Update shared on 18 May 2026
Q4 FY3/26 results update
Consistent growth strategy – Polaris beat FY3/26 guidance and expectations with a strong showing in Q4 FY3/26 amid an evolving market environment, with existing RevPAR up 12.3% YoY, and sustaining double-digit underlying OPM. With the Minacia PMI completed, the company has built a solid foundation to pursue growth initiatives, encompassing a multifaceted approach that includes market-share gains through new hotel openings, diversification of hotel brands and portfolio with a pivot towards more upscale offerings, and the stimulation of domestic demand. Management is also taking a balanced approach to targeting growth and shareholder returns by maintaining flat dividends YoY (DPS increased YoY to ¥5 in FY3/26).
Raising our earnings estimates
Underlying earnings momentum to remain sound – FY3/26 results involved recognition of ¥1.86bn deferred tax asset, demonstrating confidence in sustained profitability. From FY3/27 onwards, accounting tax expenses are expected to normalize, which will distort NI and EPS, but operating performance is expected to maintain growth. We have upwardly revised our earnings estimates for FY3/27 and beyond to reflect underlying momentum and high free cash flow generation.
Valuations – On our revised earnings estimates, the shares are trading at a PER FY3/27 of 19.6x (on +11.0% reported OP growth YoY, +21.1% EBITDA growth YoY), a free cash flow (FCF) yield of 15.3%, and a dividend yield of 2.9%.
Full report here
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