Nippon Paper Industries Corp (3863) Medium-term business plan briefing: Strong commitment to raising the operating margin

Research evidence excerpt

Nippon Paper Industries Corp (3863) Medium-term business plan briefing: Strong commitment to raising the operating margin

J P M O R G A N Asia Pacific Equity Research

28 May 2026

Nippon Paper Industries Corp

(3863) Underweight

3863.T, 3863 JP

Medium-term business plan briefing: Strong Price (28 May 26):¥1,367

commitment to raising the operating margin Price Target (Dec-26):¥1,040

On May 28, Nippon Paper Industries held a briefing about its new medium-term Japan Equity Research

business plan, which covers the period from FY2026 through FY2030. The plan

Cosmetics and Personal Care /

confirms management’s strong commitment to implementing structural reforms Paper and Packaging

and raising the operating margin. However, uncertainty in the business AC Akiko Kuwahara

environment remains high. We are concerned that the accident at the US

(81-3) 6736-8617

subsidiary’s plant on May 26 could also affect cash flow during the medium-term akiko.kuwahara@jpmorgan.com

plan. We think it is difficult to take a more aggressive investment stance on the JPMorgan Securities Japan Co., Ltd.

company based solely on this medium-term plan. We will closely monitor the pace

of structural reforms and improvements in the operating margin.

• Summary of management’s explanations for key issues: 1) Reason for

targeting operating margin of 5% and ROE of 8% in FY2030: The hurdle for

achieving the ROE target is not low. Management recognizes the need to raise

the operating margin above 5%. The most important KPI is the operating

margin. 2) The financing planned for FY2026-30, excluding strategic

investments, does not differ significantly from the previous medium-term plan

(FY2021-25); is this sufficient in light of inflation and the need to prevent