Kioxia Holdings (285A.T) Conference Call Summary Company Overview - **Company**: Kioxia Holdings - **Ticker**: 285A.T - **Market Cap**: ¥6.3 trillion / $40.0 billion - **Enterprise Value**: ¥7.0 trillion / $44.6 billion - **Industry**: Semiconductor, specifically NAND flash memory Key Points Industry Dynamics - **NAND Market Tightness**: The NAND market is experiencing significant tightness due to strong demand for enterprise SSDs (eSSDs) for servers and constraints in cleanroom capacity affecting NAND production [1][2] - **Price Uptrend**: The price uptrend for NAND is expected to continue through at least October to December 2026, with estimates for average price increases revised to approximately 40% year-over-year for CY26 [1][20] Company-Specific Factors - **Low eSSD Exposure**: Kioxia has relatively low exposure to the eSSD market, which is currently seeing strong demand. This could limit the company's ability to capitalize on rising prices in this segment [2][20] - **OEM Contracts**: A significant portion of Kioxia's sales comes from OEM contracts with quarterly price negotiations, limiting exposure to the rapidly rising channel and spot markets [2] - **DRAM Sourcing**: As a pure-play NAND manufacturer, Kioxia must source DRAM externally, which is expected to increase costs and constrain profit margins compared to peers [2] Financial Performance and Projections - **Operating Profit Estimates**: Operating profit estimates for FY3/26 to FY3/28 have been raised by 6%, 36%, and 31% respectively, reflecting new price assumptions [3] - **Revenue Growth**: Projected revenues are expected to grow from ¥1,706.5 billion in FY3/25 to ¥2,983.7 billion in FY3/28, indicating a significant growth trajectory [6][12] - **Earnings Per Share (EPS)**: EPS estimates have been adjusted to ¥520.0 for FY3/26 and ¥1,410.3 for FY3/28, with a notable increase in EPS growth expected [12][19] Valuation and Price Target - **Target Price**: The 12-month target price is set at ¥11,400, based on a revised cost of equity assumption of 8% for FY3/26 and 12% for FY3/27 [3][21] - **Valuation Risks**: Key risks include NAND industry cyclicality, high dependence on specific customers, and the emergence of new NAND players in China [21] Additional Insights - **Market Performance**: Kioxia's stock has shown significant absolute performance, with a 567.8% increase over 12 months [10] - **Profit Margins**: Kioxia maintains relatively high profit margins due to strong cost competitiveness, which is a positive indicator for future performance [20] Conclusion - **Investment Rating**: The overall rating for Kioxia Holdings remains Neutral, reflecting limited further upside potential despite favorable market conditions and strong demand for NAND products [3][20]