精工爱普生（6724 JP）：首席执行官简报

FY3/26EFY3/27EFY3/28E1,338.91,384.2--1,345.81,378.0--181.20184.50-0.5x0.5x Masahiro Nakanomyo * | Equity Analyst813 5251 6142 | mnakanomyo@jefferies.comHisako Furusumi * | Equity Associate+813 5251 6158 | hfurusumi@jefferies.com The Long View: Seiko EpsonInvestment Thesis / Where We Differ•Seiko Epson seems to have a solid portfolio among printing companies.Large-capacity tank models are expected to continue to perform wellglobally in the medium term. Industrial and commercial printing is alsoexpected to grow.•Micro devices are cyclical, but the business is shifting from commoditiesto customs, and profitability is improving.Base Case,¥2700, +44%•Inkjet technology is the pillar of the company'sgrowth strategy. Aims for business expansioninthe commercial/industrial printing fieldandhigh-speed office printing field basedon product differentiation using proprietarymicro piezo heads. High-capacity ink tankmodels remain on a growth trajectory anddrive earnings.•Prices are stable due to inkjet marketdemand/supplytightness due to WFHdemandand production constraints amidCOVID. Earnings increase.•Price target of ¥2,700 (FY3/27E P/E of 15x).Sustainability MattersTop Material Issues:1) Product Design & Lifecycle Management. 2) Supply Chain Management. 3)GHG Emissions.Company Targets:CO2 Reduction Scope 1/2 Net Zero by 2030 Scope 1+2 Total Emissions 55%ReductionQs to Mgmt:1) Seiko Epson has clarified its management commitment to the environment in its long-term vision Epson 25, which was updated in April 2022. The company has set targets of zero carbonconsumption and zero consumption of underground resources by 2050. What's the progress in thisregard? 2) Although disruption in the supply chain has had a major impact on the company's business,the company is proceeding with measures such as dispersing production bases and reviewing partsdesign. What's the progress in this regard?Please see important disclosure information on pages 6 - 11 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Upside Scenario,¥4500, +139%•Continued sales growth for high-capacity tankmodels and commercial/industrial printing.•Continued price stability and high earningsdue to ongoing WFH demand.•End of microdevice adjustment phase,recovery of earnings level•Improvecommunications•Upside price target is ¥4,500 (FY3/2E EPS of¥250, P/E of 15x). theprofitability Downside Scenario,¥1000, -47%•Margin deterioration due to worseningdemand-supply balance because of increasedproduction.•Fastercontractioncommunications (projector) market.•Downside price target is ¥1,000 (FY3/27E EPSof ¥100, P/E of 10x).Catalysts•Growth strategy realization(expansion ofhigh-capacity tank models and commercial/industrial printing)•Near-term oversupply, possibility of reducedprofitability ofvisual ofthevisual2 Within this context, Epson has won orders from local governments for printing solutions thatare able to run on emergency power sources. The company is also winning system ordersfrom restaurants, where features such as low power consumption and easy consumablesmanagement are rated highly. If Epson can provide the systems, an increasing number ofcustomers appear willing to adopt inkjet printers, according to the company. Looking ahead,along with strengthening its office product lineup, Epson aims to expand its solutions business byincreasing contact points with customers and better understanding user needs. Epson believesthat this is a competitive advantage over other printing manufacturers.Epson’s strengthsOther printer manufacturers are also promoting solutions. Epson's strengths in this area are:1) large MIF in emerging countries; and 2) the wide range of applications for inkjet printers.Infrastructure in emerging countries is often unstable, but inkjet printers can help build efficientsystems even in such environments. Inkjet printers also make it easy to build systems tailoredto the industry and business type, such as distributed printing in multi-store deployments.There is also potential for the building of systems that combine Epson’s robotics and sensingtechnologies.Recurring businessAs part of its efforts in recurring business, Epson has launched a monthly inkjet subscriptionservice (Ready Print) in Europe and is expanding it globally. Reflecting on the COVID-19 outbreak,the company has also launched a remote learning support service (Study One), which is based onthe cloud service Epson Connect. Printed materials from private tutoring schools are delivered tohome printers. Students hand write answers on pages printed out by the printer, scan them, andsubmit them back to the tutoring school. This enables the tutoring school to manage students'answer sheets as digital data. Epson is able to provide this service because has input/outputdevices (i.e., printers and scanners).Med/long-term visionEpson unveiled its long-term vision, Epson 25, in 2016. In 2021, a revised version was adoptedin Epson 25 Renewed