Tokyo sold SCREEN's second half before it ships

Tokyo's worst fall came off a record quarter

SCREEN Holdings▼−18.96% — SCREEN Holdings, down 18.96 percent today, the Kyoto company whose wafer-cleaning tools run inside chip plants worldwide, closed November 2 at ¥9,218, down 18.96%, the steepest decline of any Nikkei 225 component that session↗ ¹². The fall landed two trading days after the company reported September-quarter revenue of ¥186 billion↗, up 35% year on year, at a 22% operating margin, a 558-basis-point improvement ³, and after management called its order intake a record↗ ⁴.

On October 30, when the Nikkei slid as much as 3% on worries over the sustainability of AI spending, Lasertec▲+8.01% — Lasertec, up 8.01 percent today was the named equipment loser, down 8.8%, and SCREEN was not among them ². Two sessions later the positions reversed: Lasertec rose 8.01% and SCREEN took the index's worst fall ¹. The market did not dispute the quarter just delivered. It repriced the six months still to be earned.

The forecast has not moved, and that is the problem

First-half results were strong: sales of ¥308.453 billion, up 12.5%, and operating profit of ¥54.523 billion, up 17.4%↗ ⁵. Guidance stayed at ¥743 billion of sales and ¥156.5 billion of operating profit for the year ending March 2027 ⁵.

The arithmetic that follows is the selloff's engine: the second half must earn ¥101.977 billion of operating profit, 1.87 times the first half, at a 23.47% margin against the 17.68% just booked ¹. Meanwhile first-half operating cash flow ran negative↗ as inventory and other working capital drained ⁶, and the company concedes installation timing pushed some revenue into later quarters ⁴.

The sellers' exhibits sit in the company's own filings

The bear case needs no speculation. Operating cash flow went backwards in the half while profit grew ⁶. The new capacity built for the demand boom, the ¥25 billion Nagaokakyo plant, starts producing wafer-cleaning equipment in January 2028↗ ⁷, a fiscal year after the guidance now being priced. Foundry demand weakened even as DRAM strengthened, and sales mix shifted toward the United States and Korea and away from Taiwan ¹. Every point of the required margin jump must come from tools already delivered but not yet accepted and invoiced.

The buyers' exhibits are contracts, not forecasts

SK hynix▲+3.15% — SK hynix, up 3.15 percent today, the Korean memory maker, said in late October that long-term agreements cover more than half of its 2027 and 2028 production capacity across 14 major customers↗, and it named SCREEN at its first Japan Partners Day among the suppliers invited to plan ahead with it ⁸.

SCREEN's own view of the wafer-fab-equipment market rose to $155 billion for 2026 and $200 billion for 2027 ³. Its semiconductor production equipment segment grew on DRAM demand and post-sales service ⁵, and management says this year's capacity investment aims squarely at next fiscal year's demand ⁴.

A cheaper multiple is not automatically a bargain

At ¥9,218 the shares trade at 15.17 times company-guided earnings↗, against Lasertec's 40.59 times; both figures come from dividing the November 2 close by each company's own published per-share earnings forecast ¹. The contrast sharpens the point: Lasertec's latest quarter showed operating profit down 41%, and its stock rose 8.01% the same day ¹. A cheaper multiple is not automatically a bargain when the plan behind it asks for an 87% profit acceleration inside six months ¹.

The next two quarterly reports settle this argument

The test is conversion, not demand. Watch the next two quarterly reports: if second-half recognized sales and margin climb toward the implied 23.47% ¹, Monday's fall was a bet on timing; if orders keep landing without becoming revenue, or foundry stays weak, the ¥101.977 billion second-half target is exposed and the discount was earned ¹.