Nippon Paper Industries (3863): Briefing: Focus on price hikes and structural reform benefits

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Nippon Paper Industries (3863): Briefing: Focus on price hikes and structural reform benefits

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Nippon Paper Industries (3863)

Briefing: Focus on price hikes and

structural reform benefits

Maintain Rating: NEUTRAL | PO: 1,500 JPY | Price: 1,450 JPY

Middle East conflict impact: Plans to pass through costs 15 May 2026

Key focus points during the 15 May briefing were the impact of the Middle East conflict, Equity

the outlook for Opal, and domestic price hikes. The FY3/27 earnings outlook is weak, but

Kyoji Chiba >>

as we expect companywide earnings to improve due to overseas structural reforms and Research Analyst

domestic price hikes, we maintain our Neutral rating. BofAS Japan kyoji.chiba@bofa.com

Briefing Q&A summary TakashiResearch EnomotoAnalyst >>

Middle East conflict impact: Guidance factors in a negative profit impact of ¥7.0bn BofAS Japan takashi.enomoto@bofa.com

(overseas ¥1.5bn, domestic ¥5.5bn). Nippon Paper expects to respond first mainly via

cost pass-through rather than fundamental structural reforms. It is coordinating with

suppliers on a multi-month basis to address supply risk for petrochemical raw materials,

and currently has no concerns about the impact on production and other operations. Stock Data

Overseas outlook for daily-life products: Nippon Paper expects Opal to incur a loss again Price 1,450 JPY

in FY3/27, but aims to achieve profits in the integrated containerboard and corrugated Price Objective 1,500 JPY

products business in 2027. It is working to reduce fixed costs (e.g., headcount reductions) Date Established 8-May-2026

and optimize the production structure. It is also considering the reorganization of Investment Opinion B-2-7

unprofitable business.