Major Estimate Revision • May 18
Consensus EPS estimates increase by 15%, revenue downgraded The consensus outlook for fiscal year 2027 has been updated. 2027 revenue forecast fell from JP¥624.2b to JP¥612.0b. EPS estimate rose from JP¥164 to JP¥189. Net income forecast to grow 14% next year vs 6.2% growth forecast for Chemicals industry in Japan. Consensus price target of JP¥2,685 unchanged from last update. Share price fell 2.9% to JP¥2,298 over the past week. Reported Earnings • May 12
Full year 2026 earnings: EPS misses analyst expectations Full year 2026 results: EPS: JP¥180 (down from JP¥202 in FY 2025). Revenue: JP¥589.8b (flat on FY 2025). Net income: JP¥31.6b (down 17% from FY 2025). Profit margin: 5.4% (down from 6.5% in FY 2025). Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 1.0%. Revenue is forecast to grow 2.5% p.a. on average during the next 3 years, compared to a 4.8% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has fallen by 3% per year whereas the company’s share price has increased by 1% per year. Canlı Haberler • May 12
Kansai Paint Sharpens Pay Targets and Doubles Dividend as Profit Guidance Slips Kansai Paint is revising and continuing its performance-linked stock compensation plan for directors, tying awards more tightly to its 2025 to 2027 medium-term targets.
The company will fund a share trust with up to ¥900 million, with stock grants based on role and metrics such as sales, EBITDA, ROE and ESG ratings.
Kansai Paint reported record net sales and EBITDA for the fifth consecutive year, led by growth in Africa and reforms in Europe, and issued FY2026 profit guidance that factors in planned extraordinary losses and a lower net profit forecast.
For FY2026, Kansai Paint reported flat sales and a decline in operating and net profits, yet more than doubled its annual dividend and signaled an intention to keep that dividend level, while forecasting modest sales and operating profit growth and a drop in net profit in FY2027.
The tighter link between stock-based pay and medium-term targets, alongside the dividend increase despite weaker earnings, shows management putting emphasis on both longer-term performance metrics and shareholder returns.
You should weigh the commitment to sustained dividends and performance-linked incentives against the guidance for lower net profit and the impact of extraordinary losses on future earnings quality. Duyuru • May 11
Kansai Paint Co., Ltd., Annual General Meeting, Jun 26, 2026 Kansai Paint Co., Ltd., Annual General Meeting, Jun 26, 2026. Upcoming Dividend • Mar 23
Upcoming dividend of JP¥55.00 per share Eligible shareholders must have bought the stock before 30 March 2026. Payment date: 30 June 2026. Payout ratio is a comfortable 41% and the cash payout ratio is 92%. Trailing yield: 4.6%. Within top quartile of Japanese dividend payers (3.6%). Higher than average of industry peers (2.3%). Reported Earnings • Feb 10
Third quarter 2026 earnings: EPS exceeds analyst expectations Third quarter 2026 results: EPS: JP¥78.35 (down from JP¥94.82 in 3Q 2025). Revenue: JP¥153.2b (up 1.7% from 3Q 2025). Net income: JP¥13.8b (down 20% from 3Q 2025). Profit margin: 9.0% (down from 11% in 3Q 2025). The decrease in margin was driven by higher expenses. Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 92%. Revenue is forecast to grow 3.0% p.a. on average during the next 3 years, compared to a 4.4% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 6% per year but the company’s share price has increased by 15% per year, which means it is tracking significantly ahead of earnings growth. Buy Or Sell Opportunity • Feb 06
Now 20% overvalued after recent price rise Over the last 90 days, the stock has risen 9.4% to JP¥2,635. The fair value is estimated to be JP¥2,189, however this is not to be taken as a sell recommendation but rather should be used as a guide only. Revenue has grown by 7.3% over the last 3 years. Earnings per share has grown by 13%. For the next 3 years, revenue is forecast to grow by 2.9% per annum. Earnings are also forecast to grow by 1.9% per annum over the same time period. Buy Or Sell Opportunity • Jan 08
Now 20% undervalued The stock has been flat over the last 90 days, currently trading at JP¥2,485. The fair value is estimated to be JP¥3,112, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 7.3% over the last 3 years. Earnings per share has grown by 13%. For the next 3 years, revenue is forecast to grow by 3.3% per annum. Earnings are also forecast to grow by 1.5% per annum over the same time period. Declared Dividend • Dec 02
