花旗上调Advantest目标价并重申买入，核心依据仍是7月29日已披露的Q1业绩超预期与AI测试需求强劲

Q1 results significantly exceeded internal plans as SoC testers expanded not only for high-volume GPU applications but also for ASIC and CPU apps. Rich-configuration automated test equipment is in demand, with the gross margin reaching a record high of 69.5%. We anyway project QoQ revenue and profit growth in Q2, but order enquiries remain strong, suggesting upside potential.
Key points from the review meeting
Q1 earnings saw SoC testers significantly exceed internal expectations, while memory testers were largely in line with plan. In the upwardly revised full-year plan, Advantest currently incorporates the impact of memory cost increases in H2, but we suspect that a considerable portion of these increases will ultimately be offset. The company appears to prioritize maintaining market share from a medium- to long-term perspective rather than achieving short-term price increases (compared to front-end equipment manufacturers). AI-related demand remains robust, with the V93000 series testers, which have already become the de facto standard for SoC testers, being widely adopted for GPU, custom ASIC, and CPU applications. Advantest sees custom ASIC business expansion proceeding at a faster pace than it previously anticipated.
Capacity
A 5,000-unit annual production capacity system will likely be realized around September-October 2026, earlier than the original target (end of FY3/27). The next milestone of a 10,000-unit system was originally targeted for early 2029, but the company aims to accelerate this as well, with updates potentially coming as early as the Q2 earnings announcement at the end of October.
Shareholder returns
Share buybacks of ¥150bn in the framework set on October 28, 2025, continue, with a 90% completion rate as of end-July, suggesting an early completion. Given the 50% total payout ratio target and recent earnings upside, we believe a ¥200-300bn share buyback is likely to be announced at the Q2 results announcement.
Investment rating and target price
Due to our upward earnings revisions, we lift our target price from ¥35,000 (FY3/28E PER of 45x) to ¥42,000 (same multiple). Following Q1 earnings, Advantest shares rose while Disco shares fell. While Advantest's earnings are in fine shape, we have higher expectations for Disco's recovery in the near term. The Q2 earnings announcement is scheduled for late October, and if events follow the usual pattern, an IR event may be held in Q3 (an IR Fireside Chat was held on the evening of November 17, 2025). We maintain our Buy rating on the shares.