Upbeat on stable growth, sound finances; eye ecosystem value’s quantification

研报英文原文证据摘录

Upbeat on stable growth, sound finances; eye ecosystem value’s quantification

vered by our earnings forecasts, and we assume a decline in

demand for petrochemical products from 2H FY3/27 due to rising prices. (See

page 2 for more.)

WATCH: Focus on details of expected synergies, risk management

We are upbeat on the growth potential of Envarsus XR and Tarpeyo, and we

also expect Aicuris to contribute to earnings (see our report of 26 February on

Asahi Kasei, subtitled Aicuris acquisition makes strategic sense; acquisition

value seems reasonable). Regarding the profitability of M&A deals, we still

believe the company needs to provide explanations on hurdle rates based on

Japan-US and Japan-Europe long-term government bond yield differentialsSenior Analyst Mikiya Yamada

+81 3 6202 8390 mikiya.yamada@mizuho-sc.com and the gap between expected ROIC levels for startup pharmaceutical

companies and Asahi Kasei, as well as the expected value of synergies and

Click here for ESG on the company’s risk management strategy.

our entire coverage MEASURE: Too early to apply large valuation premium

Our new price objective of ¥2,100 is based on our discounted future economic

value added model and equates to a PER of 16.5x, a PBR of 1.29x, and

a dividend yield of 2.1% based on our FY3/27 estimates. We think these

valuations largely make sense when compared to those of Asahi Kasei’s

sector rivals. While we believe the company’s growth strategy, which aims

to make effective use of the Asahi Kasei ecosystem, is reasonable, we think

it is too early to apply a large valuation premium, as we do not believe

the company will present synergies on the scale needed to outweigh its

conglomerate discount, particularly in the healthcare field.