校准FA行业偏好：买入评级谐波驱动系统与SMC，持有评级欧姆龙

Japan | Capital Goods Calibrating FA Sector Preference: U/GHarmonic Drive Systems & SMC; D/G Omron Industrial data suggests an upcycle for Japan factory automation (FA)companies. We upgrade Harmonic Drive Systems to top-Buy in the sector,as potential upside to order growth looks not yet included in the consensusestimates. We upgrade SMC to Buy, given attractive valuation. We believea bull-case scenario for Fanuc and THK has been reflected in theirvaluations. We downgrade Omron to Hold to represent a mismatch of thefundamentals vs market expectations. Market sentiment vs our view:Japanese factory automation (FA) sector stocks haveoutperformed the TOPIX vs three months ago. We believe Buy-side profit forecasts forthese companies have elevated alongside surging orders mostly from the semiconductorindustry. FA companies need to surprise investors by sizable upside to profit consensusor unprecedented corporate actions to sustain the valuation. We upgrade Harmonic DriveSystems ("HDS"; 6324 JP) and SMC (6273 JP) to Buy. We cut Omron (6645 JP) to Hold, asdownward revisions of the profit consensus forecast will weigh on the share price. FA-related industrial data:Japan's YoY change of shipments has run ahead of that ofinventory for the production equipment sector during Jan-Apr, i.e., an 'upcycle' quadrant (Chart1). Japan's machine tool industry orders in May were the fourth highest in history. In China,battery- and semiconductor-related demand supports industry capex (Charts 16-18). Upgrade Harmonic Drive Systems to Buy:We had been bearish on HDS due to our concernsover long-term margin risk from humanoid applications. However, mgmt's latest disclosuresuggests that humanoid related sales should be less than 10% of total sales, implyingour previous view was overly conservative. We expect HDS to book record-high orderstoward FY3/28, driven by traditional robot sector and lucrative non-traditional areas such asaerospace, defense, and medical sector. Near-term surprise will come from surging ordersfrom semiconductor sector and mgmt's positive comment on humanoid-related orders.Upside to profit consensus suggests that valuations should be actually cheaper than theyappear. Based on a cycle-peak multiple and our FY3/28 EBITDA forecast, our Street-high pricetarget of ¥10,000 offers over 40% upside. We now choose HDS as our top-Buy within the FAsector. Upgrade SMC to Buy:We believe SMC has underperformed the market more than it deserves.We expect an update on cash allocation (even without official disclosure) by the new CFO, whohas a financial advisory background, at Q1 FY3/27 results briefing. This should ease investors'concerns over SMC's capital policy. FY3/27 sales target looks aggressive to us, but our newprice target (¥80,700), even based on a lower profit forecast than consensus, still offers ~30%upside from the last close. SMC's position as a beneficiary of semiconductor demand growthstays intact. We forecast SMC to execute share buybacks (¥50bn; 1% of outstanding shares)on a regular basis. Source: Jefferies estimates, FactSet Downgrade Omron to Hold:Cost reduction initiatives, surging orders, and price hike effect vianew product introduction should improve the profit profile of Omron's Industrial Automationbusiness (IAB) and sustain the OP recovery track over FY3/27-28. However, the size of OPgrowth and OPM improvement could miss the consensus forecast due to demand cyclicalityand continued cost burden of Omron's extended restructuring action. Mgmt prioritizes cashuse for reinvestment in IAB's growth and M&A over share buybacks, and this will not incentivizeinvestors to accumulate Omron's shares at current levels. Our new SoTP-based price target(¥5,800) offers limited upside from the last close. Sho Fukuhara * | Equity Analyst813 5251 6156 | sfukuhara@jefferies.com Shintaro Yoshida * | Equity Associate+81 3 6830 3644 | syoshida1@jefferies.com Summary of Changes Table of Contents Updating Factory Automation Sector Stocks Japanese factory automation (FA) sector stocks have broadly outperformed the TOPIX in the pastthree months (Table 2). This was attributable to these companies' continued QoQ increases oforders in the past two quarters (Chart 3), mgmt's positive commentary on the demand environmentmainly related to the semiconductor industry, and positive industry data such as record-highJapanese machine tool industry orders since March 2026 (Chart 4; May Preliminary Orders; Aprildetails; March details), recovery trend of production activity related indicators (Chart 5), andTaiwanese semiconductor makers' sales uptrend (Chart 6). Investor feedback suggested that FAcompanies with notable sales exposure have been the most preferred targets of investment in thepast three months. Source: Japan Machine Tool Builders' Association Source: Japan Robot Association Source: Japan Robot Association IA Monthly (Jun 2026) – More Upside, MoreSustainability,Jason Tan|ASIA-PACIFIC|Industrials Source: Jefferies esti