First half dividend of JP¥55.00 announced Shareholders will receive a dividend of JP¥55.00. Ex-date: 30th March 2026 Payment date: 30th June 2026 Dividend yield will be 4.6%, which is higher than the industry average of 2.2%. Sustainability & Growth Dividend is covered by earnings (38% earnings payout ratio) but not adequately covered by cash flows (92% cash payout ratio). The dividend has increased by an average of 19% per year over the past 10 years and has been stable with no material reductions to payments, indicating a long track record of dividend growth and stability. EPS is expected to grow by 8.6% over the next 3 years, which should provide support to the dividend and adequate earnings cover. Reported Earnings • Nov 08
Second quarter 2026 earnings: EPS exceeds analyst expectations while revenues lag behind Second quarter 2026 results: EPS: JP¥43.75 (up from JP¥19.85 in 2Q 2025). Revenue: JP¥144.5b (down 2.8% from 2Q 2025). Net income: JP¥7.71b (up 102% from 2Q 2025). Profit margin: 5.3% (up from 2.6% in 2Q 2025). Revenue missed analyst estimates by 2.5%. Earnings per share (EPS) exceeded analyst estimates by 5.6%. Revenue is forecast to grow 3.2% p.a. on average during the next 3 years, compared to a 4.1% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 13% per year whereas the company’s share price has increased by 9% per year. Buy Or Sell Opportunity • Sep 29
Now 20% undervalued Over the last 90 days, the stock has risen 24% to JP¥2,415. The fair value is estimated to be JP¥3,025, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 9.0% over the last 3 years. Earnings per share has grown by 19%. For the next 3 years, revenue is forecast to grow by 2.9% per annum. Earnings are also forecast to grow by 3.2% per annum over the same time period. Upcoming Dividend • Sep 22
Upcoming dividend of JP¥55.00 per share Eligible shareholders must have bought the stock before 29 September 2025. Payment date: 03 December 2025. Payout ratio is a comfortable 26% but the company is paying out more than the cash it is generating. Trailing yield: 2.3%. Lower than top quartile of Japanese dividend payers (3.6%). Lower than average of industry peers (2.6%). Buy Or Sell Opportunity • Aug 25
Now 20% overvalued after recent price rise Over the last 90 days, the stock has risen 21% to JP¥2,556. The fair value is estimated to be JP¥2,128, however this is not to be taken as a sell recommendation but rather should be used as a guide only. Revenue has grown by 9.0% over the last 3 years. Earnings per share has grown by 19%. For the next 3 years, revenue is forecast to grow by 2.9% per annum. Earnings are also forecast to grow by 2.7% per annum over the same time period. Reported Earnings • Aug 09
First quarter 2026 earnings released: EPS: JP¥48.13 (vs JP¥57.45 in 1Q 2025) First quarter 2026 results: EPS: JP¥48.13 (down from JP¥57.45 in 1Q 2025). Revenue: JP¥144.7b (flat on 1Q 2025). Net income: JP¥8.48b (down 29% from 1Q 2025). Profit margin: 5.9% (down from 8.2% in 1Q 2025). Revenue is forecast to grow 2.9% p.a. on average during the next 3 years, compared to a 4.2% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 19% per year but the company’s share price has remained flat, which means it is significantly lagging earnings. Declared Dividend • Jul 09
Final dividend of JP¥28.00 announced Shareholders will receive a dividend of JP¥28.00. Ex-date: 29th September 2025 Payment date: 3rd December 2025 Dividend yield will be 2.8%, which is higher than the industry average of 2.2%. Sustainability & Growth Dividend is covered by earnings (25% earnings payout ratio) but not covered by cash flows (102% cash payout ratio). The dividend has increased by an average of 11% per year over the past 10 years and has been stable with no material reductions to payments, indicating a long track record of dividend growth and stability. EPS is expected to grow by 11% over the next 3 years, which should provide support to the dividend and adequate earnings cover. New Risk • May 18
