1Q Briefing Takeaways: Enhanced Returns on Improved Earnings Visibility

Research evidence excerpt

1Q Briefing Takeaways: Enhanced Returns on Improved Earnings Visibility

Japan | Basic Materials

Tokai Carbon EquityMayResearch14, 2026

FLASH NOTE1Q Briefing Takeaways: Enhanced Returns on

RATING HOLDImproved Earnings Visibility

PRICE ¥1,557^

Tokai Carbon announced its 1Q results on May 13 and held a briefing today

(10:00 JST). Shares rose 17% (TOPIX flat) to a YTD high on 1Q upside, PRICE TARGET | % TO PT ¥1,050 | -33%

a full-year upgrade, and enhanced returns. Strength was driven by S&L 52W HIGH-LOW ¥1,564 - ¥878

cathode relining demand tied to Middle East smelter restarts and a recovery FLOAT (%) | ADV MM (USD) 89.6% | ¥2.64B

in memory semiconductors in Fine Carbon. The company raised guidance MARKET CAP ¥332.3B | $2.1B

and boosted returns via a dividend hike, progressive policy, buybacks, and TICKER 5301 JP ^Prior trading day's closing price unless otherwise

cross-shareholding reductions. noted.

1Q Results: Mixed earnings with EBITDA resilience. Revenue rose 1.7% YoY, supported

by recovery in memory semiconductor-related demand (solid SiC focus rings) and license

income in the Smelting & Lining (S&L) segment, offsetting weaker carbon black volumes

and portfolio changes in graphite electrodes. OP declined -8.9% YoY due to margin pressure

from higher depreciation in carbon black (new Thailand plant) and weak demand for SiC

power semiconductor products. By segment, Fine Carbon delivered solid top-line growth driven

by memory-related products, albeit with margin contraction, while S&L saw strong profit

expansion on license income from RuC (Ready-to-Use Cathodes) in China and improving

demand. Graphite electrodes returned to profitability on restructuring effects despite a weak

pricing environment, whereas carbon black recorded a sharp profit decline due to volume