Yokohama Rubber (5101): 2Q results: Guidance raised but still has upside; rise in expectations for next medium-term plan

研报英文原文证据摘录

J P M O R G A N

Asia Pacific Equity Research

10 August 2026

Yokohama Rubber (5101)

2Q results: Guidance raised but still has upside; rise in

expectations for next medium-term plan

Positive: 2Q business profit was ¥51.4 billion, above our ¥45.9 billion estimate

based on a rate of ¥155/$ but in line if using matching forex assumptions. Existing

tire sales rose in Europe and India, and end-June inventory levels in North America

had normalized. Price hikes in Japan, Europe, and elsewhere offset price

adjustments in North America and contributed to profit growth. Total profitability

improved in the off-highway tire (OHT) business through the selection of

segments and sales regions. For the next MTP, earnings improvement from

expanded production at low-cost plants and a capital policy shift from investment

to shareholder returns are taking shape.

Strong results in a challenging environment: 2Q profits reached record

levels despite a challenging demand environment for the existing tire business,

mainly in North America. While maintaining a global order backlog of about

1 million units, the company raised prices in Japan, Europe, and Asia to offset

sales declines and price adjustments in North America. In the OHT business,

sales volume (by weight) was slightly below target, but the company withdrew

from low-profitability segments, mainly in APAC; increased shipments to

highly profitable North America; and offset the impact of sharp material cost

increases with price hikes.

Upside to full-year guidance: Management raised full-year business profit

guidance from ¥188 billion to ¥192.5 billion, which is mostly in line with our

estimate (¥190.6 billion) and based on similar forex assumptions.

Management expects the impact of material cost increases stemming from the

Middle East conflict (¥33 billion) to be about ¥5 billion lower than it expected

at the time of 1Q results, through operational measures, and intends to offset

about 60% of this (¥20 billion) with price hikes outside North America. The

company has favorable momentum to raise prices in North America, as tier 1

manufacturers in Japan and overseas such as Michelin and Goodyear have

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