F3/27 1Q Preview: Focus on Overseas Demand (US, China) and Impact of Higher Material and Component Costs

研报英文原文证据摘录

F3/27 1Q Preview: Focus on Overseas Demand (US, China) and Impact of Higher Material and Component Costs

Idea

July 28, 2026 09:42 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MHousing Fixtures | Japan Ryo Yagi

Equity Analyst

F3/27 1Q Preview: Focus on Ryo.Yagi@morganstanleymufg.com +81 3 6836-8938

Overseas Demand (US, China)

and Impact of Higher Material Housing Fixtures

Japan

Industry View In-Lineand Component Costs

Results for housing fixture companies we cover begin with

Sanwa HD on Jul 31. The macro backdrop remains unfavorable,

but we think concerns are priced in. Rising expectations of future

earnings growth could drive upside ahead.

Key Takeaways

Look to confirm demand trends in overseas growth markets (esp. US & China),

impact of higher material and component costs, and effects from the Middle East

situation (component procurement).

Rinnai and LIXIL announced price hikes post full-year results. We want to also

assess whether price hikes can offset rising material and component costs.

Among individual names, we highlight Rinnai. We expect 1Q OP to be weak, but

believe concerns are priced in. We believe investor focus will likely shift to future

earnings after 1Q results.

Key fundamentals: We focus on demand trends in the US and China, two key

markets for our coverage names. While housing market indicators suggest demand

remains soft, we want to see if there are signs of improvement. On procurement,

TOTO has resumed accepting unit bath orders with normal lead times, suggesting

limited near-term disruption, though we will continue monitoring developments as

Middle East risks have resurfaced. We will also assess whether price hikes

announced by Rinnai (effective Sep 1, 2026) and LIXIL (Aug 3, Sep 1, or Oct 1, 2026,