Taiyo Yuden (6976) 1Q results: Below consensus in 1Q, but FY2026 guidance raised sharply, in part on assumption of weaker yen

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

05 August 2026

Taiyo Yuden (6976)

1Q results: Below consensus in 1Q, but FY2026

guidance raised sharply, in part on assumption of

weaker yen

Overweight

6976.T, 6976 JP

Price (05 Aug 26):¥11,165

Price Target (Dec-26):¥22,500

Mix of positives and negatives, but somewhat positive overall: 1Q operating

profit of ¥4.8 billion was in line with guidance and our estimate but below the

Bloomberg consensus estimate. However, Taiyo Yuden raised FY2026 guidance

sharply, due mainly to a change in forex assumptions (USD/JPY from ¥155 to

¥160) and a slower pace of price declines. At a USD/JPY rate of ¥155, guidance

would be in line with the consensus. We see a mix of positives and negatives, but

have a somewhat positive impression overall as we expect substantial earnings

improvement from 2Q.

Earnings: 1Q operating profit of ¥4.8 billion was in line with guidance and our

estimate but below the Bloomberg consensus estimate of ¥6.9 billion. Taiyo

Yuden raised FY2026 guidance from sales of ¥384 billion and operating profit

of ¥30 billion to sales of ¥424 billion and operating profit of ¥45 billion

(changing its USD/JPY assumption from ¥150 to ¥160; 1Q guidance was

¥155). Taiyo Yuden said 1Q operating profit was in line with its target (which

we estimate at ¥4.5–5.0 billion), but logistics disruptions and operational

constraints resulting from labor-management talks at the South Korean plant

had a roughly ¥4 billion negative impact on sales. Operating profit was in line

with guidance due to the roughly ¥1 billion impact of a weaker yen compared

with guidance, a slower pace of price declines, and only modest growth in fixed

costs (which rose just ¥800 million QoQ versus guidance for +¥2.5

billion). Taiyo Yuden had planned to increase inventory by ¥1.5 billion in 1Q,

but logistics disruptions and other factors resulted in no increase in 1Q. In 2Q,

Taiyo Yuden guides for companywide sales to grow 15–19% QoQ (assuming

¥160/$), an operating margin of 10% or higher, inventory growth of ¥1 billion,

and fixed cost growth of ¥3.5 billion. It raised FY2026 guidance for sales by

¥40 billion and operating profit by ¥15 billion.…