Cosmetics & Personal Care Products | Japan Apr-Jun Results Focus Points

Research evidence excerpt

Cosmetics & Personal Care Products | Japan Apr-Jun Results Focus Points

IdeaAlphaSignalsMEarnings Preview

Focus KPI Focus KPI Surprise Likely impact to consensus EPS*

Kao 4452.T

Progress vs. full-year plan, excl. one-off

Likely upside surprise Modest revision higher

factors

• We forecast 2Q sales +11% YoY: Hygiene & Living Care +6%, Health & Beauty Care +11%, Business Connected

+1%, Cosmetics +13%, Chemicals +13%.

• Our 2Q OP forecast is ¥50.7bn, up a hefty 31% YoY. We expect contributions from price pass-through

progress in chemicals, temporary demand in Japan, solid sales growth in cosmetics.

• A FY guidance hike on land sales gains seems very likely. Steady advance in consumer business could also

fuel an organic hike barring any big change in the Chemicals outlook since 1Q.

• We also focus on management commentary regarding the cost impact outlook related to Middle East

developments.

• Buybacks are a residual positive catalyst for F12/26 but we see timing as more likely to be at 3Q reporting.

Rohto Pharmaceutical 4527.T

Progress vs. full-year plan In-line Modest revision higher

• We forecast 1Q sales +8% YoY: Japan +3%, Americas +9%, Europe +17%, and Asia +14%.

• We forecast 1Q OP of ¥12.0bn (+2% YoY, +¥0.3bn YoY), implying an OPM of 13.5% (-0.8ppt YoY). By region,

forecast YoY OP change: Japan -¥0.7bn, Americas flat, Europe +¥0.4bn, and Asia +¥0.6bn.

• We think there have been recent market concerns about structural proclivity for SG&A in the co. plan to build

up in 1Q with growth in medical R&D and Asia marketing costs.

• We see company comments on the nature of progress toward FY plan in 1Q earnings as more important.

• We see room for upside vs. the FY plan in sales and Asia OPMs.

Pigeon 7956.T

Sales growth in China business In-line Largely unchanged