Updating our forecasts: We look for profit growth in 27/3, but expect Middle East situation to have an impact

研报英文原文证据摘录

Updating our forecasts: We look for profit growth in 27/3, but expect Middle East situation to have an impact

Global Markets Research

16 June 2026Fumakilla

4998.T 4998 JP / EQUITY: JAPAN TOILETRIES & COSMETICS

Updating our forecasts: We look for profit growth in 27/3, but Rating

Remains Buyexpect Middle East situation to have an impact

Target price

Guidance does not factor in the Middle East, but we anticipate some Reduced from 1,570 JPY 1,360

impact

Closing price JPY 1,166We reiterate our Buy rating, forecast profit growth on disappearance of unfavorable 15 June 2026

weather and lull in promotional cost increases

We revise our earnings forecasts for Fumakilla in light of recent business conditions. We Implied upside +16.6%

expect 27/3 operating profits to fall short of guidance of ¥2.95bn, which does not factor in

any cost implications from the situation in the Middle East. Nevertheless, we expect profits

to receive a boost in 27/3 from a rebound in insecticide demand in Japan, which declined

in 26/3 Q1 owing to unfavorable weather. Increased promotional activity designed to Relative performance chart

generate market share growth in Southeast Asia also caused margins to deteriorate in

26/3, but we expect growth in these costs to slow in 27/3. We forecast 27/3 operating

profits of ¥2.5bn (up 14% y-y), as although we expect costs to rise because of the

situation in the Middle East, we also factor in these positives. We roll forward the base

year for our target price calculation to 27/3 and obtain our target price of ¥1,360 by

multiplying our 27/3 EPS forecast of ¥85 by a fair-value P/E of around 16x.

Cost increases owing to Middle East situation likely to feed through to earnings

through H2