Tokyo Keiki
7721.TMEDIUMSatellite · Weight: 8%· Data as of 2026-05-21
Investment Thesis
Every new JMSDF surface ship and submarine needs Tokyo Keiki navigation and sensor systems — gyrocompasses, autopilots, fire control. Niche monopoly in naval electronics with 129-year history. FY2025 earnings trough confirmed (NI -35.2% to ~¥2.97B) but defense order backlog at RECORD HIGH — strong forward recovery visibility. Japan FY2026 defense budget ¥9.04T: new Mogami-class (6th ship), Taigei submarine, Awaji minesweeper all require Tokyo Keiki navigation systems. Metro Weather LiDAR partnership (Sep 2025) opens new defense sensor revenue stream. Management raised dividend ¥35→¥40 despite trough earnings — signal of FY2026 confidence.
Risk
1) Earnings trough: FY2025 NI -35.2% confirmed below guidance. FY2026 recovery requires defense order execution. 2) Small-cap (¥88.25B) with low liquidity — market punished stock -30% on trough results. 3) Actual PE ~29.7x on trough earnings is optically expensive — wait for FY2026 recovery confirmation. 4) Metro Weather LiDAR commercialization timeline uncertain — still early stage.
Monitoring Trigger
If FY2026 Q1 results (Aug 2026) show EPS recovery toward analyst estimate ~¥241 (+33%), ADD to 10%. If defense order backlog growth slows or budget cuts announced, TRIM. LiDAR: if defense contract >¥1B announced, UPGRADE. Forward PE 22.3x on recovery EPS is the fair entry benchmark.
Key Dates
Update History
Added supply chain links to MHI/KHI and JMSDF. Added key dates. No metric changes.
FY2025 results (May 11, 2026): NI -35.2% YoY, revenue ¥61.49B. Stock -30% from ¥7,690 to ¥5,370. Market cap ¥88.25B. Dividend RAISED ¥35→¥40. Metro Weather LiDAR added to supply chain. Defense order backlog at record. Forward PE 22.3x on analyst recovery estimate. HOLD — trough confirmed, recovery building.
Key Metrics
Supply Chain Evidence
| Evidence | Customer | Product | Detail |
|---|---|---|---|
| confirmed | JMSDF | Gyrocompasses, autopilots, navigation and sensor systems for warships/submarines | Sole domestic supplier of marine navigation systems for JMSDF. Defense order backlog at RECORD HIGH as of FY2025 Q3. FY2026 budget includes 6th Mogami-class, 1 Taigei submarine, 1 Awaji minesweeper — all requiring Tokyo Keiki systems.[source](2026-05-11) |
| confirmed | Metro Weather — defense Doppler LiDAR | Wind Guardian Doppler LiDAR for defense applications | Sep 2025 alliance to mass-produce Doppler LiDAR for defense. Tokyo Keiki provides manufacturing expertise, production facilities, and defense distribution network. New revenue stream beyond navigation systems.[source](2025-09) |
| probable | MHI / KHI (supply chain link) | Naval electronics for Mogami and Taigei programs | Tokyo Keiki navigation systems installed on MHI-built Mogami-class and KHI-built Taigei submarines. MHI awarded new Mogami-class contract April 2026.[source](2026-04) |
Sources & References
Peer Comparison
| Company | PE | Fwd PE | ROE | Op Margin | FCF |
|---|---|---|---|---|---|
| Mitsubishi Heavy Industries, Ltd. | 40.1 | 40.24 | 12.2% | 8.7% | +¥300B |
| ShinMaywa Industries, Ltd. | 16.5 | 18 | 8.18% | 4.5% | -¥11.0B |
| Tokyo Keiki | ~29.7 (actual FY2025 on ¥181 EPS; StockAnalysis shows 19.29x but uses stale FY2024 data) | 22.3 | ~7% (FY2025 actual; StockAnalysis 11.89% is stale FY2024) | ~4.6% (FY2025: OP ¥2.83B est. / Rev ¥61.5B) | N/A |
| ACSL Ltd. | N/A | N/A | -77.7% | -71% | -¥1.3B |
| The Japan Steel Works, Ltd. | 33.5 | 31.1 | 9.09% | 8.4% | -¥19.7B |
| SKY Perfect JSAT Holdings Inc. | 43.7 | 35 | 4.5% | 10% | +¥30B (est.) |
| Howa Machinery, Ltd. | 10.3 | 11 | 6.5% | 5.5% | +¥1B (est.) |