Bayon Financial

Graeme Cunningham

Mr. Cunningham is a CFA Charterholder with over 15 years of experience as an equity research analyst, mostly on the sell side at investment banks, including Goldman and Jefferies, and with some time on the buy side. He has covered the consumer, telecoms, financials, energy and mining sectors, with a focus mainly on Southeast Asia, including Thailand and Vietnam.

Independent Insight Provider

Bayon Financial provides industry and company analysis focusing on mid and small cap equity research coverage across a range of sectors including mining, financials and telecoms.

Equity Bottom-Up

<ul>
<li>Shin-Etsu Chemical’s fiscal Q1/26 results were inline with expectations, with EBIT down -12.6% yoy as margins declined yoy for all of its divisions </li>
<li>However, FY26E guidance disappointed markets, with a -14.4% decline in operating income, well below consensus’ already weak 0.6% forecast, and the stock fell -9.5%</li>
<li>Shin-Etsu has trades at a P/B premium to the Japan chemical sector even with a lower ROE, providing limited valuation support especially given a weak operating outlook </li>
</ul>


Shin-Etsu Chemical’s fiscal Q1/26 results were inline with expectations, with EBIT down -12.6% yoy as margins declined yoy for all of its divisions 
However, FY26E guidance disappointed markets, with a -14.4% decline in operating income, well below consensus’ already weak 0.6% forecast, and the stock fell -9.5%
Shin-Etsu has trades at a P/B premium to the Japan chemical sector even with a lower ROE, providing limited valuation support especially given a weak operating outlook 


Shin-Etsu Chemical: Full Year Guidance Disappoints

Shin Etsu Chemical

Shin-Etsu Chemical: Full Year Guidance Disappoints