Tokyo Ohka Kogyo (4186.T): TOK over the longer-term - latest tech trends in EUV resists and AI in back-end materials

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Tokyo Ohka Kogyo (4186.T): TOK over the longer-term - latest tech trends in EUV resists and AI in back-end materials

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14 Jul 2026 02:35:12 ET │ 38 pages

Tokyo Ohka Kogyo (4186.T)

TOK over the longer-term - latest tech trends in EUV resists and AI in

back-end materials

CITI'S TAKE

Among semi materials, we like the edge offered by resists, and among resist Buy

names, we think TOK is an attractive investment target from a longer-term

perspective. This report explores the latest technological trends in EUV Price (13 Jul 26 15:30) ¥10,350.0

photoresists, as well as AI opportunities in back-end processing materials. Target price ¥13,800.0↑

We fine-tune our May 18 estimates and lift our target price from ¥13,500 to

from ¥13,500.0¥13,800 (fair value PER is still 30x, which we apply to FY12/27E PER).

Expected share price return 33.3%

Resist market advantages — Resists are core materials in the lithography process, Expected dividend yield 1.0%

which is crucial for semiconductor miniaturization, and we believe they offer Expected total return 34.4%particularly high value-added among front-end process materials. We expect high

growth rates driven by advancing miniaturization and the increasing complexity of Market Cap ¥1,240,961M

the manufacturing processes (more steps in the lithography process). While players US$7,690Moverseas, notably China, aim to localize semi material production, which could pose

a longer-term threat for some semi materials like wafers, we believe the barriers to

entry in resists are high. Resist development requires formulations and databases

for various raw material inputs (photosensitive materials, polymers, and solvents),

and Japanese manufacturers who have built input ecosystems have impressive Price Performance

competitive advantages.