Reassessment of ceramic components for SPE: Company sees growth potential, plans to invest ¥80bn, might build new plant

Research evidence excerpt

Reassessment of ceramic components for SPE: Company sees growth potential, plans to invest ¥80bn, might build new plant

Global Markets Research

6 July 2026Toto

5332.T 5332 JP / EQUITY: JAPAN HOUSING & REAL ESTATE

RatingReassessment of ceramic components for SPE Remains Neutral

Target price

Company sees growth potential, plans to invest ¥80bn, might build new Increased from 5,430 JPY 8,180

plant

Closing price JPY 8,586We remain Neutral, raise target price on reassessment of ceramic components 3 July 2026

We raise our earnings forecasts for Toto for 28/3 onward, primarily for SPE components,

Implied upside -4.7%and also raise our target price to reflect improved stock market valuations and longer-term

growth prospects for ceramic parts for SPE. We still value core housing fixtures and

ceramic components for SPE separately, but roll forward the base year for our target price

calculation to 28/3. We expect the operating profit split in 28/3 to be 48% housing fixtures,

Relative performance chart52% ceramic components, and value the former on a P/E of 10x (previously 11x on 27/3

forecasts) and the latter on a P/E of 35x (previously 25x on 27/3 forecasts), yielding an

overall fair-value P/E of 23x (previously 19.4x on 27/3 forecasts). Applying approximately

this multiple to our 28/3 EPS forecast of ¥355.8 yields our new target price of ¥8,180

(¥355.8×23x). We maintain our Neutral rating.

Potential for concrete investment in ceramics, where growth prospects are high,

from 28/3 onward

Toto manufactures fine ceramics using technologies developed in sanitaryware and

plumbing fixtures. Mainstay products include electrostatic chucks for memory production

equipment and aerosol deposition (AD) materials for logic production equipment,