Asahi Intecc (7747): 4Q results briefing: Strong US business leaves good impression

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

19 August 2026

Asahi Intecc (7747)

4Q results briefing: Strong US business leaves good

impression

Asahi Intecc held a 4Q results briefing at 10:00–11:00 JST August 18. Sharply

higher raw material costs will have an impact from 2Q onwards in FY6/27, but

sales appear strong, mainly in the US. The upward revision to the medium-term

plan (MTP) was also not surprising, and our take is positive. Valuations are already

high, but we think a sharp share price decline is unlikely given the strength of

fundamentals.

FY6/27 guidance: While FY6/27 assumes strength in all regions, in particular,

it targets US own-brand product sales growth of +11.3% YoY even on a

constant currency basis, and management expressed confidence in doubledigit (%) US sales growth over the medium term, looking even stronger than

our expectations. Sales in China tended to outpace guidance in FY6/26, but the

company explained that FY6/26 was affected by unauthorized trade inflows,

which it does not expect in FY6/27, and that it expected progress in line with

guidance. Management assumes FY6/27 Chinese market growth of 15% YoY,

and is not seeing any particular impact from Chinese government policies.

Asahi Intecc expects factors such as sharply higher platinum and naphtha

prices to depress the FY6/27 gross margin by 1.5ppt, but also expects a 1.0ppt

boost from productivity improvements and other factors. Management

somewhat conservatively expects productivity improvement to slow in

FY6/27 as it addresses factory automation. The company assumes the effects

of soaring platinum prices will come through gradually from 2Q FY6/27, while

it has incorporated the impact of naphtha somewhat conservatively into

guidance, assuming a bottoming out of this impact in 4Q and in 1Q FY6/28. In

order to capture market share, management intends to avoid price hikes on

own-brand products, so we believe that while it will be affected by raw material

costs in the near-term, market share gains should position it well for sales

growth over the medium term.

Raises MTP targets: The latest upward revision to the FY6/30 sales target in

particular is higher than we expected.…