Still Neutral: expecting record profits, weaker polarizing plate growth outlook

研报英文原文证据摘录

Still Neutral: expecting record profits, weaker polarizing plate growth outlook

can offset higher raw material and

fuel costs from heightened Middle East tensions through cost pass-through,

which we think is somewhat ambitious. Accordingly, we forecast FY3/27 OP

of ¥198.0b, ¥5.0b above guidance.

WATCH: Expecting record-high OP in FY3/27 and FY3/28

We expect the Human Life (HL) segment to turn profitable at the operating

level in FY3/28 driven by expansion in the Life Sciences business. We

forecast FY3/28 OP of ¥206.0b (up ¥8.0b, or 4%, versus our FY3/27

forecast), which would mark the second straight year of record-high profits

in FY3/28 (the current record is ¥185.7b in FY3/25). Over the medium/longSenior Analyst Mikiya Yamada

+81 3 6202 8390 mikiya.yamada@mizuho-sc.com term, we see prospects for the effective utilization of IP related to DDS and

refractory cancer treatments, but we do not factor related royalty income

Click here for ESG on into our earnings estimates for the HL segment’s Life Science business.

our entire coverage Our forecast does not incorporate non-recurring gains/losses throughout the

forecast period.

MEASURE: Seems premature to apply valuation premium

Our new price objective of ¥3,200, which we calculate using a discounted

future economic value added (EVA) approach, equates to a PER of 14.3x

and a PBR of 1.74x based on our FY3/27 forecasts. Although we are upbeat

on the competitiveness of the company’s core businesses, we think these

multiples are generally reasonable based on a relative comparison with peers

and the company’s high forex sensitivity and reduced expectations for growth

in the Information Fine Materials business.

Consolidated results and forecasts Share Price: ¥3,005 (12 Jun) 52wks: H ¥4,068 L ¥2,521