F3/27 1Q Results: Solid Start, With Strong Growth in Recycling

Research evidence excerpt

F3/27 1Q Results: Solid Start, With Strong Growth in Recycling

Update

August 4, 2026 09:24 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MUSS (4732) | Japan Katsumi Arai

Equity Analyst

F3/27 1Q Results: Solid Start, Katsumi.Arai@morganstanleymufg.comAkiho Toyama +81 3 6836-8918

Akiho.Toyama@morganstanleymufg.com +81 3 6836-8405

With Strong Growth in

Recycling

AlphaSignals Earnings Reaction

USS (4732.T, 4732 JP)

Unchanged In-line Largely unchanged Mid Small Cap/Non-Manufacturer | Japan

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

consensus EPS Stock Rating Equal-weight

Industry View In-Line

Source: Company data, Morgan Stanley Research Price target ¥1,700

Shr price, close (Aug 4, 2026) ¥1,970

Mkt cap, curr, basic (bn) ¥914.7

Key Takeaways Avg daily trading value (bn) ¥2.1

1Q results were firm, with OP coming in at ¥16.2bn (+10% YoY), 1% above the

consensus.

The Recycling business outperformed our OP forecast.

Full-year guidance was hiked, but remains below the consensus and still looks

conservative.

As monthly disclosures had already shown, 1Q auction volumes were +5% YoY for

vehicle consignments and +8% for contract completions. While slightly below our

forecast, growth can still be viewed as solid. In the secondhand car market, both

domestic and export demand were firm. The Middle East is a key export region for

Japanese secondhand vehicles, but the situation there is not having a major impact

due to strong demand from other areas like Africa. The average price on completed

transactions, a gauge of auction market conditions, was +8% in June on a calendar-

adjusted basis, suggesting demand remains strong. Share price performance has

been soft for USS and the other secondhand car dealers in our coverage (Nextage