Nippon Chemi-Con (6997) Upgrade to Neutral: Litigation risk exists, but see improvement in fundamentals

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Nippon Chemi-Con (6997) Upgrade to Neutral: Litigation risk exists, but see improvement in fundamentals

J P M O R G A N Asia Pacific Equity Research

15 July 2026

Nippon Chemi-Con (6997) ▲Neutral

Previous: Underweight

Upgrade to Neutral: Litigation risk exists, but see 6997.T, 6997 JP

Price (15 Jul 26):¥3,700

improvement in fundamentals ▲Price Target (Dec-27):¥4,300

Prior (Dec-26):¥1,260

We raise our price target for Nippon Chemi-Con from ¥1,260 to ¥4,300, extending Japan Equity Research

the time frame for achieving it to December 2027 from December 2026, and

Technology - Electronic

upgrade our rating to Neutral from Underweight. We previously calculated our Components

price target using the average FY2017-FY2024 P/B of 0.6x, reflecting heightened AC Akinori Kanemoto

financial and dilution risks due to the pending lawsuit with Dyson, which is seeking

(81-3) 6736 8628

about ¥30 billion in damages. We expect longer-term earnings growth driven by akinori.kanemoto@jpmorgan.com

a recovery in markets for aluminum electrolytic capacitors for automotive and Ikki Shibata

industrial equipment applications, as well as stronger demand for extended-length (81-3) 6736 8641

capacitors for AI servers, hybrid capacitors, and polymer capacitors. Reflecting ikki.shibata@jpmorgan.com

this, we set our price target at ¥4,300 using our FY2027 BPS estimate of ¥2,273 JPMorgan Securities Japan Co., Ltd.

and a P/B of 1.9x, derived from the peak sector-relative P/B of the electronic

components sector over the past 10 years of 0.75x multiplied by the current sector Key Changes (FYE Mar)

average P/B of 2.5x (both BBG consensus, as of July 14). Prev Cur Δ

Adj. EPS - 27E (¥) 164.51 157.39 -4.3%

Considering the outlook for a recovery in earnings and the company’s current Adj.