New minor risk - Dividend sustainability The dividend is not well covered by cash flows. Cash payout ratio: 102% Dividend yield: 2.7% This is considered a minor risk. Dividends are ultimately paid out of the company's available cash reserves. Companies that pay out too much of their cash flow are at risk of having to reduce or cut their dividend in future. If cash flow growth slows or cash flows fall, then there may not be enough cash reserves to maintain the same dividend. Or in extreme cases, companies may opt to take on debt to maintain the dividend. This risk is mitigated by the fact the dividend is covered by earnings, however, cash flows are generally more important. For dividend paying companies, any reduction in the dividend can significantly impact the share price. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 1.3% per year for the foreseeable future. Minor Risks Dividend is not well covered by cash flows (102% cash payout ratio). Large one-off items impacting financial results. Profit margins are more than 30% lower than last year (6.5% net profit margin). Reported Earnings • May 13
Full year 2025 earnings: EPS misses analyst expectations Full year 2025 results: EPS: JP¥202 (down from JP¥299 in FY 2024). Revenue: JP¥588.8b (up 4.7% from FY 2024). Net income: JP¥38.3b (down 43% from FY 2024). Profit margin: 6.5% (down from 12% in FY 2024). Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 4.7%. Revenue is forecast to grow 3.1% p.a. on average during the next 3 years, compared to a 4.5% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 26% per year but the company’s share price has only increased by 10% per year, which means it is significantly lagging earnings growth. Duyuru • Apr 11
Kansai Paint Co., Ltd. Announces Resignation of Nishibayashi Hitoshi as Representative Director and Director, Effective April 11, 2025 On 11th April 2025 Kansai Paint Co., Ltd. announced NISHIBAYASHI Hitoshi, Representative Director of the Board and Senior Managing Executive Officer of the Company, tendered his resignation as Representative Director and Director for health reasons, and Board of Directors has accepted it. Next position: Corporate Advisor. Current position: Representative Director of the Board, Senior Managing Executive Officer, Head of Business Unit and Head of Europe Business Segment. Effective date: 11th April 2025. Upcoming Dividend • Mar 21
Upcoming dividend of JP¥22.00 per share Eligible shareholders must have bought the stock before 28 March 2025. Payment date: 30 June 2025. Payout ratio is a comfortable 19% and this is well supported by cash flows. Trailing yield: 2.0%. Lower than top quartile of Japanese dividend payers (3.7%). Lower than average of industry peers (2.6%). Duyuru • Feb 27
Kansai Paint Co., Ltd. Appoints Takahara Shigeki as Director of the Board, Effective from April 1, 2025 Kansai Paint Co., Ltd. appointed TAKAHARA Shigeki as Director of the Board from the present post Representative Director of the Board, Vice President, Executive Officer, effective from April 1, 2025. New Risk • Feb 08
New minor risk - Earnings quality The company has large one-off items impacting its financial results. One-off items were 39% of the size of the rest of the company's trailing 12-month earnings before tax. This is considered a minor risk. One-off items are incomes or expenses that the company does not expect to repeat in future periods. Examples include profits from the sale of a business or expenses from a restructuring or legal settlements. If the company's reported statutory earnings include a large proportion of one-off items it means they may be an unreliable indicator of its true business performance as the earnings were skewed by these incomes or expenses. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 8.0% per year for the foreseeable future. Minor Risks Large one-off items impacting financial results. Profit margins are more than 30% lower than last year (7.9% net profit margin). Reported Earnings • Feb 08
Third quarter 2025 earnings: EPS exceeds analyst expectations while revenues lag behind Third quarter 2025 results: EPS: JP¥94.82 (up from JP¥33.10 in 3Q 2024). Revenue: JP¥150.7b (up 1.6% from 3Q 2024). Net income: JP¥17.2b (up 130% from 3Q 2024). Profit margin: 11% (up from 5.1% in 3Q 2024). Revenue missed analyst estimates by 4.7%. Earnings per share (EPS) exceeded analyst estimates by 42%. Revenue is forecast to grow 3.5% p.a. on average during the next 3 years, compared to a 5.0% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 32% per year but the company’s share price has fallen by 4% per year, which means it is significantly lagging earnings. Duyuru • Feb 08
