Global Materials | Industrials | Commodities

Rahul Jain

Equity Bottom-Up

<ul>
<li>Semiconductor segment drives structural margin expansion, now contributing over 100% of core profit with record Q3 performance.</li>
<li>Legacy Chemicals and Graphite remain weak, but consolidated EBITDA outlook for FY2026–27 strengthens on improving mix.</li>
<li>Forward valuation supports ¥8,000 target; Resonac trades at a discount to global semiconductor-materials peers despite rising semis exposure.</li>
</ul>


Semiconductor segment drives structural margin expansion, now contributing over 100% of core profit with record Q3 performance.
Legacy Chemicals and Graphite remain weak, but consolidated EBITDA outlook for FY2026–27 strengthens on improving mix.
Forward valuation supports ¥8,000 target; Resonac trades at a discount to global semiconductor-materials peers despite rising semis exposure.


Resonac Holdings – Improving Mix, Expanding Margins, and a Clear Case for Re-Rating

<ul>
<li>Resonac continues to reshape its portfolio, scaling growth materials while rationalising legacy chemicals and electrodes.</li>
<li>FY2025 guidance appears conservative, particularly on profit, leaving room for upside if current momentum is sustained.</li>
<li>Valuation &amp; risk: Shares trade at a discount to global peers, with re-rating potential contingent on execution and balance sheet discipline.</li>
</ul>


Resonac continues to reshape its portfolio, scaling growth materials while rationalising legacy chemicals and electrodes.
FY2025 guidance appears conservative, particularly on profit, leaving room for upside if current momentum is sustained.
Valuation &amp; risk: Shares trade at a discount to global peers, with re-rating potential contingent on execution and balance sheet discipline.


Resonac Holdings – Strategic Transition and Re-Rating Potential

<ul>
<li>Past Performance: Revenues stable; margins improved due to semiconductor growth, despite weak performance in legacy chemicals and graphite electrodes.</li>
<li>Strategy &amp; Shutdown: Shutting 30% electrode capacity; refocusing on high-margin semiconductor, SiC, and packaging materials with ¥330 bn capex planned by FY25.</li>
<li>Valuation: Trades at 8x EV/EBITDA and 14x P/E FY25E; re-rating possible with higher margins and semiconductor mix.</li>
</ul>


Past Performance: Revenues stable; margins improved due to semiconductor growth, despite weak performance in legacy chemicals and graphite electrodes.
Strategy &amp; Shutdown: Shutting 30% electrode capacity; refocusing on high-margin semiconductor, SiC, and packaging materials with ¥330 bn capex planned by FY25.
Valuation: Trades at 8x EV/EBITDA and 14x P/E FY25E; re-rating possible with higher margins and semiconductor mix.


Resonac Holdings (TSE: 4004) – Strategic Pivot Toward Semiconductor Materials

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>Since the announcement of the US$0.8 billion secondary offering, <a href="https://www.smartkarma.com/entities/toyoda-gosei-co-ltd" target="_blank" data-smartkarma-citation="entities:20125:1" rel="noopener">Toyoda Gosei (7282 JP)</a>’s shares have declined 4.9% to the undisturbed price of JPY3,754 per share (20 November).</li>
<li>It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Toyoda's share decline is better than the median of recent large placements.</li>
<li>The offering will likely be priced on 1 December. The average large Japanese placement tends to generate positive returns.</li>
</ul>


Since the announcement of the US$0.8 billion secondary offering, Toyoda Gosei (7282 JP)’s shares have declined 4.9% to the undisturbed price of JPY3,754 per share (20 November).
It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Toyoda's share decline is better than the median of recent large placements.
The offering will likely be priced on 1 December. The average large Japanese placement tends to generate positive returns.


Toyoda Gosei (7282 JP): The Current Playbook

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toyoda-gosei-co-ltd" target="_blank" data-smartkarma-citation="entities:20125:1" rel="noopener">Toyoda Gosei (7282 JP)</a> has announced a secondary offering of up to 29.7 million shares (34.2 million including overallotment), worth around US$0.7 billion (US$0.8 billion including overallotment).</li>
<li>Toyoda Gosei's primary goal with the secondary offering is to reduce <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a>'s shareholding to around 20% of outstanding shares.</li>
<li>The offering as a percentage of outstanding shares and ADV is large compared to recent large placements. The likely pricing date is 1 December.</li>
</ul>



Toyoda Gosei (7282 JP) has announced a secondary offering of up to 29.7 million shares (34.2 million including overallotment), worth around US$0.7 billion (US$0.8 billion including overallotment).
Toyoda Gosei's primary goal with the secondary offering is to reduce Toyota Motor (7203 JP)'s shareholding to around 20% of outstanding shares.
The offering as a percentage of outstanding shares and ADV is large compared to recent large placements. The likely pricing date is 1 December.


Toyoda Gosei (7282 JP): A US$0.8 Billion Secondary Offering

Japan

Resonac Holdings Corporation manufactures and distributes chemical products. The Company produces synthetic resins, petrochemical products, inorganics, and other related products. Resonac Holdings also produces ceramics, metals, carbon, electronic materials, and other products.

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Resonac Holdings (4004 JP)

Resonac Holdings – Improving Mix, Expanding Margins, and a Clear Case for Re-Rating

Semiconductor segment boosts core profit, driving margin expansion and strengthening EBITDA outlook for Resonac. Target price of ¥8,000 reflects...

Rahul Jain

Resonac Holdings – Strategic Transition and Re-Rating Potential

Resonac is focusing on growth materials, with potential for upside in profit if momentum continues, while trading at a discount to peers with re...

Rahul Jain

Resonac Holdings (TSE: 4004) – Strategic Pivot Toward Semiconductor Materials

Article highlights stable revenues and improved margins in semiconductor sector, with plans to shut down electrode capacity and focus on high...

Rahul Jain

Toyoda Gosei (7282 JP): The Current Playbook

The offering will likely be priced on 1 December. The average large Japanese placement tends to generate positive returns.

Arun George

Toyoda Gosei (7282 JP): A US$0.8 Billion Secondary Offering

The offering as a percentage of outstanding shares and ADV is large compared to recent large placements. The likely pricing date is 1 December.

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Resonac Holdings – Improving Mix, Expanding Margins, and a Clear Case for Re-Rating

​Semiconductor segment boosts core profit, driving margin expansion and strengthening EBITDA outlook for Resonac. Target price of ¥8,000 reflects...

Rahul Jain

Resonac Holdings – Strategic Transition and Re-Rating Potential

​Resonac is focusing on growth materials, with potential for upside in profit if momentum continues, while trading at a discount to peers with re...

Rahul Jain

Resonac Holdings (TSE: 4004) – Strategic Pivot Toward Semiconductor Materials

​Article highlights stable revenues and improved margins in semiconductor sector, with plans to shut down electrode capacity and focus on high...

Rahul Jain

Toyoda Gosei (7282 JP): The Current Playbook

The offering will likely be priced on 1 December. The average large Japanese placement tends to generate positive returns.

Arun George

Toyoda Gosei (7282 JP): A US$0.8 Billion Secondary Offering

The offering as a percentage of outstanding shares and ADV is large compared to recent large placements. The likely pricing date is 1 December.

Arun George

Semiconductor segment boosts core profit, driving margin expansion and strengthening EBITDA outlook for Resonac. Target price of ¥8,000 reflects...

Resonac is focusing on growth materials, with potential for upside in profit if momentum continues, while trading at a discount to peers with re...

Article highlights stable revenues and improved margins in semiconductor sector, with plans to shut down electrode capacity and focus on high...