Meiji Holdings (2269) 1Q results: On track to reach guidance; pharma gross margin above expectations, key food categories also solid

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

06 August 2026

Meiji Holdings (2269)

1Q results: On track to reach guidance; pharma gross

margin above expectations, key food categories also

solid

Overweight

2269.T, 2269 JP

Price (05 Aug 26):¥3,610

Price Target (Dec-26):¥4,700

Positive: 1Q FY2026 operating profit was up 28% YoY to ¥22.7 billion, well above

the Bloomberg consensus estimate of ¥20 billion (our forecast: ¥17.4 billion).

Results were strong in overall terms, with key food categories solid and the

pharmaceutical product mix improving. Cost increases from the Middle East

conflict will emerge from 2Q. However, we believe strong pharmaceuticals,

together with measures such as price increases and product specification revisions,

leave earnings more likely to meet FY2026 operating profit guidance of ¥100

billion (our forecast: ¥99 billion; Bloomberg consensus: ¥99.9 billion).

Strong food sales: Food operating profit was up 11% YoY to ¥15.1 billion,

slightly above our forecast of ¥14.6 billion. Structural reforms in China and

higher sales in key categories offset rising costs. Sales were solid: probiotic

yogurt rose by 4% YoY, chocolate by 9%, protein powder by 12%, and protein

drinks by 16%. We expect solid sales to continue, driven by a narrower price

gap against competing products, new product launches, and stronger

marketing. Management flagged the risk of roughly ¥8–9 billion in upside for

costs versus FY2026 guidance, mainly in whey and packaging materials, but

plans to absorb it through higher sales, redesigned products, and price

revisions. Meiji is making steady progress with its review of unprofitable

businesses, announcing its exit from the domestic frozen food business,

following July's announced transfer of its China business (dairy and

foodservice).

Japan Equity Research

Food, Beverage, and Tobacco

Satoshi Fujiwara AC

(81-3) 6736-8652

Hideto Takahashi

(81-3) 6736-8638

Biotechnology & Pharmaceuticals/

Medical Technologies & Services

Yugo R. Kamimura, Ph.D. AC

(81-3) 6736-8635

Seiji Wakao, Ph.D. AC

(81-3) 6736-8612

JPMorgan Securities Japan Co., Ltd.

Pharmaceuticals well above our forecast on high gross margin:

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