Tosoh Corporation Overview
Tosoh is one of Asia's largest chlor-alkali producers. It is a vertically integrated Japanese chemical group that uses two highly integrated complexes, Nanyo (Yamaguchi) and Yokkaichi (Mie), to run product chains starting from salt electrolysis and naphtha cracking. Those chains feed into caustic soda, VCM/PVC, MDI/HDI urethanes, polyethylene, chloroprene rubber and cement.
On top of this commodity base, Tosoh has built a portfolio of high-margin "advanced" businesses:
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bioscience: chromatography media and HbA1c and immunoassay diagnostics;
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advanced materials: zirconia, high-silica zeolite, quartz glass, sputtering targets and electrolytic manganese dioxide;
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ultrapure-water engineering for leading-edge semiconductor fabs, through its listed subsidiary Organo.
In FY2026 these advanced businesses generated about two-thirds of group operating income on roughly 37% of sales. The investment case rests on that barbell: cyclical, cash-generative chlorine and olefin chains that are exposed to Chinese oversupply and naphtha shocks, paired with structurally growing semiconductor and life-science franchises. Capital returns are anchored by a ¥100 dividend floor and a 50% total payout policy.
What the company does
Tosoh makes and sells basic chemicals, petrochemicals, fine and specialty chemicals, diagnostics and analytical instruments, electronic materials, and water-treatment systems. JCR's July 2025 rating rationale describes the group in two parts:
Chemical Chain Business: This produces everything from basic chemicals (olefins, polymers, chemicals, urethanes, cement) to value-added chemicals (functional polymers, functional urethanes, organic chemicals). Production is organized as one integrated product chain that starts from salt electrolysis and naphtha cracking.
Advanced Technologies Business: This covers bioscience, advanced materials and water treatment. It relies on the infrastructure, utilities and technological base of the chain business.
The company's own description in its English releases is that it is "one of the largest chlor-alkali manufacturers in Asia." It supplies plastic resins and basic chemicals, runs petrochemical operations (ethylene, polyethylene, functional polymers), and serves the semiconductor, display and solar industries through advanced materials. Its bioscience systems are used to monitor life-threatening diseases.
Business model and revenue model
| Revenue type | Where it arises | Characterization |
|---|---|---|
| Product sales, priced off commodity indices | Olefins, PVC/VCM, caustic soda, MDI, cement, polyethylene | Volume times price. Prices track naphtha, Asian spot markets and USD/JPY; margins track "terms of trade" and inventory valuation gains or losses. |
| Specialty product sales | Chloroprene rubber, HDI hardeners, ethyleneamines, bromine, zirconia, zeolite, quartz glass, sputtering targets, EMD | Contract or negotiated pricing with higher value-add. Some products (quartz, targets) are tied to semiconductor capex and wafer-start cycles. |
| Razor/blade consumables and instruments | Bioscience: chromatography media (TSKgel, TOYOPEARL), diagnostic reagents, HbA1c and immunoassay analyzers | Recurring reagent and media revenue on an installed base. JCR cites bioscience as having "established recurring revenue models." |
| Project engineering (percentage of completion) | Water-treatment engineering (Organo): ultrapure-water plants for semiconductor fabs in Japan, Taiwan and the US | Lumpy project revenue plus recurring "solutions": equipment-ownership services and maintenance. |
| Services | Logistics, warehousing, inspection and analysis, IT, construction and repair ("Other") | Captive or near-captive service revenue. |
Tosoh does not disclose a product/service/subscription/licensing split. Our independent estimate is directional only: well over 75% product sales, about 15–18% project engineering and services (water treatment plus other), and negligible licensing revenue.
Value-chain position
Tosoh sits upstream to midstream. It converts salt, purchased naphtha and coal-fired captive power into intermediates (caustic soda, chlorine, ethylene, VCM, MDI) and resins, and it consumes much of its own chlorine and ethylene internally. Its advanced businesses sit further downstream as component and consumable suppliers to:
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semiconductor fabs and equipment makers (quartz glass, sputtering targets, ultrapure water);
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biopharma (purification resins);
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clinical laboratories (diagnostics);
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dental and decorative ceramics (zirconia);
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automotive emissions control (zeolite).
