Hulic (3003.T): Maintaining Neutral - new investments will take time to generate returns

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Hulic (3003.T): Maintaining Neutral - new investments will take time to generate returns

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03 Aug 2026 04:37:44 ET │ 13 pages

Hulic (3003.T)

Maintaining Neutral - new investments will take time to generate

returns

CITI'S TAKE Neutral

Price (03 Aug 26 15:30) ¥1,710.0 We fine-tune our earnings forecasts following Q2 results. Changing our

Target price ¥1,800.0↓ target EV/EBITDA multiple from 16.0x to 15.5x to reflect the risk of a

deterioration in the real estate market caused by rising interest rates, we from ¥2,000.0

lower our target price from ¥2,000 to ¥1,800 and maintain our Neutral Expected share price return 5.3%

rating. Underlying earnings momentum remains solid. However, rising Expected dividend yield 3.9%

rates have caused a bigger-than-expected increase in interest expenses, Expected total return 9.2%

and Hulic’s focus on mid-sized office buildings limits rent revision upside Market Cap ¥1,298,659M

compared with major developers. We also think the risks from capital

US$8,241M allocation and the conglomerate discount caused by rapid diversification

through M&A leave little scope for the firm to aggressively push up its

valuations. The risk of additional share sales as other firms unwind their

cross-shareholdings also weighs. Masashi Miki, CFAAC

+81-3-6776-4665

FY12/26 — Profit is on track to reach a record high. While additional goodwill masashi.miki@citi.com

amortization expenses from Riso Kyoiku remain uncertain, we expect increased

gains on real estate sales and upside from non-real estate businesses to offset these

costs. We think the company will raise full-year guidance at Q3 results, as usual.

FY12/27 — While the drop-out of goodwill amortization expenses and of

hotel/ryokan opening costs and growth in overseas income gains represent