Ajinomoto (2802): Electronic Materials Briefing: ABF above plan; AI mix surging (memo attached)

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Ajinomoto (2802): Electronic Materials Briefing: ABF above plan; AI mix surging (memo attached)

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Ajinomoto (2802)

Electronic Materials Briefing: ABF above

plan; AI mix surging (memo attached)

Reiterate Rating: NEUTRAL | PO: 6,200 JPY | Price: 5,873 JPY

Electronic Materials (ABF) briefing held 30 June 2026

An explanatory meeting on the Electronic Materials (ABF) business was held from 13: 00 Equity

on June 30. The content was positive overall. Specifically: (1) current ABF demand

continues the momentum seen last year and is progressing ahead of plan; (2) the

Key Changesproduct mix related to AI is expected to exceed 50% soon; (3) there remains spare

production capacity; and (4) growth potential was highlighted in new areas and (¥) Previous Current

peripheral materials. Price Obj. 5,000.00 6,200.00

2027E EPS 142.63 147.12

Regarding (2), at the May earnings briefing management had indicated that the AI- 2028E EPS 162.72 178.17

related sales mix was 15–20% for FY3/26, but the meeting pointed to a rapid increase 2029E EPS NA 215.09

from that level. While management did not provide a specific timeline for this growth, 2027E EBITDA (m) 296,500.0 299,100.0

semiconductor generational shifts appear to be progressing on a 1–2-year cycle, 2028E EBITDA (m) 322,300.0 337,900.0

suggesting that margin improvement can also be expected in the near term. 2029E EBITDA (m) NA 382,900.0

Raising earnings forecasts and price objective 2027E DPS 64.18 0

Reflecting the Electronic Materials briefing, we raise Functional Materials sales growth Manabu Sumoge >>

to +35% for FY3/27 (from +30%) and +35% for FY3/28 (from +20%). Consolidated Research Analyst

BofAS Japan

business profit forecasts are revised by +1% and +7%, respectively. +81 3 6225 8855

manabu.sumoge@bofa.com