Kansai Paint Co., Ltd. Revises Consolidated Earnings Guidance for the Fiscal Year Ending March 31, 2025 Kansai Paint Co., Ltd. revised consolidated earnings guidance for the fiscal year ending March 31, 2025. For the year, the company expects net sales of JPY 580,000 million compared to previous guidance of JPY 610,000 million, operating income of JPY 52,000 million compared to previous guidance of JPY 56,000 million, Net income attributable to owners of parent of JPY 40,000 million compared to previous guidance of JPY 40,000 million and basic earnings per share of JPY JPY 210.70 million compared to previous guidance of 207.44. Buy Or Sell Opportunity • Jan 28
Now 20% undervalued after recent price drop Over the last 90 days, the stock has fallen 15% to JP¥2,109. The fair value is estimated to be JP¥2,638, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 13% over the last 3 years. Earnings per share has grown by 34%. For the next 3 years, revenue is forecast to grow by 3.6% per annum. Earnings are forecast to decline by 1.8% per annum over the same time period. Buy Or Sell Opportunity • Jan 10
Now 21% undervalued after recent price drop Over the last 90 days, the stock has fallen 15% to JP¥2,116. The fair value is estimated to be JP¥2,666, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 13% over the last 3 years. Earnings per share has grown by 34%. For the next 3 years, revenue is forecast to grow by 3.6% per annum. Earnings are forecast to decline by 1.8% per annum over the same time period. Declared Dividend • Dec 04
First half dividend of JP¥22.00 announced Dividend of JP¥22.00 is the same as last year. Ex-date: 28th March 2025 Payment date: 30th June 2025 Dividend yield will be 2.0%, which is lower than the industry average of 2.2%. Sustainability & Growth Dividend is well covered by both earnings (25% earnings payout ratio) and cash flows (33% cash payout ratio). The dividend has increased by an average of 12% per year over the past 10 years and has been stable with no material reductions to payments, indicating a long track record of dividend growth and stability. EPS is expected to grow by 16% over the next 3 years, which should provide support to the dividend and adequate earnings cover. Buy Or Sell Opportunity • Nov 11
Now 20% undervalued after recent price drop Over the last 90 days, the stock has fallen 12% to JP¥2,208. The fair value is estimated to be JP¥2,762, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 13% over the last 3 years. Earnings per share has grown by 34%. For the next 3 years, revenue is forecast to grow by 3.4% per annum. Earnings are forecast to decline by 1.2% per annum over the same time period. Reported Earnings • Nov 09
Second quarter 2025 earnings: EPS misses analyst expectations Second quarter 2025 results: EPS: JP¥19.85 (down from JP¥39.05 in 2Q 2024). Revenue: JP¥148.7b (up 8.1% from 2Q 2024). Net income: JP¥3.81b (down 57% from 2Q 2024). Profit margin: 2.6% (down from 6.4% in 2Q 2024). The decrease in margin was driven by higher expenses. Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 52%. Revenue is forecast to grow 3.4% p.a. on average during the next 3 years, compared to a 5.1% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 34% per year but the company’s share price has fallen by 5% per year, which means it is significantly lagging earnings. Upcoming Dividend • Sep 20
Upcoming dividend of JP¥22.00 per share Eligible shareholders must have bought the stock before 27 September 2024. Payment date: 04 December 2024. Payout ratio is a comfortable 21% and this is well supported by cash flows. Trailing yield: 1.7%. Lower than top quartile of Japanese dividend payers (3.8%). Lower than average of industry peers (2.4%). Reported Earnings • Aug 12
First quarter 2025 earnings: EPS exceeds analyst expectations First quarter 2025 results: EPS: JP¥57.45 (down from JP¥165 in 1Q 2024). Revenue: JP¥145.4b (up 6.6% from 1Q 2024). Net income: JP¥11.9b (down 68% from 1Q 2024). Profit margin: 8.2% (down from 28% in 1Q 2024). The decrease in margin was driven by higher expenses. Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 30%. Revenue is forecast to grow 4.0% p.a. on average during the next 3 years, compared to a 5.5% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 41% per year but the company’s share price has fallen by 4% per year, which means it is significantly lagging earnings. New Risk • Jul 25
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Japanese stocks, typically moving 5.2% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 18% per year for the foreseeable future. Minor Risks Share price has been volatile over the past 3 months (5.2% average weekly change). Large one-off items impacting financial results. Declared Dividend • Jul 11
