Signs of renewed growth at US Hi-Chew business over long term

研报英文原文证据摘录

Signs of renewed growth at US Hi-Chew business over long term

Global Markets Research

24 June 2026Morinaga

2201.T 2201 JP / EQUITY: JAPAN FOOD, BEVERAGES & TOBACCO

RatingSigns of renewed growth at US Hi-Chew business

Remains Buyover long term

Target price

Higher costs likely to cancel out benefits from lower cocoa costs and price revisions over Reduced from 3,600 JPY 3,100

near term, but we see signs of renewed growth for Hi-Chew in US

Closing price JPY 2,544.5We reiterate Buy rating, see little prospect of profit growth in near term but raise 23 June 2026

long-term growth forecasts

We revise our earnings forecasts for Morinaga in view of 26/3 Q4 results. We reiterate our Implied upside +21.8%

Buy rating but now forecast flat profit growth in 27/3 and cut our target price. We lower our

forecasts to reflect higher costs and higher depreciation costs following M&A in the US,

which we expect to cancel out benefits from lower cocoa costs and price revisions.

However, we raise our operating profit CAGR forecast (from an end-27/3 baseline) from Relative performance chart

4% to 5% on improved prospects for longer-term growth at the Hi-Chew business in the

US. While we do not envision any profit growth in the near term, we value the stock in line

with the food sector average P/E as we forecast profit growth in line with the sector

average over the longer term. We lower our target price to ¥3,100, which we obtain by

multiplying our 27/3 adjusted EPS forecast by a P/E of 17x.

26/3 Q4 results: Broadly in line with our forecasts excluding one-time costs

Q4 operating profits rose 51% y-y to ¥2.8bn. Profits rose despite an increase in strategic

sales promotion expenses in the US business and lower in Jelly profits stemming from