First Read: Asahi Kasei "Q4 FY3/26: Announces second consecutive year of..."

Research evidence excerpt

First Read: Asahi Kasei "Q4 FY3/26: Announces second consecutive year of..."

med domestic naphtha price is

¥120,000/KL for H1 and ¥63,000/KL for H2, which aligns with our full-year assumption Shunta Omura

of ¥94,000/KL (link). The company expects the Middle East situation to stabilize by Analyst

around the end of June. Additionally, the company forecasts OP in the healthcare shunta.omura@ubs.com

segment at ¥90.0bn (+7.8% yoy, our forecast ¥109.0bn), which appears somewhat +81-3-5208 6244

conservative. At the same time, it forecasts a significant increase in OP in the materials Atsushi Seki

segment at ¥81.0bn (+18.6% yoy, our forecast ¥76.5bn). The company did not disclose Analyst

H1 forecasts. Furthermore, the company estimated the impact of the Middle East atsushi.seki@ubs.com

situation, which is not included in its plan, at approximately ¥10.0bn, primarily affecting +65 6495 6860

the materials segment, but noted that this could be offset by outperformance in other

businesses.

Petrochemical derivatives restructuring at the Mizushima plant likely a

medium-term positive

The company plans by 2030 to cease production of styrene monomer and polyethylene,

and restructure, including through production cuts, operations in acrylonitrile and

polycarbonate diol, a urethane raw material. While no impairment losses on equipment

are expected as a result, removal costs appear likely to amount to several tens of billions

of yen by FY3/31. We believe the company's focus on increasing the business mix share

of non-petrochemical materials businesses such as healthcare, housing, and electronics

is a positive, as it will likely lead to reduced portfolio volatility.

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