Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>After dropping by half, Tokyo Electron's share price has bounced. But it is still vulnerable to cutbacks in AI-related investments and tariff-induced recession.</li>
<li>A positive scenario has net profit rising by 8% in FY Mar-26. In a negative scenario, it drops by 25%. We take the positive view.</li>
<li>Innovations in manufacturing point toward a big step up in profit margins by the end of the decade. But watch out for a cyclical downturn between now and then.</li>
</ul>


After dropping by half, Tokyo Electron's share price has bounced. But it is still vulnerable to cutbacks in AI-related investments and tariff-induced recession.
A positive scenario has net profit rising by 8% in FY Mar-26. In a negative scenario, it drops by 25%. We take the positive view.
Innovations in manufacturing point toward a big step up in profit margins by the end of the decade. But watch out for a cyclical downturn between now and then.


Tokyo Electron (8035 JP): Buy if You're Not Afraid of Recession

Research Coverage of Japanese Listed Companies, Shared Research Inc

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<ul><li>Cumulative Q3 FY03/25 revenue was JPY1.78tn (+38.4% YoY), with operating profit at JPY513.5bn (+65.1% YoY).</li><li>Full-year forecast for FY03/25 revised: revenue JPY2.40tn, operating profit JPY680.0bn, net income JPY526.0bn.</li><li>New SPE sales forecast: JPY1.83tn, with logic foundry JPY1.17tn, non-volatile memory JPY119.6bn, DRAM JPY545.1bn.</li></ul>

Cumulative Q3 FY03/25 revenue was JPY1.78tn (+38.4% YoY), with operating profit at JPY513.5bn (+65.1% YoY).Full-year forecast for FY03/25 revised: revenue JPY2.40tn, operating profit JPY680.0bn, net income JPY526.0bn.New SPE sales forecast: JPY1.83tn, with logic foundry JPY1.17tn, non-volatile memory JPY119.6bn, DRAM JPY545.1bn.

Tokyo Electron (8035 JP): Q3 FY03/25 flash update

Technology / Semiconductor / Internet Research

Nicolas Baratte

<ul>
<li>Cautious 2025 outlook: SEAJ and other Japanese SPE firms have toned down 2025 expectations. TEL mentions a flat total end-demand.</li>
<li>In 2024, spending was concentrated in leading edge (AI) and China. In 2025, Intel and Samsung Logic Capex declines, China should decline. The bright spots are TSMC and HBM Capex.</li>
<li>Consensus expectations are low, but rightly so. The stock is at average PEx. Neutral territory.</li>
</ul>


Cautious 2025 outlook: SEAJ and other Japanese SPE firms have toned down 2025 expectations. TEL mentions a flat total end-demand.
In 2024, spending was concentrated in leading edge (AI) and China. In 2025, Intel and Samsung Logic Capex declines, China should decline. The bright spots are TSMC and HBM Capex.
Consensus expectations are low, but rightly so. The stock is at average PEx. Neutral territory.


Tokyo Electron (TEL):  Maintains Its FY25 Guidance and Provides a Cautious 2025 Outlook

<ul><li>In 1H FY03/25, the company reported revenue of JPY1.12tn, operating profit of JPY313.9bn, and net income of JPY243.9bn.</li><li>The revised full-year forecast for FY03/25 includes revenue of JPY2.40tn and operating profit of JPY680.0bn.</li><li>The company announced a JPY70.0bn share buyback plan, acquiring up to 3.5mn shares, representing 0.8% of outstanding shares.</li></ul>

In 1H FY03/25, the company reported revenue of JPY1.12tn, operating profit of JPY313.9bn, and net income of JPY243.9bn.The revised full-year forecast for FY03/25 includes revenue of JPY2.40tn and operating profit of JPY680.0bn.The company announced a JPY70.0bn share buyback plan, acquiring up to 3.5mn shares, representing 0.8% of outstanding shares.

Tokyo Electron (8035 JP): 1H FY03/25 flash update

<ul>
<li>TEL beats its 1H25 guidance by 12% at Net Income level, increases FY25 Net Income forecasts by 10%, increases dividend by 10%, plus a small share buyback (0.8% of outstanding). </li>
<li>Positive change in the product mix: Legacy capex (incl China) to decline in 2025, AI-related Capex to increase by ~50% YoY.</li>
<li>What’s not to like? The stock is trading at 21x FY25 EPS, 18x FY26, Consensus expects 34% EPS growth in FY25, 22% in FY26. </li>
</ul>


TEL beats its 1H25 guidance by 12% at Net Income level, increases FY25 Net Income forecasts by 10%, increases dividend by 10%, plus a small share buyback (0.8% of outstanding). 
Positive change in the product mix: Legacy capex (incl China) to decline in 2025, AI-related Capex to increase by ~50% YoY.
What’s not to like? The stock is trading at 21x FY25 EPS, 18x FY26, Consensus expects 34% EPS growth in FY25, 22% in FY26. 


Tokyo Electron Beats Its 2Q25 (Sep-24), Raises FY25 Forecast, Increases Dividend, and a Buyback

Japan

Tokyo Electron Limited manufactures and sells industrial electronics products, such as semiconductor manufacturing machines, computer system, and electronic components.  The Company products are sold in US, Taiwan, and others as well as in Japan.

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Tokyo Electron (8035 JP)