27/3 Q1 results: Lackluster sales of recently listed drugs, but strong performance overseas

研报英文原文证据摘录

Global Markets Research

Towa Pharmaceutical

7 August 2026

4553.T 4553 JP / EQUITY: JAPAN PHARMACEUTICALS

27/3 Q1 results: Lackluster sales of recently listed

drugs, but strong performance overseas

Rating

Remains

We would have like to have seen stronger growth in production and sales

volumes

Reduced from 4,500

We retain Neutral rating, strong performance overseas but weak performance at Sunsho

Pharmaceutical

Towa Pharmaceutical reported 27/3 Q1 sales of growth of 9.6% y-y and operating profit growth of

25.2%. Recurring profits doubled on derivative valuation gains (it incurred valuation losses a year

earlier). The Towa Pharmaceutical etc (generic drugs in Japan) and Towa INT (overseas)

segments registered growth but earnings were weak at the Sunsho Pharmaceutical etc segment.

The Towa Pharmaceutical etc segment registered solid sales, but growth in production and sales

volumes was a little lackluster, owing to a slow start for newly listed drugs, and moves to hire new

staff and train them because of workers leaving plants. We accordingly lower our forecasts and

cut our DCF-based target price to ¥4,200. We retain our Neutral rating.

27/3 Q1 results: Weak performance at Sunsho Pharmaceutical offset by overseas

operations

The Towa Pharmaceutical etc segment posted an 8.7% y-y rise in sales and a 10.2% rise in

operating profits. Sales of existing generic drugs were steady. Sales of drugs listed in June were

weak owing to a lack of uptake of orally disintegrating tablets. Production volume rose 6.2% to

4.09bn tablets and sales volume rose 4.4% to 4.02bn tablets. Sales and operating profits were

equivalent to 22.7% and 23.6% of full-year guidance respectively, which we regard as decent

performance given that earnings tend to skew to H2, but were a little weaker than expected

because it had to find new workers and train them to make up for staff departures at its Yamagata

plant. Sunsho Pharmaceutical etc posted an 11.3% y-y decline in sales and operating losses of

¥0.40bn (versus prior-year profits of ¥0.14bn). Earnings were hit by slow orders at the new

applications business and a loss of orders at the pharmaceuticals business. Management is

…