Core Insights - Alstom reported strong commercial performance in Q1 2025/26, with orders exceeding €4 billion and a positive outlook for future sales driven by North American momentum and projects in Germany [4][11]. Group Performance - Orders received in Q1 2025/26 amounted to €4.1 billion, an increase of 11.8% compared to €3.645 billion in the same period last year, with organic growth at 13.6% [3][6]. - Sales reached €4.5 billion, reflecting a 2.8% increase year-over-year, with organic sales growth of 7.2% [9][11]. Backlog and Future Visibility - As of June 30, 2025, Alstom's backlog stood at €92.3 billion, indicating strong visibility for future sales [2]. Geographic and Product Breakdown - Europe accounted for 85% of total order intake, with significant contracts including €1.7 billion for additional RER NG trainsets in France and €720 million for Coradia Stream trains in Bulgaria [7][8]. - In terms of sales, Rolling Stock generated €2.416 billion, up 3% reported and 5% organic, while Services reported stable sales of €1.070 billion [9][10]. Key Projects and Deliveries - Alstom delivered key milestones across various regions, including the first metro train for Grand Paris Express and the first Innovia automated people mover in the U.S. [12].

Investment Rating - The investment rating for Kawasaki Heavy Industries is Underweight [3][56]. Core Insights - There is a high interest in the defense-related business, with substantial increases in orders and improving margins due to a rise in the government defense budget. The operating profit margin (OPM) for the defense business improved from 3-4% in the past to 6% in F3/25, with expectations of reaching 7-8% in F3/26. The company targets sales revenue of ¥500-700 billion in F3/31 [1][3]. - In the rolling stock business, margins remain low, and capacity utilization in domestic and Asian markets is also low. The company is exploring various strategic options for business restructuring despite perceptions of a passive approach [1]. Summary by Sections Investment Rating - Stock Rating: Underweight [3]. - Price Target: ¥5,100 [3]. - Current Share Price (as of May 20, 2025): ¥8,732 [3]. Business Performance - Defense business OPM improved to 6% in F3/25, with expectations of 7-8% in F3/26 [1]. - Sales revenue target for defense business is ¥500-700 billion in F3/31 [1]. - Rolling stock business faces low margins and capacity utilization [1].