Q4 FY12/25 results update
Strong trajectory is projected to sustain into FY12/26 – FY12/25 ended strongly, where OP surged by 35.8%, driven by favorable industry tailwinds and substantial margin expansion across both the Workplace and Equipment segments. We expect this upward trajectory to persist through FY12/26, underpinned by the company's comprehensive efforts to strengthen corporate governance, realize group-wide synergies, and accelerate its AI-driven technological transformation, particularly in "Office 3.0" consulting and data-driven services. Based on a robust project pipeline under negotiation with clients, we anticipate that FY12/26 will sustain both top-line growth and earnings expansion.
Promising outlook forward
Upward estimate revision - Following Itoki’s strong execution of its defined strategy, we have higher conviction in the company’s ability to exceed its current MTP targets. We have raised our FY12/26 forecasts, increasing net sales from ¥163.57bn to ¥169.72bn and OP from ¥14.67bn to ¥16.92bn. While we await the announcement of the next MTP, we have also adjusted our FY12/27–FY12/28 outlook upward to reflect this sustained positive momentum.
Valuations – On our earnings estimates, the shares are trading on a PER FY12/26 of 13.9x, FCF yield of 2.8%, dividend yield 2.9%, and at a current PBR of 2.7x. On the back of a strengthening track record, an increasing DOE, and a favourable shift in the sales mix, we see the shares as undervalued, with clear potential for a re-rating as the company’s transformation progresses.
Full report at this link
Description: Itoki is the third-largest office equipment supplier in Japan and provides equipment for research laboratories and warehouses.
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