Sekisui Chemical (4204): Japan F3/27 2Q Results: Above Consensus

Sekisui Chemical reported 2Q results after market close on Oct 30. 2Q OP came to ¥35bn (+44% YoY), beating the company's ¥22.5bn by ¥12.4bn. On a segment level, upside in High Performance Plastics accounted for ¥8.1bn of the overshoot, with semiconductor-related materials, materials for new smartphone models, and aircraft-related materials all putting up a good showing within the segment. In light of 2Q results, Sekisui Chemical raised its full-year OP guidance from ¥115bn to ¥123bn, with High Performance Plastics accounting for ¥7bn of the increase. The company expects a pullback from 1H for some products, including a lower sales of materials for new smartphone models in 2H. In the Housing segment, it anticipates close to a ¥3bn OP contribution from the consolidation of an Australian residential land development and housing construction company in 4Q. We remain Underweight with a price target of ¥2,200.