Chugai Pharmaceutical (4519.T): Q3 somewhat positive, mainly on front-loaded domestic shipments, but exports also strong

In Q3, revenue rose 21.5% YoY and core OP increased 15.9% to ¥206.9bn, beating consensus of ¥176.0bn and Citi's forecast of ¥200.8bn. Since Roche's results last week revealed the existence of front-loaded shipments and progress with budget usage, we do not see results as causing a major market surprise. Royalties from outside Roche rose 60% QoQ to ¥7.4bn; we believe royalties from Nemluvio and Foundayo contributed. Although we expect a reaction to the front-loaded shipments in Q4, we see full-year results overshooting guidance, as Actemra exports should beat the full-year company estimate, while Roche also raised its Hemlibra guidance. We maintain our bullish stance, as market expectations for Foundayo have been revised, we expect profit growth next FY as well, and the number of upcoming R&D events is increasing. We view the results as somewhat positive for the stock given their strength, and expect Giredestrant, the breast cancer treatment commanding much global attention (peak annual