Sumitomo Osaka Cement (5232) — Model update: Revising price target to ¥2,167 due to stock split

J.P. Morgan reiterates Overweight on Sumitomo Osaka Cement (5232.T) and revises its December 2027 price target to ¥2,167 from ¥6,500 to reflect a 3-for-1 stock split effective October 1, 2026; earnings estimates are unchanged (FY27E adjusted EPS 120.84 vs 362.53 previously, FY28E 193.35 vs 580.05, both -66.7%). The target is based on FY2027 EPS of about ¥193.4 and a P/E of roughly 14x, derived from an SOTP model using 25x for advanced materials and 9x for other businesses including cement, with a 20% discount for limited synergies and lower profitability versus peers. The company's cement facilities are all in Japan and face declining domestic demand, but earnings should expand via price revisions and growth in non-cement businesses, mainly electrostatic chucks. Upside risks: rapid growth in new businesses, higher Japanese cement demand with price hikes, lower thermal coal prices. Downside risks: weaker domestic cement demand and higher thermal coal prices.