Cement Industry: Earnings model update: Domestic demand continues to slump; focusing on growth at other businesses

Research evidence excerpt

Cement Industry: Earnings model update: Domestic demand continues to slump; focusing on growth at other businesses

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

13 July 2026

Cement Industry

Earnings model update: Domestic demand continues to

slump; focusing on growth at other businesses

We update our earnings forecasts for two cement companies. We maintain our Japan Equity Research

Overweight rating on Sumitomo Osaka Cement (SOC) and raise our price target

Technology - Semiconductor/

from ¥4,600 by December 2026 to ¥6,500 by December 2027. We also maintain Technical Materials

our Overweight rating on Taiheiyo Cement (TCC) and raise our price target from AC Mio Shikanai

¥4,500 by December 2026 to ¥5,000 by December 2027. In their domestic cement

(81-3) 6736 1313

operations, the two companies are facing not only an ongoing slump in demand, mio.shikanai@jpmorgan.com

but rising costs as well, and they have planned their next price revisions (+¥3,000/ Junya Ayada

ton, +15-20%), to go into effect in FY2027. For now, we are focusing our attention (81-3) 6736 8631

on cost reduction efforts and trends at businesses other than domestic cement junya.ayada@jpmorgan.com

(electrostatic chucks at SOC, overseas cement at TCC). The medium-/long-term JPMorgan Securities Japan Co., Ltd.

earnings outlook is improving for SOC in particular, as we expect demand for

electrostatic chucks to increase amid intensifying investment by semiconductor

chip manufacturers.

• Sumitomo Osaka Cement (5232, Overweight): Medium-/long-term

earnings outlook improving on expansion of electrostatic chuck demand:

Domestic cement demand is weak, but SOC plans to increase prices by an

additional ¥3,000/ton in FY2027 (from 2022 to this point, it has implemented

a total of ¥7,000/ton in price increases).