Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

RiskRisk RewardReward– Rohto-PharmaceuticalRohto Pharmaceutical(4527.T) (4527.T)

Balanced domestic and overseas earnings growth relatively reassuring

PRICE TARGET ¥3,150 OVERWEIGHT THESIS

Adjusted F3/28e EPS ¥168 x P/E 19x (adjusted EPS excludes amortization of We see a strong likelihood that Rohto will

goodwill/intangible assets). continue to achieve stable profit growth,,

Target P/E is in-line with cosmetics & household products industry average P/E of 19x, both in Japan and overseas. We believe

considering for limited potential for significant acceleration in earnings growth, though we Rohto is relatively well-positioned to benefit

appreciate the outlook for steady earnings growth to continue in Japan/overseas and the from tailwinds up until consumer sentiment

firm's high-quality offerings. enters a recovery period. As for F3/27

guidance, we think there is still upside to

¥2,951 sales targets, as the company plans to invest

Consensus Price Target Distribution ¥2,300.00 ¥3,400.00 actively in marketing, especially in Asia.

MS PT However, we think it is possible that not all

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates of this budget will be used in the end.

RISK REWARD CHART Consensus Rating Distribution

73% Overweight

JPY 27% Equal-weight

0% Underweight

¥3,900¥3,900(+65.89%)¥3,900(+65.89%)(+65.89%) MS Rating

Source: Refinitiv, Morgan Stanley Research

¥3,150¥3,150(+33.99%)¥3,150(+33.99%)(+33.99%)

3000 Risk Reward Themes

¥2,351¥2,351¥2,351 Secular Growth: Positive

2000 View descriptions of Risk Rewards Themes here

¥2,150¥2,150(-8.55%)¥2,150(-8.55%)(-8.55%)

JUN '25 DEC '25 JUN '26 JUN '27

Key: Historical Stock Performance Current Stock Price Price Target

BULL CASE ¥3,900 BASE CASE ¥3,150 BEAR CASE ¥2,150