ENEOS Holdings (5020): 1Q results: High profit growth in domestic petroleum products, also announces acquisition of US C4 materials major

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

08 August 2026

ENEOS Holdings (5020)

1Q results: High profit growth in domestic petroleum

products, also announces acquisition of US C4

materials major

Overweight

5020.T, 5020 JP

Price (07 Aug 26):¥1,350

Price Target (Dec-26):¥1,600

Somewhat positive: Eneos delivered solid profit progress, but we think results

were relatively unsurprising compared with industry peers Cosmo Energy

Holdings and Idemitsu Kosan, where 1Q profit beat full-year guidance. With

results, Eneos announced the acquisition of major US C4 materials maker TPC

Holdings, and as this investment aligns with the direction of Eneos’ medium-term

strategy, we believe it can be viewed positively.

High profit growth in domestic petroleum products on time-lag effects,

export market improvement: 1Q operating profit (ex inventory impact) grew

113% YoY to ¥287.4 billion and net profit (ex inventory impact) grew 6.2x to

¥278.4 billion, above our estimates for operating profit of ¥190 billion and net

profit of ¥120 billion. Petroleum products operating profit (ex inventory

impact) increased by ¥125 billion YoY, driven mainly by time-lag effects

related to crude oil procurement (+¥83.4 billion YoY) and improvement in

export margins and refinery troubles (+¥41.6 billion). Oil and natural gas E&P

operating profits increased by ¥11.6 billion on higher crude oil prices and yen

depreciation. FY2026 guidance is unchanged. Although we expect time-lag

effects to have a negative impact on earnings from 2Q, we think visibility for

achieving FY2026 profit guidance has increased, considering a delay in

recording gains on sales of JX Advanced Metals shares (¥86 billion) until 2Q

or later rather than as initially planned in 1Q, and the start of payments of

adjustment subsidies for alternative import costs from July.

Large materials acquisition: Eneos announced the acquisition of major US

C4 materials maker TPC Holdings when reporting results. It did not disclose

the acquisition price, but we expect it to be ¥200 billion or higher. TPC has the

top market share in North America for main C4 materials, including butadiene,

…