SUGI HOLDINGS (7649): 1Q FY2/27 results: Core business somewhat weak; positive long-term impression of issuing new shares to GIC’s strategic investment unit

Research evidence excerpt

SUGI HOLDINGS (7649): 1Q FY2/27 results: Core business somewhat weak; positive long-term impression of issuing new shares to GIC’s strategic investment unit

J P M O R G A N Asia Pacific Equity Research

10 July 2026

SUGI HOLDINGS (7649)

1Q FY2/27 results: Core business somewhat weak; Overweight

positive long-term impression of issuing new shares to 7649.T, 7649 JP

GIC’s strategic investment unit Price (09 Jul 26):¥3,178

Price Target (Dec-26):¥3,800

Somewhat negative: 1Q operating profit grew 10.9% to ¥12.2 billion, in line with Japan Equity Research

our estimate of ¥12.1 billion and the Bloomberg consensus estimate of ¥11.9

Retail

billion. The shortfall in product sales gross profit is a concern. However, Sugi

Holdings announced a capital increase via private placement of new shares to GIC. Dairo Murata AC

The issue price is ¥3,195 per share (a 10% discount from the July 8 closing price), (81-3) 6736 8620

dairo.murata@jpmorgan.com

the total issuance amount is around ¥16 billion, and the number of issued shares is

Ami Terai

16,237 million. Sugi’s KPI targets in the medium-term plan announced in April (81-3) 6736-8660

are unchanged. ami.terai@jpmorgan.com

• 1Q results: Consolidated sales grew 10.1%, the gross margin was 30.8%, costs Kazuha(81-3) 6736-8614Matsuo

rose 10.1%, and operating profit was ¥12.2 billion. We forecast sales growth kazuha.matsuo@jpmorgan.com

of 8.7%, gross margin of 31.2%, and cost growth of 10.2%. Sales growth and JPMorgan Securities Japan Co., Ltd.

operating profit were above our estimates, the gross margin was below, and

costs were in line. A gross profit breakdown shows the dispensing business

remained strong, due mainly to the acquisition of high-priced dispensing. The

product sales business missed guidance, due mainly to consumers becoming