Nitto Denko (6988.T): Q1 results positive, upside potential to upwardly revised guidance

Research evidence excerpt

Nitto Denko (6988.T): Q1 results positive, upside potential to upwardly revised guidance

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28 Jul 2026 07:31:54 ET │ 10 pages

Nitto Denko (6988.T)

Q1 results positive, upside potential to upwardly revised guidance

CITI'S TAKE

Buy Both results and guidance beat expectations, positive for the stock

price. Q1 OP of ¥49.2bn beat consensus of c¥45bn. The ¥9.2bn beat Price (28 Jul 26 15:30) ¥3,446.0

versus internal expectations comprised roughly -¥2bn from the impact of Target price ¥3,700.0

the Middle East situation, +¥7bn from volume (positive from North Expected share price return 7.4%

American smartphone-related, HDD-related, and semiconductor-related Expected dividend yield 1.9%

areas; negative from notebook PC and tablet-related areas), and +¥4bn Expected total return 9.2%

from forex. Full-year guidance was revised upward from ¥193bn to

Market Cap ¥2,288,955M ¥200bn (consensus ¥192.5bn), with the ¥7bn increase comprising -

US$13,978M ¥9.3bn from selling prices/purchase prices/rationalization (mainly -¥10bn

from the Middle East situation), +¥3bn from sales volume (product-

specific increases/decreases mirroring Q1 beats/misses), and +¥13.9bn

from forex. Yuta NishiyamaAC

+81-3-6776-4643

Implications — While the impact of the Middle East situation was ¥2.1bn in Q1 yuta.nishiyama@citi.com

results and is expected to be ¥10bn according to full-year guidance, we see upside

potential, as additional price pass-throughs and rationalization efforts are not yet

priced in. We had concerns about potential difficulties in optronics price pass-

throughs amid soaring memory prices, but there appear to be no major issues. We

also had concerns about a significant demand spike occurring in Q1, but

management explained that while there may have been some pulled-forward