Mitsubishi Gas Chemical (4182): Lift PO; AI-related materials and methanol to drive earnings growth; reiterate Buy

Research evidence excerpt

Mitsubishi Gas Chemical (4182): Lift PO; AI-related materials and methanol to drive earnings growth; reiterate Buy

Short-term view

• Primary price increases for T-glass cloth-based products, estimated to account for

about 30% of BT materials, and a second round of hikes (+30% estimated) across

all products in March 2026 to contribute to FY3/27 earnings. Growth in RS-grade BT

materials, expected to be adopted in GPUs, also warrants attention. Company

guidance for BT materials appears conservative relative to price increases and

volume growth prospects, implying upside to earnings.

• Improving volume outlook for semiconductor chemicals on the back of robust

semiconductor markets including CPUs. Strong Korean subsidiaries are likely to

drive earnings, while recovery is also expected in US and Taiwan operations, where

volume growth had been sluggish.

• Methanol prices are surging due to supply concerns related to a potential Hormuz

Strait closure and higher energy markets. Production at the Saudi Arabia site is

expected to decline due to export constraints, negatively impacting earnings, while

shipments from Trinidad and Tobago, Venezuela, and Brunei should benefit from

higher prices. In addition, methanol trading operations are expected to support

earnings at the parent level. Higher energy prices at the Niigata gas field also

provide upside. Despite lower petrochemical volumes, the company is likely to

benefit overall from stronger energy markets.

• A management briefing is scheduled for June 5, 2026. Focus is on the stance toward

capacity expansion in AI-related materials, including BT materials and

semiconductor chemicals.

Medium/long-term view

• Demand related to AI servers will drive earnings. Improvements are expected in BT