16-花旗集团-日立（6501）_日本要点_10页_164kb

Summary of Citi Research Point for Japan (June 17, 2025)

Corporate Updates

• Murata Electronics announced a transfer of its micro primary battery business to Maxell for ¥8bn, effective in FY3/26. The move is aligned with the "best owner principle," maintaining focus on rechargeable lithium-ion batteries. Rating: Neutral; limited share price impact expected as the business typically operates profitably.

• Nissan Chemical notes neutral share price implications from R&D briefing, with a slight shift toward more aggressive development in animal drug products, though core strategies unchanged.

• Hitachi lifts Buy rating target to ¥5,000 from ¥4,700, projecting a 15% CAGR in growth from digital, power grids, and rail sectors. Rating lifted due to agile CEO adjustments and rekindled expectations.

• Kubota maintains Neutral rating but reduces target to ¥1,750 from ¥1,850 due to tariffs, weak U.S. tractor demand, and subdued European/Asian markets, factoring in minor domestic demand boost from higher rice prices.

• Nissan Motor keeps Sell rating with ¥300 target, projecting no profit until FY3/28; risks include declining volumes due to tariffs and brand erosion from restructuring.

FX Insights

• Middle East tensions and oil price increases may negatively impact JPY if risks persist; alternatively, JPY could strengthen if geopolitical uncertainty leads to risk aversion. Base case anticipates USDJPY rebound to ~¥150/$ by year-end and a potential drop below ¥140/$, reflecting neutral outlook. Risk avoidance scenarios add downward pressure.

REIT Performance

• REITs reviewed exhibit varied ratings:
  • Nippon Accommodation Fund: Neutral, no price change.
  • Industrial & Infrastructure Fund: Buy, target now ¥140,000 vs prior.
  • Advance Residence Investment, Activivia Properties, Nippon Prologis REIT: Neutral, targets revised down.