Mitsubishi Chemical Group (4188.T): Update: Strong profit growth likely, albeit with numerous one-offs

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Mitsubishi Chemical Group (4188.T): Update: Strong profit growth likely, albeit with numerous one-offs

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03 Jul 2026 10:29:37 ET │ 14 pages

Mitsubishi Chemical Group (4188.T)

Update: Strong profit growth likely, albeit with numerous one-offs

CITI'S TAKE

We revise our earnings estimates. We think good visibility for high profit growth

could be reassuring, even as this growth is due largely to the dropout of impairment

losses recorded in FY3/26, benefits from headcount reductions, and profit growth Neutral

at Nippon Sanso. Price (03 Jul 26 15:30) ¥1,163.0

Target price ¥1,250.0↑Earnings outlook — We forecast FY3/27 core OP at ¥333bn (guidance ¥305bn). We

expect core OP to increase by ¥108bn (c50%) from ¥225bn in FY3/26. A segment from ¥930.0

breakdown includes films and performance materials at +¥33bn (dropout of Expected share price return 7.5%

¥30.3bn in impairment losses at Soarnol), composites and shapes at +¥16bn Expected dividend yield 3.1%(outlook for robotaxi volume to increase from 520 in FY3/26 to 3,000 in FY3/27),

information electronics at +¥3bn (sales growth for semiconductor materials), MMA Expected total return 10.6%

and derivatives at +¥4bn (improvement in market prices), basic materials at +¥24bn Market Cap ¥1,579,991M

(improvement in market prices, dropout of ¥5.2bn in impairment losses for ethylene

US$9,808Mglycols), and industrial gases at +¥19bn (Nippon Sanso). Headcount reductions

across the chemicals business could have a positive impact close to ¥15bn. Main

upside factors versus guidance are composites and shapes (robotaxi profit

assumption seems conservative), information electronics (sales growth for

semiconductor materials), basic materials (inventory valuation gains could continue Price Performance