27/2 Q1 results: Strong performance excluding consolidated adjustments

Research evidence excerpt

27/2 Q1 results: Strong performance excluding consolidated adjustments

Global Markets Research

16 July 2026Toho

9602.T 9602 JP / EQUITY: JAPAN GAMES & AMUSEMENT

Rating27/2 Q1 results: Strong performance excluding

Remains Neutralconsolidated adjustments

Target price

Earnings ahead of our forecasts on underlying basis, but we note decline Reduced from 1,510 JPY 1,490

in 27/2 profit outlook

Closing price JPY 1,345.0We remain Neutral, underlying earnings were strong but profit outlook for 27/2 has 15 July 2026

declined

In 27/2 Q1 (Mar–May), operating profits came in at ¥13.9bn, sharply short of our ¥18.9bn Implied upside +10.8%

forecast, reflecting recognition of some overseas earnings being pushed back owing to

consolidated adjustments at the IP & anime segment. Excluding this factor, underlying

operating profits came in at ¥19.9bn, beating our forecast. However, because of a change

in the fiscal year-end, only 10 months' worth of these revenues will be booked in 27/2, Relative performance chart

lowering the profit outlook for 27/2. Our overall impression of the results is that they are in

line with our expectations. We lower our 27/2 operating profit forecast to reflect timing

issues and only fine-tune our forecasts for 28/2 onwards. Our near-term focus is on box

office revenues from the Chiikawa movie and whether the Haikyu!! mobile game

becomes a hit.

Key points regarding 27/2 Q1 (Mar-May) results and our forecasts

(1) IP & anime segment: Q1 operating profits of ¥500mn undershot our forecast of

¥5.5bn. This was due to consolidated adjustments related to the spinoff carried out in

March, and excluding this factor, operating profits of ¥6.5bn were ahead of our forecast on

an underlying basis. We attribute this to the booking of overseas streaming revenues for