Sugi Holdings (7649) 1Q FY2/27: Slightly above our estimate, broadly in line with consensus

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Sugi Holdings (7649) 1Q FY2/27: Slightly above our estimate, broadly in line with consensus

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Sugi Holdings (7649)

1Q FY2/27: Slightly above our estimate,

broadly in line with consensus

Reiterate Rating: BUY | PO: 3,800 JPY | Price: 3,178 JPY

¥0.3bn short of company plan 09 July 2026

1Q FY2/27 (Mar-May) operating profit rose 10.9% YoY to ¥12.2bn, above our ¥11.5bn Equity

estimate and broadly in line with consensus (¥12.0bn, Bloomberg consensus of eight

analysts). Results were ¥0.3bn below the company plan.

Key Changes

Third-party allotment announced; 2.67% dilution (¥) Previous Current

Alongside its results, the company announced the issuance of new shares through a Price Obj. 4,330.00 3,800.00

third-party allotment. The number of new shares to be issued is 5.082mn (2.67% of total 2027E Rev (m) 1,107,500.0 1,105,000.0

issued shares), the amount of funds to be procured is ¥16.0bn, and the issue price is 2028E Rev (m) 1,247,600.0 1,237,600.0

¥3,195/share (July 9 closing price: ¥3,178). The scheduled allottee is GIC Private Limited. 2029E Rev (m) 1,317,800.0 1,307,800.0

Although this will result in some dilution, the company views the transaction as 2027E EPS 182.01 161.69

reasonable, as it should enable the company to secure funding necessary to execute its 2028E EPS 205.24 181.83

new Medium-Term Plan (MTP), procure funds in an agile manner, and build a strategic 2029E EPS 230.65 205.41

long-term partnership.

Arashi Nishizawa >>

We lower estimates and revise our PO to ¥3,800 ResearchBofAS JapanAnalyst

Although 1Q results exceeded our estimate, we lower our estimates to reflect the +81 3 6225 6402

arashi.nishizawa@bofa.com

possibility that the gross profit margin may not improve as much as we had previously

Daisuke Aikawa >>