Rengo (3941): Briefing: Overseas improvement and domestic price hikes are key in FY3/27

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Rengo (3941): Briefing: Overseas improvement and domestic price hikes are key in FY3/27

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Rengo (3941)

Briefing: Overseas improvement and

domestic price hikes are key in FY3/27

Maintain Rating: BUY | PO: 1,400 JPY | Price: 1,396 JPY

Watch Europe recovery after downturn in FY3/26 22 May 2026

Key focus points during the 22 May briefing included efforts to achieve medium-term Equity

targets, outlook for overseas business, and thoughts on capital policy. We maintain our

Kyoji Chiba >>

Buy rating, based on continued profitability improvement from corrugated product price Research Analyst

hikes and aggressive shareholder returns. BofAS Japan kyoji.chiba@bofa.com

Briefing Q&A summary TakashiResearch EnomotoAnalyst >>

Thoughts on FY3/31 operating profit target of ¥70bn: Rengo’s target is unchanged BofAStakashi.enomoto@bofa.comJapan

despite the roughly ¥10bn cost impact of the Middle East conflict in FY3/27. Rengo

expects improvement in overseas business to lift profits by more than ¥7bn YoY in

FY3/27, and it aims to improve domestic business further by focusing more on quality

Stock Datathan quantity based on price revisions that have taken hold.

Overseas: FY3/26 losses were due mainly to slow pass-through of higher base paper Price 1,396 JPY

costs in Europe and a decline in volume. In FY3/27, Rengo expects profits to increase by Price Objective 1,400 JPY

more than ¥7bn YoY due to a recovery in Germany, staff deployment to local operations, Date Established 8-May-2026

and two-shift operations at a new plant. However, given that the overseas business Investment Opinion B-1-7

purchases and processes base paper, the time lag for passing the recent increase in base 52-Week Range 725-1,565 JPY

paper costs through to product prices needs to be considered.