1、M IdeaMid Small Cap/Manufacturer|JapanSummer 2025 Investment Strategy for Semi Materials Earnings at gen AI related semiconductor and packaging materials firms look strong.However,excluding price revisions,we cant expect rapid earnings growth for materials companies,which rely on actual demand;caref

2、ul trading around results is necessary to improve performance.We highlight Fuso Chemical(mid/long-term sales growth,lower amortization expense).Morgan Stanley MUFG Securities Co.,Ltd.+Yoshihito HasegawaEquity Analyst Yoshihito.H +81 3 6836-8910 Lian Jing,CFAResearch Associate Lian.J +81 3 6836-5439

3、Mid Small Cap/ManufacturerJapanIndustry ViewIn-Line Whats Changed Ticker CompanyRatingOldNew3104Fujibo HoldingsOW6,4007,1003110Nitto BosekiOWEW5,9007,2004187Osaka Organic Chemical In EWOW2,4003,5004368Fuso ChemicalEWOW3,5006,0004369Tri Chemical LaboratoriesOWEW3,3003,8004626Taiyo HoldingsOWEW6,2006,

4、7004970Toyo GoseiOW5,9006,4004971MECOW2,8003,2006140Asahi Diamond Industrial OWEW1,2008307917ZACROSOW4,7004,700PT(JPY)Share price outlook for semi material-related small/mid-sized manufacturers:Amid solid semiconductor production overall,earnings diverge due to trends in(1)demand for AI-related devi

5、ces,(2)sales to China market,(3)product sales price setting,and(4)fixed costs(depreciation,labor).Share prices of Nittobo and Tri Chemical Lab seem to reflect their product competitiveness and high market share,but as results approach we must be mindful of quarterly performance momentum and market e

6、xpectations,etc.Also(tied to disclosure policy)watching possibility of guidance revisions.With almost all their customers outside the US,the direct impact of US tariff policy on semi materials firms is minimal,but a decline in demand due to price increases in final products such as autos,smartphones