Nippon Paper Industries Corp (3863): Announces sale of shares of equity-method affiliate

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

20 August 2026

Nippon Paper Industries Corp

(3863)

Announces sale of shares of equity-method affiliate

Underweight

3863.T, 3863 JP

Price (20 Aug 26):¥1,364

Price Target (Dec-26):¥1,000

Nippon Paper Industries announced on August 20 that it would sell all of its stake

(about 19,660,000 shares) in Lintec (7966, Not Covered), an equity-method

affiliate, and post an extraordinary income. It said this is part of the balance sheet

optimization measures set forth in its medium-term plan (FY2026-30; its net

interest-bearing debt as of end-June 2026 was about ¥682 billion). If the company

sells Lintec at its August 20 closing price of ¥5,730 per share, the sale price would

be about ¥112.7 billion. We are positive on its progress in improving capital

efficiency and securing cash flow. However, since its non-operating income/

expenses has been interest paid partially offset by equity-method investment profit

up until now, we expect the gap between operating profit and recurring profit to

widen after the sale of Lintec shares. We believe the company urgently needs to

improve the profitability of its businesses to raise ROE.

Japan Equity Research

Cosmetics and Personal Care /

Paper and Packaging

Akiko Kuwahara AC

(81-3) 6736-8617

JPMorgan Securities Japan Co., Ltd.