House Foods Group: After change in business strategy, restructuring begins

研报英文原文证据摘录

House Foods Group: After change in business strategy, restructuring begins

Global Markets Research

15 June 2026House Foods Group

2810.T 2810 JP / EQUITY: JAPAN FOOD, BEVERAGES & TOBACCO

RatingAfter change in business strategy, restructuring

From Suspended Buybegins

Target price JPY 4,100We forecast EPS growth on improved shareholder returns and initiatives From N/A

to restore profits within spice value chain

Closing price JPY 3,526We reinitiate coverage with Buy rating, forecast EPS growth on shareholder returns 12 June 2026

and profit growth

We reinitiate coverage of House Foods Group with a Buy rating and a target price of ¥4,100, Implied upside +16.3%

which we obtain by multiplying our 27/3 adjusted EPS forecast of ¥139.5 by a P/E of around 29x.

We think the stock deserves to trade at a 70% premium to the food sector average P/E of 17x

because our EPS CAGR forecast for the four years from end-27/3 of 22% is much higher than

the benchmark average of 8%, following a change in the company's business strategy. Its Relative performance chart

adjusted ROE target of 8% excludes extraordinary gains/losses such as gains on the sale of

strategic shareholdings. We expect it to achieve this target in 30/3 via ongoing large-scale

shareholder returns, restructuring in the US, and rebuilding of the spice segment in Japan.

Earnings outlook: We forecast profit recovery in Japan, profit growth overseas

within spice value chain

We forecast 27/3 operating profits of ¥17.9bn (down 2% y-y). Japanese operations are

being hit hard by higher fixed costs following the startup of a new plant as well as by cost

increases caused by the deteriorating situation in the Middle East. While the company

should eventually be able to pass on cost increases, we think it will have no choice but to