Both companies reported the FY3/26 on 4/28.

Yurtec

FY3/26 results:

·      Net sales came to ¥252.3 billion, a ¥4.9 billion decline (‑1.9%) due to slower‑than‑expected progress on large‑scale projects and delays in securing major orders at overseas subsidiaries.

·      But the better project productivity led to ordinary profit of ¥18.9 Bn (+9.2% y/y).

·      While the company’s ordinary profit for the most recent 3‑month period (January–March, 4Q) declined 8.4% year y/y to ¥6.49 billion, this number was much better than ¥5.09bn (-28.1% YoY) guided in 1/26.

·      The company’s restructuring of a subsidiary in Vietnam is complete.

FY3/27 guidance

·      Sales: Y273 Bn (8.2% y/y)

·      OP: Y18.9 Bn (4.8% y/y)

·      Ordinary profits: ¥19.5 Bn (3.2% y/y), marking a second consecutive record high and extending its streak of earnings growth to 7 straight years.

·      Dividends for FY3/27 are upped by Y 6 to Y78.

Kandenko

FY3/26 results:

·      Sales: Y742 billion (10.4% YoY)

·      Operating profit: Y83.1 billion (42.5% YoY)

·      Ordinary profit: Y85 billion yen (42.8% YoY)

FY3/27 guidance;

·      Sales: Y780 Bn (5.1% YoY)

·      Operating profit: Y90 billion (8.3% YoY)

·      Ordinary profit: Y90.5 billion yen (6.5% YoY)

·      Dividend forecast at ¥130 per share, a ¥6 increase.

My take:

Kandenko clearly outperformed Yurtec—both in actual results and in outlook. Its FY3/27 operating profit guidance is about double Yurtec’s, and recent earnings were also stronger. But the real reason Kandenko’s stock moved sharply is its updated mid-term plan.

The key change: Kandenko raised its FY3/27 ROE target from “above 10%” to “around 16%.” That’s a big jump and signals much better capital efficiency. Its FY3/25 ROE was already 12.1%, so the target looks achievable.

Yurtec also improved its targets, but not to the same level. It raised its FY3/29 ROE target to 9% (vs. ~6% CAPM), with FY3/25 ROE at 8.3%. The gap remains, and Yurtec’s smaller, Tohoku-focused business makes it harder to match Kandenko’s scale and profitability. That’s why it is usually traded at a discount.

That said, Yurtec does have some positives for FY3/27 which I detailed in my client note.

Paid subscribers on Substack receive full access to my institutional‑level research note—including my Yurtec initiation—after the standard three‑month delay from institutional distribution. The pricing is intentionally set to broaden access, and I encourage you to join as a paid subscriber.

If you’d prefer to start by sampling my work, I’d be happy to send it straight to your inbox at no cost. I’m confident that once you experience the depth, clarity, and practical value of my research, you’ll see why even clients with established Japan research teams find my perspective uniquely useful.

#Yurtec #Electricconstruction #DC #AI #Japanesestocks #Valuestocks