QUICK Corp.

Equity Bottom-Up

<div>
<p style="text-align: left;"><strong>Aggressive investment in R&amp;D while improving profitability</strong></p>
<p style="text-align: left;">QUICK Corporate Valuation Research Center forecasts consolidated results (International Financial Reporting Standards: IFRS) for FY3/22 as sales revenue at JPY3.384tn (+6% YoY), OP at JPY508bn (unchanged YoY), while NP at JPY264bn (-30% YoY) due to the absence of deferred tax benefits (negative tax expenses) associated with the business restructuring expenses incurred in FY3/21 in Japan. The assumed exchange rates are USD1 = JPY110…</p>
</div>

<div>
<p style="text-align: left;"><strong>Revision of the forecast for the assumed tax rate revision<br></strong>QUICK Corporate Valuation Research Center has also revised forecasts for FY3/22 and FY3/23 in light of the FY3/21 revisions. For FY3/22, we have revised our forecast for sales revenue from JPY3.144tn to JPY3.114tn (-3% YoY), forecast for OP from JPY622bn to JPY742bn (+69% YoY), and the forecast for NP from JPY334bn to JPY412bn (2.2x YoY) after revising the assumed tax rate. For FY3/23, we have revised our forecast for sales revenue from…</p>
</div>

Morningstar

Morningstar, Inc.

We updated our model and estimates to reflect narrow-moat Takeda’s new reporting segments, balance sheet, and guidance. Our fair value remains unchanged at JPY 5,100 per share. Despite management’s affirmation of the company’s long-term margin expansion, the stock trades at a 23% discount to our fair value
Our revenue assumptions have fallen to JPY 3.3 trillion in 2028, whereas we projected JPY 4.0 trillion in our previous model. This incorporates several changes, including lower forecasts for…

Takeda reported full-year earnings with lower-than-expected IFRS numbers, but better-than-expected core earnings after removing the one-off cash charges from acquisition-related costs, and non-cash costs from purchase accounting. Additionally, management gave updated guidance on synergies and cost-cutting initiatives that is in line with our positive view of the company’s long-term margin expansion ability. We are reviewing our model but we do not expect a major change in fair value
Takeda…

<p>Takeda’s earnings were strong this quarter, driven by strong margin expansion and continued growth of its key drugs. Its R&amp;D progress was mixed but fairly inconsequential. At the same time, we are transferring coverage to a new analyst, and have decided to upgrade its moat rating to narrow in consideration of Shire’s assets and global footprint. Finally, we are maintaining our fair value estimate of JPY 5,100 per share. While we raised our WACC due to the more global nature of Takeda’s business…</p>

Japan

Takeda Pharmaceutical Co Ltd focuses on the Research & Development, Manufacturing, Sales and Marketing and Import/Export of Pharmaceutical Drugs. The Company focuses on the following core therapeutic areas: Cardiovascular & Metabolic, Oncology, Central Nervous System, Respiratory & Immunology, General Medicine (Gastrointestinal & Genitourinary) and Vaccine.