We like competitiveness in inks and growth potential of chemitronics

Research evidence excerpt

We like competitiveness in inks and growth potential of chemitronics

Global Markets Research

16 June 2026DIC

4631.T 4631 JP / EQUITY: JAPAN CHEMICALS & TEXTILES

RatingWe like competitiveness in inks and growth

Remains Buypotential of chemitronics

Target price

Increased from 5,500 JPY 6,000Spreads on inks look set to improve in 26/12

Closing price JPY 5,030We reiterate our Buy rating; recommend DIC as our top pick 15 June 2026

We reiterate our Buy rating on DIC. DIC is our top pick among ink manufacturers in view

Implied upside +19.3%of its competitiveness in inks and the growth potential of its chemitronics business. We

raise our 26/12 outlook for ink spreads (selling prices minus input costs) and the functional

products segment's chemitronics business in the wake of US President Trump's 15 Jun

announcement of an agreement to end the conflict with Iran. We raise our operating profit

Relative performance chartforecasts for 26/12 onward and hike our target price to ¥6,000, which we obtain by

multiplying our 26/12 EPS forecast of ¥474 by a P/E of around 12.5x. Because we now

see EPS CAGR at just below 4%, up from 2% previously, we narrow the discount we

apply to the Russell/Nomura Large Cap (ex financials) average, which we use as a

benchmark, to 30% (from 40% previously).

26/12: Raising our forecasts, mainly for inks and chemitronics

We raise our 26/12 operating profit forecast by ¥3.7bn to ¥73.3bn (up 40% y-y). At the

packaging & graphic segment, we now forecast a 15% y-y rise in ink input costs, down

from 20% previously (we retain our forecast for a 20% rise in ink prices). For the functional

products segment's chemitronics business, we raise our operating margin forecast to

reflect mix improvements stemming from expanded sales of high-margin epoxy resins and