Tokyo Electron

DCF against the market -37.4% (tolerance 15.0%). the steady state after FY2032: Market inputs.Terminal growth at 1.9 per cent and Market inputs.RONIC at 30 per cent, after an explicit forecast whose growth slows to 4 per cent by FY2031: Beyond the tolerance, caused by the steady state after FY2032 (terminal growth 1.9 per cent, RONIC 30 per cent), which carries 79 per cent of the enterprise value: the market's enterprise value at the valuation date, 22.9 trillion yen, is 1.62 times the model's 14.2 trillion. At the model's WACC of 8.03 per cent the market prices in residual operating income after FY2032 growing 4.70 per cent a year forever against the 1.9 per cent held; read as a steady state from FY2028, it implies a WACC of 5.48 per cent. A perpetual growth near 4.7 per cent, or a WACC near 5.5 per cent, closes the gap. Bes

Residual income against the market -36.2% (tolerance 15.0%). the growth of residual operating income after FY2032, held at Market inputs.Long-run nominal GDP growth, 1.9 per cent: Beyond the tolerance for the same cause as the DCF's: at the model's WACC of 8.03 per cent the FY2032 residual operating income of 843 billion yen would have to grow 4.70 per cent a year forever, not the 1.9 per cent GDP growth held, for the operations to reach the market's 22.9 trillion yen enterprise value; read as a steady state from FY2028, the market implies a WACC of 5.48 per cent. Beside the record (the Ten-year record block): revenue growth of 13.9 per cent a year from FY2016 to FY2026, -17.1 to +43.2 per cent in single years, and ROIC of 29.8 to 62.0 per cent in every year from FY2017