Still a Buy on shift to specialty chemicals; expect specialty products growth

研报英文原文证据摘录

Still a Buy on shift to specialty chemicals; expect specialty products growth

pecialty products and fine chemicals as well as the elimination of routine

shutdown maintenance costs for ammonia. Factoring in the expected IPOs

of the machinery business and MUCC, we forecast FY3/30 RP of ¥40.0b, up

¥4.0b (11%) versus our forecast for FY3/27, and that the net D/E ratio will

fall to 0.38x at end-FY3/30.

WATCH: Upbeat on specialty products based on unique technologies

We anticipate steady growth for Ube’s specialty products based on unique

technologies, including LiB dry separators, polyimide (PI) varnish and

films, separation membranes (e.g., for carbon dioxide), and silicon nitride.

In the Polymers & Chemicals segment, new US production facilities forSenior Analyst Mikiya Yamada

+81 3 6202 8390 mikiya.yamada@mizuho-sc.com DMC at 100,000MT/year and DMC derivative EMC at 40,000MT/year (total

investment of approximately $700m) are scheduled to start up in 1Q FY3/27.

Click here for ESG on We are also eyeing growth in High Performance Urethane for semiconductor-

our entire coverage related applications.

MEASURE: Targeting DOE of at least 3.5%, low risk of dividend cut

Our new price objective of ¥4,000, derived from a discounted future economic

value added model, equates to a PER of 14.3x, a PBR of 0.86x, and a

dividend yield of 4.00% on our FY3/27 estimates. We do not think Ube looks

overvalued relative to peers. It raised its DOE target from at least 2.5% to

at least 3.5% (see our report of 20 May titled Briefing confirms specialty

chemicals focus; also upbeat on higher DOE of 3.5%). We see the risk of a

dividend cut as low, and we think Ube’s dividend yield makes it an attractive

stock.

Consolidated results and forecasts Share Price: ¥3,068 (12 Jun) 52wks: H ¥3,090 L ¥2,184