Ulvac （6728.T） Earnings Review： 4Q above expectations； mixed business environment for FY6/25， but management says medium~term plan targets within reach； Buy

Investment Rating - The report maintains a "Buy" rating for Ulvac (6728.T) with a 12-month price target of ¥12,000, indicating an upside potential of 45.5% from the current price of ¥8,249 [1][6][9]. Core Insights - The earnings review for Ulvac shows that 4Q results exceeded expectations, with operating profits of ¥9.4 billion, significantly above estimates and guidance [1][6]. - Management has indicated that despite a mixed business environment, the medium-term targets remain achievable, with a forecasted 5% year-over-year increase in orders for FY6/25 to ¥270 billion [1][5]. - The company expects improvements in gross margins driven by sales growth and product mix enhancements, with management anticipating that 90% of the gross margin improvement will come from these factors [6][8]. Financial Summary - For FY6/24, total revenue is projected at ¥261.1 billion, with operating profits expected to reach ¥29.8 billion [2]. - The forecast for FY6/25 includes total revenue of ¥279.9 billion and operating profits of ¥35.4 billion, reflecting a positive growth trajectory [2][6]. - EPS estimates for FY6/25 are set at ¥517.5, increasing to ¥651.5 by FY6/26 [2][6]. Business Environment - The report highlights a mixed business environment, particularly in the semiconductor sector, with some delays in investment timing for growth areas, but overall, management remains optimistic about future growth [5][8]. - The company is focusing on market share gains in logic, memory chip, and power semiconductor equipment applications, which are expected to drive top-line growth [8][9]. Valuation and Risks - The valuation methodology suggests a target price based on FY6/26 earnings estimates and an EV/EBITDA multiple of 20X, reflecting the global SPE sector average [9]. - Key risks include slower-than-expected margin improvements and potential downturns in capital expenditures for flat panel displays [9].