Nippon Yusen (9101) 1Q results: Some leeway appears to remain in 2H

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

05 August 2026

Nippon Yusen (9101)

1Q results: Some leeway appears to remain in 2H

Neutral

9101.T, 9101 JP

Price (05 Aug 26):¥5,798

Price Target (Dec-26):¥5,900

Neutral: On July 30, Nippon Yusen raised its FY2026 recurring profit guidance

from ¥185 billion to ¥250 billion (+18.4% YoY). On August 5 (today), the

company increased its DPS target from ¥200 to ¥240 in line with its policy of a 40%

dividend payout ratio and a minimum dividend of ¥200. Regarding cash flow

allocation, the company did not change the ¥110 billion management allocation

budget for the FY2023-26 medium-term business plan, taking into account the

upward earnings revision and the tender offer for NS United. It intends to consider

how to use this ¥110 billion with an open mind after identifying investment

opportunities.

Results overview: Management had anticipated a negative impact of about

¥20 billion on recurring profit from the situation in the Middle East due to

higher fuel prices and lower automobile transport volumes to the region, but the

actual impact apparently did not reach that high. Regarding crude oil, actual

prices were lower than it expected due to FIFO accounting and the company

was able to pass on costs. Although automobile transport volumes were on par

with those in the same period last year, transport efficiency deteriorated,

resulting in a negative impact on earnings as expected. Updated guidance

assumes that tensions in the Middle East will be heightened, that the closure of

the Strait of Hormuz will continue through the end of September 2026

(previously it assumed this would be through end-June), and that the Cape of

Good Hope route will remain in use during the fiscal year.

Results overview: By segment, updated full-year guidance includes recurring

profit up ¥36.9 billion YoY to ¥83.0 billion in liners (previous guidance: ¥49.0

billion; Ocean Network Express (ONE) raised its full-year after-tax profit

guidance from $300 million to $900 million, up $562 million YoY); down

¥10.4 billion to a ¥1.0 billion loss in logistics (previous guidance: a ¥1.0 billion

loss, revised downward due to higher costs for business expansion); down

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