Still a Buy: May miss FY3/27 OP target, but look for record profits longer term

研报英文原文证据摘录

Still a Buy: May miss FY3/27 OP target, but look for record profits longer term

price related to the Middle East conflict to result in slower demand for

additives used in automotive, construction, appliance/electronics, and other

applications, and we therefore estimate FY3/27 OP of only ¥9.0b in

the polymer additives business (the company projects ¥10.8b). For the

semiconductor materials business, we estimate FY3/27 OP of ¥8.0b (the

company projects ¥9.0b), as we use more conservative assumptions for

pricing cooperation with major customers. (More on page 2)

WATCH: Due to Mideast, eye on downstream demand risk near term

Our focus in the near term is mainly on 1) the risk of slower downstream

demand due to the situation in the Middle East, and 2) the announcementAnalyst Yuto Otani

+81 3 6202 8309 yuto.otani@mizuho-sc.com of the company’s next medium-term management plan. Over the medium

to long term, we will be keeping a particularly close eye on developments

Click here for ESG on such as 3) growth in metal compounds used in metal oxide resist (MOR)

our entire coverage and the progress of development of new materials for advanced logic

applications (semiconductor materials business), and 4) the progress of

business optimization based on ROIC by individual production line.

MEASURE: Applying premium for expected string of record-high profits

We derive our new ¥4,700 price objective for Adeka by applying a PER of just

under 16x to our FY3/27 EPS forecast of ¥298.5. We arrive at our target PER

of just under 16x by applying a premium of around 1.5σ to the stock’s 12.5x

average PER over the period FY3/20–FY3/26 (based on EPS guidance). Our

new price objective of ¥4,700 equates to a PBR of 1.39x and EV/EBITDA

multiple of 5.9x based on our respective FY3/27 forecasts.