Otsuka HD (4578.T): First Take: Upward revisions to 1H guidance suggest stronger-than-expected sales and profits; maintain Buy

研报英文原文证据摘录

Otsuka HD (4578.T): First Take: Upward revisions to 1H guidance suggest stronger-than-expected sales and profits; maintain Buy

Goldman Sachs Otsuka HD (4578.T)

Price Target Risks and Methodology - Otsuka Holdings

Our 12-month target price of ¥13,250 is based on a 12-year DCF model assuming a

WACC of 6% and terminal growth rate of 0%. We are Buy rated. Key risks include

worse-than-expected sales of key drugs or sales suspensions of key drugs,

suspension/delays in drug development, risks associated with the nutraceuticals

business (such as unfavorable weather, greater-than-expected impact from inflation),

slower-than-expected new market creation, and conditions diverging from our DCF

model assumptions.

Investment Thesis - Otsuka Holdings

Otsuka Holdings’ largest earnings driver is the pharmaceuticals business, centered on

the branded drugs business. However, it has a wide-ranging business portfolio, including

the nutraceuticals business and consumer-related businesses. We are Buy rated. Though

it is possible that the end of market exclusivity for mainstay autosomal dominant

polycystic kidney disease drug Jynarque and antipsychotic Abilify Maintena might

impact near-/medium-term earnings, looking ahead we think a key discussion point will

be the potential improvement in the longer-term outlook, driven by (1) potential growth

in royalty income for anticancer drugs Pluvicto and Kisqali; (2) expectations for drugs in

development to become blockbusters, including IgA nephropathy treatment

Voyxact/sibeprenlimab and ADHD treatment centanafadine; and (3) the possibility of

rising expectations for new growth drivers including Visterra Inc. and ReCor Medical.

4578.T 12m Price Target: ¥13,250 Price: ¥11,325 Upside: 17.0%

Buy GS Forecast

12/25 12/26E 12/27E 12/28E