Forecast update: We lower profit forecasts for 26/12 onwards: Awaiting better prospects for organic growth

Research evidence excerpt

Forecast update: We lower profit forecasts for 26/12 onwards: Awaiting better prospects for organic growth

Global Markets Research

17 June 2026Lion

4912.T 4912 JP / EQUITY: JAPAN TOILETRIES & COSMETICS

RatingForecast update: We lower profit forecasts for

Remains Neutral26/12 onwards

Target price

Reduced from 1,800 JPY 1,780Awaiting better prospects for organic growth

Closing price JPY 1,673.5We retain Neutral rating, see higher barriers to achieving medium-term plan targets 16 June 2026

The consolidation of Merap and PNB should provide an inorganic boost to profits at Lion

Implied upside +6.4%through 27/12, but we think its 27/12 target for business profits looks increasingly

challenging because of issues with organic earnings growth. The current easing of the

conflict in the Middle East may reduce the negative impact on input prices, but we think

any increase in share price valuations will hinge on improved expectations for profit growth

Relative performance chartover the medium term via synergies with acquisitions or prospects for organic growth. We

retain our valuation methodology and, having revised our forecasts, obtain our target price

of ¥1,780 using a P/E of roughly 22x (unchanged) our 26/12 EPS forecast.

26/12: Weak sales momentum in Japan and overseas making it tough to absorb

input cost increases

We revise our forecasts to reflect the increase in costs at the consumer products business

in Japan seen in 26/12 Q1. We think weak sales outside of oral care and new time-saving

fabric care products will make it difficult for the company to offset rising input costs from

Q2 onwards. We retain our profit forecasts for overseas operations but this is due to

revising our forex assumptions in the direction of a weaker yen, and we lower our sales