Nippon Paint Holdings (4612): Briefing: Input cost inflation; profitability intact, volume a concern

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Nippon Paint Holdings (4612): Briefing: Input cost inflation; profitability intact, volume a concern

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Nippon Paint Holdings (4612)

Briefing: Input cost inflation; profitability

intact, volume a concern

Maintain Rating: NEUTRAL | PO: 1,070 JPY | Price: 999 JPY

15 May 2026

1Q stronger than expected; maintains guidance - positive Equity

1Q OP of ¥70.9bn exceeded our estimate of ¥67.0bn and consensus of ¥67.6bn. Versus

our forecast, strength in China (¥24.2bn vs. ¥20.4bn) and Oceania (¥9.3bn vs. ¥7.5bn) Takashi Enomoto >>

offset weakness at specialty formulator AOC (¥14.3bn vs. ¥15.9bn). The company ResearchBofAS JapanAnalyst

maintained full-year guidance. While we had expected a downward revision due to input +81 3 6225 8362

cost inflation, management indicated that higher raw material costs are likely to be takashi.enomoto@bofa.com

largely offset by price pass-through and cost reduction efforts over the full year, and NiimaResearchKomuraAnalyst>>

expressed confidence in achieving guidance at the briefing (from p.3 onward). This is BofAS Japan

+81 3 6225 7725

viewed positively. niima.komura@bofa.com

We expect impact of higher input costs to appear more in KyojiResearchChibaAnalyst>>

BofAS Japan

+81 3 6225 7189volume than margins

kyoji.chiba@bofa.com

Peers have also shown strong willingness to pass on higher raw material costs,

suggesting a high likelihood that negative effects will be offset by pricing and cost

reductions. Meanwhile, concerns over demand softness due to higher paint prices are

rising, and we believe the current cost inflation is more likely to materialize as a Stock Data

slowdown in volumes rather than margin pressure. Maintain Neutral. Price 999 JPY

Estimates (¥) 12/24A 12/25A 12/26E 12/27E 12/28E Price Objective 1,070 JPY