Final dividend of JP¥22.00 announced Shareholders will receive a dividend of JP¥22.00. Ex-date: 27th September 2024 Payment date: 4th December 2024 Dividend yield will be 1.7%, which is lower than the industry average of 2.2%. Sustainability & Growth Dividend is well covered by both earnings (12% earnings payout ratio) and cash flows (19% cash payout ratio). The dividend has increased by an average of 12% per year over the past 10 years and has been stable with no material reductions to payments, indicating a long track record of dividend growth and stability. EPS is expected to decline by 26% over the next 3 years. However, it would need to fall by 87% to increase the payout ratio to a potentially unsustainable range. Duyuru • May 31
Kansai Paint Co., Ltd. (TSE:4613) announces an Equity Buyback for 40,000,000 shares, representing 19.01% for ¥80,000 million. Kansai Paint Co., Ltd. (TSE:4613) announces a share repurchase program. Under the program, the company will repurchase up to 40,000,000 shares, representing 19.01% of its issued share capital (excluding treasury stock), for ¥80,000 million. The purpose of the program is to improve capital efficiency and expand shareholder returns. Repurchased shares will be cancelled. The program will run until May 30, 2025. As of April 30, 2024, the company had 210,420,958 shares in issue (excluding treasury stock) and 512 shares in treasury. Valuation Update With 7 Day Price Move • May 31
Investor sentiment improves as stock rises 18% After last week's 18% share price gain to JP¥2,620, the stock trades at a forward P/E ratio of 15x. Average forward P/E is 13x in the Chemicals industry in Japan. Total loss to shareholders of 4.8% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at JP¥2,333 per share. Price Target Changed • May 12
Price target decreased by 7.7% to JP¥2,503 Down from JP¥2,712, the current price target is an average from 8 analysts. New target price is 20% above last closing price of JP¥2,083. Stock is down 2.2% over the past year. The company is forecast to post earnings per share of JP¥162 for next year compared to JP¥299 last year. Duyuru • May 11
Kansai Paint Co., Ltd approves to Pay Dividends of Surplus, Payable June 28, 2024 Kansai Paint Co., Ltd. announced that it has resolved, at a meeting of the Board of Directors held on May 10, 2024, to pay dividends of surplus with a record date of March 31, 2024. The details are described below. Further, this resolution is to be proposed at the general meeting of shareholders to be held on June 27, 2024. Dividend Per share: JPY 22.00. Effective date June 28, 2024. Total amount of dividends JPY 4,629 million .Record date: March 31, 2024. Upcoming Dividend • Mar 21
Upcoming dividend of JP¥20.00 per share Eligible shareholders must have bought the stock before 28 March 2024. Payment date: 01 July 2024. Payout ratio is a comfortable 12% and this is well supported by cash flows. Trailing yield: 1.6%. Lower than top quartile of Japanese dividend payers (3.2%). Lower than average of industry peers (2.1%). Duyuru • Mar 15
Kansai Paint Co., Ltd., Annual General Meeting, Jun 27, 2024 Kansai Paint Co., Ltd., Annual General Meeting, Jun 27, 2024. Duyuru • Feb 28
Kansai Paint Co., Ltd. Announces Management Changes, Effective April 1, 2024 Kansai Paint Co., Ltd. announced that the Company determined the increase of representative at the meeting of the Board. Detail of the change: Scheduled date of the change is April 1, 2024. Representative Director and Senior Managing Executive Officer, and Chief of International Business Unit is NISHIBAYASHI Hitoshi (Present post - Director of the Board, Managing Executive Officer, and Chief of International Business Unit). Career of the new representative director, etc.: Born on May 31, 1963 . Career: April 1987 - Joined Kansai Paint, April 2015 - Deputy Head of Automotive Refinish, Decorative and Protective Coatings Business Div., April 2019 - Executive Officer, and Deputy General Manager of Corporate Business Development Div., June 2020 - Director of the Board, Managing Executive Officer, and Head of International Business Unit., July 2020 - Director of the Board, and Managing Executive Officer in charge of Corporate Planning & Finance, April 2021- Director of the Board, Managing Executive Officer, and Chief of International Business Unit (current). Duyuru • Feb 22
