Hokkaido Electric Power
9509.TMEDIUM-HIGHTactical · Weight: 5%· Data as of 2026-05-31
Investment Thesis
MONITORING TRIGGER HIT: Tomari Unit 3 NRA safety review approved July 30, 2025 — Japan's nuclear regulator formally cleared the 912MW reactor after 12 years of review. Restart target confirmed 'as soon as possible in 2027' (seawall completion early 2027). PBR 0.46x — still below book despite +32% 12-month run. Forward PE 6.74x reflects earnings normalization after Q4 FY2026 loss. Power supplier for SoftBank Tomakomai DC (300MW, Phase 1 50MW opening FY2026) and Rapidus 2nm IIM-1 fab (Chitose, Hokkaido — mass production target 2H FY2027). Hokkaido grid strain from DC boom = structural demand tailwind.
Risk
1) Tomari Unit 3 restart still requires seawall completion (early 2027) AND local consent — ongoing lawsuit (filed 2011) could delay. 2) D/E 4.17x — highest leverage in portfolio; ¥192B market cap vs huge debt. 3) Q4 FY2026 was a loss (-¥4,824M); FY2026 NI ¥44B but forward PE implies ¥28B NI — earnings to normalize lower. 4) Regulated utility: upside capped by tariff review cycles. 5) Stock already up +32.93% in 52 weeks; near-term catalysts now partially priced.
Monitoring Trigger
TRIGGER STATUS: Tomari Unit 3 NRA approval CONFIRMED (July 2025) → ADD signal triggered. Next: seawall completion confirmation (early 2027) → restart countdown begins. If SoftBank Phase 1 50MW DC opens on schedule (FY2026) with HEPCO power, ADD to 7%. If D/E exceeds 5.0x OR dividend cut, EXIT regardless of nuclear timeline. If NRA Units 1/2 also cleared AND Rapidus power contract announced, ADD to 9%.
Key Dates
Update History
UPGRADED to MEDIUM-HIGH: Tomari Unit 3 NRA approval confirmed (Jul 2025), SoftBank DC power supply confirmed, 3 supply chain entries added (was 0), PE 3.4→4.55, PBR 0.47→0.46
Key Metrics
Supply Chain Evidence
| Evidence | Customer | Product | Detail |
|---|---|---|---|
| confirmed | SoftBank Corp (IDC Frontier) | Grid electricity for Tomakomai AI Data Center (Phase 1: 50MW, expanding to 300MW+) | SoftBank confirmed Hokkaido Electric Power as power supplier for Tomakomai AI DC. Phase 1 50MW groundbreaking April 2025; full 300MW+ capacity planned. DC runs on 100% Hokkaido renewable energy via HEPCO and SB Power.[source](2025-04) |
| probable | Rapidus Corporation | High-voltage industrial power for IIM-1 2nm semiconductor fab (Chitose, Hokkaido) | Rapidus IIM-1 fab in Chitose, Hokkaido — HEPCO is the natural grid power provider. Fab cleanroom completed; 2nm PDK released Feb 2026 to early-access customers. Mass production target 2H FY2027. No direct HEPCO contract confirmed but fab is in HEPCO's service territory with no alternative utility.[source](2026-02) |
| confirmed | Hokkaido Data Center Ecosystem (multiple operators) | Grid stability and power distribution for Ishikari & Tomakomai DC cluster | HEPCO building new LNG transition power capacity to stabilize Hokkaido grid strained by DC boom. Cloud Watch reported HEPCO + partners agreed on 100% RE DC in Ishikari targeting 2026. HEPCO is the backbone grid operator for all Hokkaido DCs — structural toll-road position in Japan's AI infrastructure buildout.[source](2026-01) |
Sources & References
Peer Comparison
| Company | PE | Fwd PE | ROE | Op Margin | FCF |
|---|---|---|---|---|---|
| Fujitsu | 17.95 | 18.12 | 15.8% | 11.2% | +¥290B |
| Meidensha Corporation | 17.79 | ~19.5x (on FY2027 OP +6.9% guidance) | ~18.5% | 8.3% | N/A |
| SoftBank Corp | 18.8 | 17.5 | 17.42% | 14.76% | +¥600B (adjusted FCF, FY2025) |
| SWCC Corporation | 22.2 | 18.6 | 18.1% | 9.84% | +¥11.1B |
| DAIKIN INDUSTRIES | 25.16 | 23.48 | 9.26% | 8.7% | N/A |
| Hokkaido Electric Power | 4.55 | 6.74 | 10.6% | 7.2% | N/A |
| Kandenko Co. | 14 | N/A | 10.5% | 9.0% | N/A |
| Fuji Electric Co. | 19 | N/A | 13.1% | 11.1% | +¥51B |
| Nitto Kogyo Corp. | 16 | N/A | 10.8% | 10.6% | N/A |