F2/27 1Q Results: Behind Plan Due to Inventory Disposals

研报英文原文证据摘录

F2/27 1Q Results: Behind Plan Due to Inventory Disposals

Update

July 14, 2026 10:43 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MIDOM (7599) | Japan Katsumi Arai

Equity Analyst

F2/27 1Q Results: Behind Plan Katsumi.Arai@morganstanleymufg.comNatsuko Seto +81 3 6836-8918

Research Associate

Natsuko.Seto@morganstanleymufg.com +81 3 6836-8940

Due to Inventory Disposals

Reaction to earnings

Unchanged Meaningful shortfall Modest revision lower

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS IDOM (7599.T, 7599 JP)

Source: Company data, Morgan Stanley Research Mid Small Cap/Non-Manufacturer | Japan

Stock Rating Overweight

Industry View In-Line

Key Takeaways Price target ¥2,100

Shr price, close (Jul 14, 2026) ¥1,366

1Q OP came to ¥4.4bn, 22% below the ¥5.6bn consensus, and also seemingly Mkt cap, curr, basic (bn) ¥137.2

behind guidance by a similar margin. Avg daily trading value (bn) ¥1.0

It appears the guidance miss was mainly the result of wholesale GP per vehicle

falling short due to increased inventory disposal losses aimed at improving ROIC.

IDOM believes it can still achieve full-year guidance through gains in GP per retail

unit from 2Q.

IDOM had until now wholesale-disposed of vehicle inventory purchased through

auctions when the number of inventory days had exceeded 120, but from F2/27, it

has shifted to wholesale-disposing of sub-120-day vehicle inventory if anticipated GP

is low. As a result, GP per wholesale unit declined YoY and lagged guidance. This

would ordinarily serve to improve GP per retail unit, but the improvement was

insufficient to offset the deterioration in GP per wholesale unit in 1Q due to

disruption associated with the transition period. IDOM believes it can recover the 1Q