Raise PO, but reiterate U/P; petrochemicals remain a drag

研报英文原文证据摘录

Raise PO, but reiterate U/P; petrochemicals remain a drag

Short-term view

• 1Q OP is expected at ¥79.0bn, broadly in line with the consensus of ¥78.3bn. Core

OP is also projected at ¥79.0bn. In 2Q, factors such as deterioration in inventory

valuation gains and losses due to lower naphtha prices in petrochemical-related

businesses, customer inventory adjustments, and the use of previously procured

high-cost feedstock are likely to weigh on performance; however, guidance is

expected to remain unchanged. No surprise is anticipated.

• From FY3/27 onward, non-recurring losses including impairments are expected to

continue on an ongoing basis, and thus pressure on OP relative to core OP is likely

to persist. Meanwhile, the outlook for non-recurring losses from FY3/28 onward has

improved, reflecting impairments in large businesses such as carbon and provisions

for large-scale restructuring costs already recognized.

• Core OP estimates have been revised upward, driven by improvements in carbon

fiber for robotaxis and semiconductor-related materials. However, weakness in

petrochemicals (including EVOH, MMA, and ethylene) is expected to persist, limiting

the extent of earnings recovery.

Medium- to long-term view

• Supply-demand conditions for petrochemicals, including MMA monomers, EVOH,

and ethylene, are expected to deteriorate due to increased supply from China and

weak demand growth, representing a significant drag on earnings.

• The company announced in May 2026 that it is considering spinning off basic

chemicals such as ethylene within FY3/28. While there is potential for future

restructuring, the process is likely to take considerable time, and the near-term

impact is expected to be limited. Consolidation of ethylene facilities in western