Teijin (3401) FY17 Q1 Results Comment – Modest Increase to Guidance...
Key Points
- Teijin’s shares rose 2.6% in reaction to a strong FY17 Q1 result and a modest upward earnings revision announced at midday on Aug 1st. The company revised up H1 OP guidance by ¥3bn, but for the full year by only ¥2.0bn, to ¥64.0bn. Consensus was already in that region, so the surprise value appears limited.
- Healthcare exceeded initial guidance thanks to licensing fees and restructuring measures. Teijin raised FY17 OP guidance by ¥2.5bn. The company received ¥3bn in Q1 from Merck & Co (US) for rights to its anti-tau antibody for Alzheimer’s disease, still in preclinical development. If successful, the deal could be worth at least US$300m (for more details, please refer to our May 26th PSA Weekly). Full year OP is being boosted by an estimated ¥6.5bn from Teijin’s withdrawal from the US healthcare business. R&D and in-licensing costs are expected to grow significantly, though costs may be near peak levels.
- Aramid fiber is performing well for auto and other applications, and Teijin may be growing market share. Polycarbonate spreads remain relatively resilient. The addition of Continental Structural Plastics (US) is boosting sales, but represents a minor drag on profits still, after goodwill. There was little discussion today of carbon fiber.
- LiB separators are behind target. Presentation materials alluded to increased competition, and today August 1st it was reported that Toray (3402) has expansion plans in Europe; but slower smartphone adoption in H1 appears to be the primary factor in this period.
Teijin and its affiliates are mainly engaged in the fiber-related business. Co.'s operation is divided into two business segments: Materials Business and Healthcare Business. Materials Business focuses on high-performance fibers, such as aramid fibers and carbon fibers, as well as polycarbonate resin and polyester film. It also produces and sells Polyester and recycled polyester fabrics and textiles. Healthcare Business provides pharmaceuticals for bone and joint disease, respiratory disease, cardiovascular and metabolic disease as wel as healthcare products. Co. also provides various IT services, along with internet services such as e-comics services.
Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods.
PSA produces both company and sector reports. The focus of PSA’s research is to identify winners and losers as new technologies impact the top and bottom lines of corporations. Critical to our research is the clear explanation of how these new technologies work and how they impact companies and industries.
The founding partners have worked closely together for twenty years and the team has more than doubled in size since 2012.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.