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Kurita Water Industries

6370.THIGH

Core · Weight: 30%· Data as of 2026-05-17

¥8,044-4.57%

6-month daily

Investment Thesis

World's largest semiconductor water treatment company — the Kurita moat is chemical process expertise spanning 75+ years, embedded in 10,000+ client facilities across 20+ countries. Serves 80% of global semiconductor foundry capacity by geography (Japan, Korea, Taiwan, South Asia). FY2026 earnings miss was revenue recognition timing, not demand: operating cash flow grew 72.5% YoY, confirming structural strength. FY2027 guidance positive — ongoing global semiconductor investment and US expansion (Pentagon Technologies, Avista Technologies acquisitions) drive revenue diversification.

Risk

1) ROE 6.5% below TSE 8% governance target — risk of continued discount vs peers. 2) PE 36x elevated due to earnings timing miss — if structural rather than timing, valuation expensive. 3) US acquisitions integration risk. 4) General Industry segment (steel, power) is mature — growth depends on Electronics segment accelerating.

Monitoring Trigger

Full-year FY2026 results (May 2026): if full-year OP >¥50B and OCF guidance remains strong, HOLD. If management provides FY2027 OP guidance >¥60B, ADD. If US semiconductor fab ramp accelerates (TSMC Arizona P2 orders visible), ADD 5%.

Key Dates

2026-05earningsFY2026 full-year results confirmation (key validation: full-year OP vs Q3 run-rate)

2026-08earningsQ1 FY2027 results — first evidence of FY2027 recovery trajectory

2026-10catalystTSMC Arizona P2 ramp expected — major Kurita US order potential

Update History

2026-05-17new_narrativeHOLD

View report →

Initial DD — world #1 semiconductor water chemicals, PE 36x reflects FY2026 earnings miss (not structural), OCF +72.5%, FY2027 positive guidance

Key Metrics

N/A

Fwd PE

2.5

P/B

6.5%

ROE

12.8%

Op Margin

N/A

D/E

1.5%

Div Yield

positive (OCF +72.5% YoY FY2026)

FCF

¥978B

Mkt Cap

Business Segments

Segment	Revenue	Share	Description
Electronics Industry	~¥200B	~50%	UPW chemicals and systems for semiconductor and display fabs globally. Higher-margin, faster-growing.
General Industry	~¥203B	~50%	Water treatment chemicals for boilers, cooling towers, and wastewater — steel, power, chemical, food industries.

Supply Chain Evidence

Evidence	Customer	Product	Detail
confirmed	Global semiconductor foundries (TSMC, Samsung, Micron, Intel fabs)	UPW chemicals, process water treatment chemicals, system O&M	Company operates in Japan, South Korea, Taiwan, and South Asia — covering 80% of global semiconductor foundry capacity. Provides one-stop service: install, operate, manage, maintain UPW systems.[source](2026-05)
confirmed	US semiconductor fabs (via Pentagon Technologies, Avista Technologies)	Post-CMP cleaning, advanced process water treatment	Acquired Pentagon Technologies and Avista Technologies to expand US semiconductor water treatment. Strengthens position for TSMC Arizona, Samsung Taylor, Micron US.[source](2025-2026)
confirmed	European semiconductor fabs (TSMC Dresden, Intel Germany ecosystems)	Water treatment chemicals and systems	Kurita Europe operates water treatment business for semiconductor and industrial clients across Europe, positioned for CHIPS Act fab buildout.[source](2026-05)

Sources & References

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Peer Comparison

Company	PE	Fwd PE	ROE	Op Margin	FCF
Nomura Micro Science	17.2	11.7	15.2%	14.1%	+¥4B (est FY2026 trough)
Kurita Water Industries	36	N/A	6.5%	12.8%	positive (OCF +72.5% YoY FY2026)
Metawater	13.16	11.78	9.1%	5.9%	positive
Toray Industries	14.2	N/A	4.6%	N/A	N/A