Kansai Paint Co., Ltd. (TSE:4613) announces an Equity Buyback for 20,000,000 shares, representing 8.78% for ¥40,000 million. Kansai Paint Co., Ltd. (TSE:4613) announces a share repurchase program. Under the program, the company will repurchase up to 20,000,000 shares, representing 8.78% of its issued share capital (excluding treasury stock), for ¥40,000 million. The purpose of the program is improving capital efficiency such as ROE and net income per share (EPS) and increasing shareholder returns. Repurchased shares will be cancelled. The program will run until February 21, 2025. As of January 31, 2024, the company had 227,887,041 shares in issue (excluding treasury stock) and 10,736,229 shares in treasury. Reported Earnings • Feb 10
Third quarter 2024 earnings: Revenues exceed analysts expectations while EPS lags behind Third quarter 2024 results: EPS: JP¥33.10 (up from JP¥18.87 in 3Q 2023). Revenue: JP¥148.3b (up 12% from 3Q 2023). Net income: JP¥7.49b (up 70% from 3Q 2023). Profit margin: 5.1% (up from 3.3% in 3Q 2023). Revenue exceeded analyst estimates by 2.8%. Earnings per share (EPS) missed analyst estimates by 24%. Revenue is forecast to grow 4.3% p.a. on average during the next 3 years, compared to a 5.7% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 46% per year but the company’s share price has fallen by 9% per year, which means it is significantly lagging earnings. Buy Or Sell Opportunity • Feb 01
Now 20% undervalued Over the last 90 days, the stock has risen 11% to JP¥2,467. The fair value is estimated to be JP¥3,085, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 15% over the last 3 years. Earnings per share has grown by 44%. For the next 3 years, revenue is forecast to grow by 4.9% per annum. Earnings are forecast to decline by 19% per annum over the same time period. Reported Earnings • Nov 10
Second quarter 2024 earnings: EPS exceeds analyst expectations while revenues lag behind Second quarter 2024 results: EPS: JP¥39.05 (up from JP¥24.61 in 2Q 2023). Revenue: JP¥137.6b (up 5.6% from 2Q 2023). Net income: JP¥8.84b (up 49% from 2Q 2023). Profit margin: 6.4% (up from 4.5% in 2Q 2023). Revenue missed analyst estimates by 1.2%. Earnings per share (EPS) exceeded analyst estimates by 1.5%. Revenue is forecast to grow 4.3% p.a. on average during the next 3 years, compared to a 4.9% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 44% per year but the company’s share price has fallen by 9% per year, which means it is significantly lagging earnings. Buying Opportunity • Oct 04
Now 21% undervalued after recent price drop Over the last 90 days, the stock is down 5.0%. The fair value is estimated to be JP¥2,537, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 13% over the last 3 years. Earnings per share has grown by 36%. Revenue is forecast to grow by 6.5% in 2 years. Earnings is forecast to decline by 39% in the next 2 years. Upcoming Dividend • Sep 21
Upcoming dividend of JP¥18.00 per share at 1.6% yield Eligible shareholders must have bought the stock before 28 September 2023. Payment date: 04 December 2023. Payout ratio is a comfortable 12% and this is well supported by cash flows. Trailing yield: 1.6%. Lower than top quartile of Japanese dividend payers (3.3%). Lower than average of industry peers (2.5%). New Risk • Aug 09
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 19% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 19% per year for the foreseeable future. Minor Risk Large one-off items impacting financial results. Reported Earnings • Aug 09
First quarter 2024 earnings released: EPS: JP¥165 (vs JP¥25.18 in 1Q 2023) First quarter 2024 results: EPS: JP¥165 (up from JP¥25.18 in 1Q 2023). Revenue: JP¥136.4b (up 13% from 1Q 2023). Net income: JP¥37.6b (up 483% from 1Q 2023). Profit margin: 28% (up from 5.4% in 1Q 2023). Revenue is forecast to grow 3.5% p.a. on average during the next 3 years, compared to a 4.2% growth forecast for the Chemicals industry in Japan. Over the last 3 years on average, earnings per share has increased by 36% per year but the company’s share price has remained flat, which means it is significantly lagging earnings. Major Estimate Revision • Jul 19
Consensus EPS estimates increase by 12% The consensus outlook for fiscal year 2024 has been updated. 2024 EPS estimate increased from JP¥176 to JP¥197. Revenue forecast steady at JP¥552.0b. Net income forecast to grow 78% next year vs 2.5% growth forecast for Chemicals industry in Japan. Consensus price target broadly unchanged at JP¥2,439. Share price rose 4.3% to JP¥2,178 over the past week.