ORIENTAL LAND CO.,LTD. Q4 FY2026 earnings call

Introduction to Meigaku Scout Tool

• It is a free fundamental analysis tool launched by Monex Securities in 2017, available for desktop and smartphone, with a limited version (Meigaku Scout Light) available for non-account holders.
• Core features include enterprise profile, historical performance since 2007, analyst estimates, share price indicators, segment performance, dividend/shareholder return tracking, and peer comparison functionality.

Key Observations on Oriental Land

• Share price has fallen from over 5,000 yen in early 2024 to around 3,700 yen, driven by weak theme park performance, downward analyst target price revisions, and selling of policy holdings by major shareholders.
• Current PER is 50.4x, near the lowest level in the past few years (the lowest in the past 2 years is 44.2x), but still at a very high valuation level for growth stocks.
• Long-term strategic direction is to transform into a resort-style destination, increase per guest spending through hotel expansion and the planned Disney Cruise business, leveraging Disney's strong content IP to drive growth.

Key Observations on Arisawa Seisakusho

• Market capitalization of approximately 5 billion yen, a small-cap electronic materials manufacturer, with no long-term sales growth and a history of 5 fiscal years of operating deficits, currently low ROE compared to the Japanese corporate average.
• Very high shareholder return: current dividend yield of 5.8%, the company has a formal policy of 80% total return payout and 6% DOE, which translates to approximately 6% dividend yield at the current PBR of 1x.
• Current full-year operating profit forecast was revised upward from 3.2 billion yen to 4.2 billion yen, with 67.8% of the full-year target achieved by the first half, outpacing the 50% midpoint progress, supported by recovering smartphone component demand.

Key Observations on Nidec

• Market capitalization over 3.2 trillion yen, a global leading comprehensive motor manufacturer that has achieved long-term growth through active M&A, current full-year forecast is 2.5 trillion yen in revenue and 240 billion yen in operating profit, with profit recovering after 2023 structural reform costs.
• Current PER is 16x, the lowest level in the past 5 years, which is cheap relative to Nidec's historical valuation (it previously traded as high as 40-80x PER).
• Key growth drivers are near-line hard disks for AI data centers and water-cooled server cooling components, which are currently receiving market attention.

Key Observations on Mitsubishi HC Capital

• Market capitalization of 1.5 trillion yen, a large Mitsubishi-affiliated comprehensive leasing company formed by the 2021 merger of Hitachi Capital, with a long-term track record of consistent dividend increases.
• Peer comparison shows most Japanese leasing companies have dividend yields concentrated around 3.8-3.9%, Mitsubishi HC Capital's expected dividend yield is 3.86%, with the highest PER (11x) among the peer group, making it slightly more expensive than peers.
• The impact of recent Bank of Japan rate hikes is expected to be neutral: higher funding costs are offset by higher lending yields.

For Oriental Land: 1. Theme Park segment: Revenue growth has been sluggish recently, with particularly weak performance in the summer quarter, driven by cooling post-2023 revenge travel demand and negative impacts from extreme heat. 2. Hotel segment: Revenue is growing steadily, supported by the opening of the new Fantasy Springs hotel, capacity expansion, and successful price increases, with strong underlying demand. For Arisawa Seisakusho: It is a single-segment electronic materials manufacturer focused on smartphone/tablet printed circuit board materials, with long-term flat sales of 4.2 billion yen and current operating profit of 140 million yen. For Nidec: It is a multi-segment motor manufacturer: the EV motor segment is facing weak demand; the near-line hard disk (for AI data centers) and water-cooled server cooling components segments are receiving market attention and growing. For Mitsubishi HC Capital: It is a single-segment comprehensive leasing company offering financial services across multiple industries, with steady current profit growth of 9% year-over-year.

• For Oriental Land: Management (analyzed by seminar speakers) expects long-term growth to come from expansion of the resort business, including new hotels and Disney Cruise, which will increase per guest spending, but the high 50x PER means the downside valuation floor is uncertain.
• For Arisawa Seisakusho: Full-year operating profit has already been revised upward once, and further upward revisions and additional shareholder returns (dividend increases or share buybacks) are possible if third-quarter results are strong. The high fixed dividend policy means the stock is supported by dividend-seeking buying at lower share prices.
• For Nidec: Analyst consensus expects 10% profit growth next year, but consensus forecasts have trended downward over the past year due to weak EV demand. A successful hostile TOB for Makino Milling Machine would be positive for long-term growth, while extended uncertainty would be a drag.
• For Mitsubishi HC Capital: The company expects 9% year-over-year growth in current net profit, with consistent long-term dividend increases expected. Valuation is slightly elevated relative to peers, so investors may find better value in other leasing companies.

• Oriental Land: Extreme heat negatively impacts summer park attendance and spending, high 50x PER means valuation correction risk remains, major shareholder policy selling creates ongoing supply/demand headwinds, growth depends on successful new resort expansion which is not guaranteed.
• Arisawa Seisakusho: Revenue is tied to cyclical smartphone demand, making earnings difficult to forecast with a history of both upward and downward revisions, long-term lack of sales growth leads to low ROE, the high payout ratio means dividends are not permanently guaranteed if business turns down.
• Nidec: Weak EV demand (especially in the Chinese market) has pressured the core EV motor business, and growth from new AI-related segments has not fully offset this weakness. The ongoing hostile TOB for Makino Milling Machine creates execution and integration uncertainty.
• Mitsubishi HC Capital: Valuation is slightly higher than peer leasing companies, the recent post-merger share price rally has already priced in the high dividend trend, leading to a recent period of sideways consolidation.
• General risk for all high-PER growth stocks: It is difficult to determine a clear valuation floor, unlike value stocks which have clearer support from dividend yield and PER metrics.

Q: Why has Oriental Land's share price been falling despite not bad operating performance, and is it good to add more shares now? / A: The decline comes from three main factors: recent sluggish theme park growth hit by extreme heat, leading analysts to lower target price estimates; selling of policy holdings by major shareholders (Keisei Electric Railway and Mitsui Fudosan) weighing on supply; and the stock's previous very high valuation correcting lower. Current PER has fallen to 50x, near multi-year lows, but 50x is still a very high valuation, and the floor is hard to determine, so investors should use historical PER levels as a reference for judgment.

Q: I hold 2,000 shares of Arisawa Seisakusho and am considering selling it, or buying it in NISA. What is the investment merit? / A: The main attraction is very high shareholder return: the company has a policy of 6% DOE, which gives ~6% dividend yield at current PBR of 1x, with 67.8% of full-year profit already achieved in the first half after an upward revision. If share price falls, higher dividend yield attracts new buying, so there is clear investment value for dividend-focused investors, though long-term growth is limited.

Q: Nidec's share price has fallen sharply even with solid performance, why, and what is the outlook? / A: The share price decline is because analyst consensus earnings forecasts have drifted down over the past year on weak EV demand, which has dented investor sentiment. The ongoing uncertain hostile TOB for Makino Milling Machine also adds overhang. Current PER of 16x is the lowest in 5 years for Nidec, with growth from AI-related near-line storage and server cooling components, so it looks relatively cheap compared to historical valuation.

Q: I have continued adding Mitsubishi HC Capital since the merger, and I prioritize dividends, is it still safe to hold? / A: After the merger, the share price has rallied strongly and the company has consistently increased dividends, which aligns with dividend-focused goals. Relative to peer leasing companies, it has a slightly higher PER and valuation, with dividend yields similar to peers, so it is still solid but investors may find better valuation in other leasing names. The impact of recent rate hikes is expected to be neutral overall.