Facing Tough YoY Comps, but On-Track; Maintain Buy

Research evidence excerpt

Facing Tough YoY Comps, but On-Track; Maintain Buy

- Peer Valuation (As of 5/12/2026)•

although execution may depend on market volatility, which could reduce effectiveness. 25.0

22.5 22.7

20.4• AI exposure: We view Otsuka as largely AI-neutral. 20.0 18.6 19.2

16.9

We note that FY26 guidance does not appear conservative, which we believe is already 15.0 13.3 15.3

11.6reflected in market expectations. That said, Otsuka has a track record of incentivizing its sales

force upon achieving targets, which supports execution towards company guidance. 10.0

FY12/26 Earnings Update: 5.0

0.0

. SHIFT TIS BayCurrent Otsuka Trend Micro Fujitsu NRI IIJ Obic

We have updated our model to incorporate Q1 results. We slightly trim our Q2 estimates Source: Jefferies, Factset

following the strong Q1 performance, and expect Otsuka to aim to deliver its H1 company

Chart 1 - Stock Performance Index - Otsukaguidance. We modestly raise our H2 sales forecast to -1% YoY, although this remains below Corp

company guidance of -0.9%. 210

150In Q1, Otsuka underperformed its internal GIGA School earnings target; however, robust

contributions from OSM (Otsuka Security Management), which delivered 49.1% YoY sales 12090

growth, more than offset the shortfall. While the sustainability of this high growth in security 6030

solutions remains uncertain, we view this as a key theme for FY26. 0Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Jul-24 Oct-24 Jan-25 Apr-25 Jul-25 Oct-25 Jan-26 Apr-26

. Otsuka Index Topix Index

Encouragingly, cybersecurity solutions typically carry higher margins than other offerings and Source: Jefferies, Factset

should support an improvement in product mix. Notably, management indicated in the IR

meeting that they are already seeing 30–40% price increases on certain hardware products.