Growth phase driven by AI and electric power infrastructure: Structural reform benefits in elastomers & infrastructure solutions segment should support profit growth

研报英文原文证据摘录

Growth phase driven by AI and electric power infrastructure: Structural reform benefits in elastomers & infrastructure solutions segment should support profit growth

Global Markets Research

29 June 2026Denka

4061.T 4061 JP / EQUITY: JAPAN CHEMICALS & TEXTILES

Growth phase driven by AI and electric power infrastructure Rating

Remains Buy

Structural reform benefits in elastomers & infrastructure solutions Target price

segment should support profit growth Increased from JPY JPY 5,300

4,600We keep our Buy rating, look for faster growth in electric power infrastructure

Following a change in analyst, we trim our profit forecasts for Denka but raise our target Closing price JPY 4,404price and reiterate our Buy rating on the stock. We expect 27/3 earnings to be weighed 26 June 2026

down by production constraints in operations in Singapore caused by the situation in the

Implied upside +20.3%Middle East. Over the medium term, we expect growth to accelerate for products related

to electric power infrastructure as well as AI. We obtain our target price by multiplying our

28/3 adjusted EPS forecast of ¥295.5 by a P/E of 18.1x. We use our forecast for 28/3, by

Relative performance chartwhich time we expect the situation in the Middle East to normalize. We reduce the

discount we applied to the Russell/Nomura Large Cap (ex financials) average P/E on

FY26 forecasts of 5% to 0% to reflect upward revisions to our medium-term profit

forecasts for electronics & innovative products and reduced profit volatility caused by

market prices. If Denka clarifies its plans to close its US chloroprene rubber business, we

would expect valuations to rise further as uncertainty about extraordinary losses eases.

27/3: Factoring in constraints on Singapore plant from situation in Middle East