F3/27 1Q Results: Weak Start as Firm is Unable to Pass Through Higher Raw Material and Fuel Costs

Research evidence excerpt

F3/27 1Q Results: Weak Start as Firm is Unable to Pass Through Higher Raw Material and Fuel Costs

Update

July 29, 2026 05:24 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MTokuyama (4043) | Japan Ryoichi Watanabe

Equity Analyst

F3/27 1Q Results: Weak Start as Ryoichi.Watanabe@morganstanleymufg.comTakato Watabe +81 3 6836-8929

Takato.Watabe@morganstanleymufg.com +81 3 6836-5436

Firm is Unable to Pass Through Kayoko Shoji

Research Associate

Kayoko.Shoji@morganstanleymufg.com +81 3 6836-5437

Higher Raw Material and Fuel Kano Fujita

Kano.Fujita@morganstanleymufg.com +81 3 6836-8932

Costs

AlphaSignals Earnings Reaction

Unchanged Meaningful shortfall Modest revision lower

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS Tokuyama (4043.T, 4043 JT)

Source: Company data, Morgan Stanley Research Fine Chemicals | Japan

Stock Rating Overweight

Industry View In-Line

Key Takeaways Price target ¥6,300

Shr price, close (Jul 28, 2026) ¥4,312

1Q OP came to ¥6.1bn (-23% YoY), missing consensus of ¥9.3bn Mkt cap, curr, basic (bn) ¥310.2

Avg daily trading value (bn) ¥2.5

The full-year guidance Tokuyama released contains a mix of downside risks and

conservative assumptions

1Q OP came to ¥6.1bn (-23% YoY), falling short of consensus of ¥9.3bn and our

estimate of ¥10bn. Versus our forecast, Chemicals underperformed significantly,

while Electronic & Advanced Materials also came in below expectations. In

Chemicals, overseas VCM market conditions were weak and the company was

unable to procure the required volume of ethylene, apparently leading to reduced

production of VCM and caustic soda. Within Electronic & Advanced Materials, IPA

for semiconductor cleaning appears to have been heavily affected by higher raw