Lion (4912): 2Q results: Growth in value-added and mix improvement above expectations

研报英文原文证据摘录

J P M O R G A N

Asia Pacific Equity Research

08 August 2026

Lion (4912)

2Q results: Growth in value-added and mix

improvement above expectations

Somewhat positive: 2Q core operating profit of ¥9.3 billion was ¥800 million

above our ¥8.5 billion estimate. Lion made better progress than expected in raising

value-add and in improving the sales mix. Accelerating oral healthcare sales

growth (+4.1% YoY in 1Q, +10.5% in 1H) and an upturn in sales in China (–26%

in 1Q, +14.3% in 2Q) were also positive. Management expects raw material costs

to worsen because of the deteriorating situation in the Middle East, but left full-year

earnings guidance unchanged. We feel the visibility of FY2027 earnings growth

has also improved.

Overweight

4912.T, 4912 JP

Price (07 Aug 26):¥1,798

Price Target (Dec-26):¥2,150

Japan Equity Research

Cosmetics and Personal Care /

Paper and Packaging

Akiko Kuwahara AC

(81-3) 6736-8617

JPMorgan Securities Japan Co., Ltd.

Summary of company briefing on key points: (1) Steps to absorb worsening

raw material costs caused by the deteriorating Middle East situation: Lion’s 2H

raw material cost estimate has worsened by ¥5 billion from initial guidance,

breaking down as ¥3 billion in 3Q and ¥2 billion in 4Q. To absorb this, Lion

aims to boost gross profit by ¥4 billion (+¥1 billion from cost-cutting, +¥3

billion from price hikes) and to improve SG&A expenses by ¥1 billion as well.

It expects boosts from price hikes of ¥500 million in 3Q and ¥2.5 billion in 4Q.

(2) Impact of changed assumptions for 2H guidance on FY2027: Lion expects

raw material costs to worsen by a further ¥5 billion in 1H FY2027, as well, and

will need factors adding ¥10 billion to profit to achieve its medium-term core

operating profit target (¥40 billion in FY2027). 4Q FY2026 price hikes will

contribute over the full year, as well as a further ¥4–5 billion uplift to profits

from a better sales mix. It will also implement cost controls. (3) Background

to forecast for ¥200 million YoY decline in 2H impact from changes in sales

volumes: On top of the specialty chemicals business and the REED brand

divestments, the company expects sales volume declines due to product price

hikes.…