IHI Corporation
7013.THIGHEquipment / SMR · Weight: 13%· Data as of 2026-05-02
Investment Thesis
Japan's most direct SMR supply chain play: X-energy partnership (Mar 2026) positions IHI to supply fabricated nuclear components into the US market. NuScale investor ($20M) and preferred manufacturer. GCAP fighter engine consortium (IHI/Rolls-Royce/Avio Aero) transition to fully integrated international collaboration (Sep 2025). Atsushi Sato appointed president of Aero-Engine, Space & Defense BA (Apr 2026), signaling strategic commitment to defence/nuclear. 9M FY2026: NI +10.7% despite revenue -1.8% — margin expansion. Aero engine segment (GE/P&W JVs) provides high-margin earnings base.
Risk
SMR timelines uncertain. Stock +155% in 52 weeks (peak ¥4,698; currently ¥3,153 = 33% off high) — partial correction ongoing. Full-year FY2026 results due May 8. Aero segment exposed to PW1100G inspection costs. Revenue -1.8% YoY 9M despite profit growth suggests mix/timing issues.
Monitoring Trigger
May 8 FY2026 results: watch for NI upgrade and FY2027 guidance. If X-energy or NuScale reach construction milestones, increase. GCAP: if engine JV milestone announced (first flight target 2035), upgrade conviction. If stock corrects below ¥2,500 (~20% from current), consider adding.
Key Dates
Update History
PE 27.6→23.7, ROE 23.6%→26.8%, op margin 9.1%→8.8%. GCAP international consortium, Atsushi Sato new defense BA president. 9M FY2026: NI +10.7%.
Key Metrics
Business Segments
| Segment | Revenue | Share | Description |
|---|---|---|---|
| Aero, Space & Defense | ¥556B | 34% | Jet engines (GE/P&W JVs), GCAP fighter engine, rocket motors |
| Resources, Energy & Environment | ¥411B | 25% | Nuclear components, boilers, carbon solutions |
| Industrial Systems | ¥485B | 30% | Engines, industrial equipment |
| Social Infrastructure | ¥162B | 10% | Bridges, water gates |
Supply Chain Evidence
| Evidence | Customer | Product | Detail |
|---|---|---|---|
| confirmed | X-energy | SMR component fabrication | MOU signed March 2026 for US-Japan SMR supply chain[source](2026-03) |
| confirmed | NuScale Power | SMR preferred manufacturer | $20M investment + JNI JV with JGC[source](2021-05) |
| confirmed | GE Vernova | Aero engine JV partner | Long-standing CF34/GEnx engine programs[source](2025-01) |
| probable | Japanese nuclear utilities | Reactor vessels, containment | Historical domestic nuclear supplier |
Sources & References
Peer Comparison
| Company | PE | Fwd PE | ROE | Op Margin | FCF |
|---|---|---|---|---|---|
| IHI Corporation | 23.7 | 22 | 26.8% | 8.8% | +¥68B |
| Hitachi | 28.96 | 27.58 | 13.65% | 11.1% | +¥1,390B |
| Japan Steel Works | 33.5 | 31.1 | 9.09% | 8.4% | -¥19.7B |
| Yokogawa Electric | 38.8 | 23.8 | 11.5% | 13.7% | +¥44B |
| Fuji Electric | 20.3 | 17.7 | 11.8% | 10.3% | +¥51B |
| Kanadevia | 10.97 | 11 | 5.2% | 1.9% | -¥22.6B |
| Organo Corporation | 27 | 27 | 21.7% | 20.6% | +¥19B |
| Kurita Water Industries | 22.3 | 21.8 | 6.8% | 12.4% | +¥25B |
| Sumitomo Heavy Industries | 19.3 | 18 | 5.0% | 4.8% | -¥2.3B |
| Toyo Tanso | 23.2 | 23.8 | 5.7% | 14.6% | -¥5.8B (capex phase) |
| Okano Valve | 21.6 | 8.2% | 10.1% | +¥624M | |
| Kobe Steel | 8.7 | 8.5 | 7.2% | 4.8% | N/A |
| Ebara | 30.9 | 25.4 | 15.8% | 12.1% | -¥51.5B (capex) |
| Stella Pharma | -9.8% | -23.6% | N/A | ||
| Teikoku Denki | 10.49 | 9.5 | 12% | 18% | N/A |