AGC (5201.T): Update - next keys will be life science earnings improvement, Asian chlor-alkali market trends

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AGC (5201.T): Update - next keys will be life science earnings improvement, Asian chlor-alkali market trends

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29 Jun 2026 10:24:29 ET │ 20 pages

AGC (5201.T)

Update - next keys will be life science earnings improvement, Asian

chlor-alkali market trends

CITI'S TAKE

We revise our forecasts. Since Q1 results, the share price has risen due to 1) the Neutral

possibility that the Middle East situation may have little impact and 2) expectations

for the semi-related business briefing. We believe growth expectations for the semi- Price (29 Jun 26 15:30) ¥6,914.0

related business are largely priced in. Next, we think an improvement in life sciences Target price ¥7,000.0↑

profit and Asian chlor-alkali market trends will be the keys to continued stock price

from ¥5,200.0appreciation. We raise our target price to ¥7,000 from ¥5,200 but maintain our

Neutral rating. Expected share price return 1.2%

Expected dividend yield 3.0%

Earnings — We raise our FY12/26 OP forecast from ¥149bn to ¥162bn. The ¥13bn Expected total return 4.3%

increase comprises: architectural glass +¥1.2bn (Middle East impact less severe than

expected), automotive +¥4.5bn (Middle East impact less severe than expected), Market Cap ¥1,468,491M

displays -¥0.9bn (potential panel maker utilization decline in H2), electronic US$9,088M

materials +¥5.9bn (improved demand from major EUV blanks customers), chemicals

+¥2.6bn (reflecting Q1's ¥40bn-¥50bn one-time profits and current market

conditions), life sciences ¥0bn.

Price PerformanceMiddle East impact — AGC stated that the impact of the Middle East situation has

been minimal and maintained full-year guidance at Q1 results. Specifically, while (RIC: 5201.T, BB: 5201 JP)

annual profits could suffer a ¥10bn hit from material cost inflation (mainly in