Yamato: Tsuwa Machinery China will benefit from AI and robot related orders.

Analysts at Daiwa Capital Markets said in a report that Tsugami China is poised to benefit from an influx of orders related to artificial intelligence and robotics. The analysts at Daiwa Capital Markets said that the liquid cooling technology of AI servers and humanoid robots are creating new demand for precision machining components, such as those produced by Tsugami's Chinese subsidiary. They estimate that revenue from AI server liquid cooling business at Tsugami China is expected to grow at a compound annual rate of 49% between the fiscal years 2026 and 2029. Humanoid robots present another long-term equipment opportunity, as the production of reducers, screws, and related components requires high-precision automatic lathes, turret lathes, grinders, and thread rolling machines. Daiwa initiated coverage on the stock with a buy rating and a target price of HK$77.00.