Customer types and end-markets
Customers include PVC fabricators, construction and infrastructure contractors, automotive tier-1 suppliers, coatings and adhesives makers, tire and industrial rubber makers, foam producers, semiconductor fabs and toolmakers, display makers, biopharmaceutical manufacturers, hospitals and clinical labs, dental laboratories, and battery makers.
Principal end-markets are construction and housing, automotive, electronics and semiconductors, healthcare and pharma, and general industry. Sales split almost evenly between Japan (49.6%) and overseas (50.4%) in FY2026.
Independent characterization
Tosoh is best understood as a low-cost, scale-integrated Asian chlor-alkali and urethane producer that has used its cash flows to compound three genuinely differentiated niches:
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bioscience separations and diagnostics, with a segment operating margin of about 28% in FY2026;
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semiconductor water engineering, at about 21.5%;
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engineered ceramics and catalysts.
The commodity chain sets the volatility of earnings; the advanced businesses set the floor. FY2026 illustrated this clearly. Basic Materials earned only about JPY 0.1bn of operating income on JPY 450bn of sales (restated), while the advanced businesses earned about JPY 64bn.
Strategy
Medium-Term Business Plan, FY2026–FY2028 (announced 23 May 2025)
Tosoh calls this the "2025–2027年度" plan. Its core themes, paraphrased from company and analyst summaries:
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Portfolio reframing. Commodity/specialty labels are replaced by a Chemical Chain Business (salt electrolysis and naphtha-cracking chains, built on integration and efficiency) and an Advanced Technologies Business (strong positions in pharma and semiconductor markets, focused on higher profitability in growth markets).
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"Simultaneous achievement of growth and decarbonization" toward 2030.
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Chain Business: expand earnings from value-added chlorine derivatives and raise the share of value-added products (CR, HDI, ethyleneamines).
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Advanced Business: expand the revenue base, including through large-scale new businesses (for example GI POF and hydrogen membranes).
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Capital allocation: capex of JPY 220–250bn over three years, weighted toward strengthening the Chain Business plus decarbonization. Higher shareholder returns and better capital efficiency.
Financial targets
| Target | Value | Source / confidence |
|---|---|---|
| FY2028 net sales | JPY 1,183bn | EDINET-based summary of the plan document (the-shashi) |
| FY2028 operating income | JPY 140bn | Same |
| FY2028 ROE | 10% or higher | Same |
| Vision 2030 operating income | JPY 170bn | the-shashi. Note: TipRanks and others describe JPY 170bn as the plan target; we treat it as the 2030 vision, which is the more consistent reading. |
| GHG reduction | -30% by FY2030 vs FY2018; carbon neutrality "challenge" by 2050 | Integrated Report 2023; DitchCarbon |
| Capex FY2026–FY2028 | JPY 220–250bn | Company / JCR / finboard |
| Decarbonization investment | About JPY 120bn by FY2031 | Secondary source (growthsharematrix) |
| Shareholder returns | 50% total return ratio; JPY 100 per-share dividend floor; buybacks to top up if payout is below 50%; additional JPY 50bn of buybacks over three years | Company presentation, 13 May 2026; JCR |
Progress against targets. FY2026 operating income was JPY 95.5bn and FY2027 guidance is JPY 105bn. Reaching JPY 140bn in FY2028 would require roughly 33% growth in a single year, which looks unlikely on current guidance unless commodity chains recover sharply. FY2026 ROE was 5.0% against a 10%-plus target.
Initiatives announced in the last 24 months
| Initiative | Date | Detail |
|---|---|---|
| Separation-media capacity (Nanyo and Yokkaichi) | 2024–2027 | Phased expansions in autumn 2025, spring 2026 and spring 2027 |
| Sputtering-target capacity expansion | Completed Dec 2025 | Despite the impairment, positioned for the semiconductor recovery |
| Biomass power plant (Nanyo) | Operating May 2026 | Fuel conversion away from coal |
| CO2 capture and feedstock conversion | Operating Nov 2024 | Decarbonization pilot |
| HDI derivative capacity | Summer 2026 | Value-added urethanes |
| Vietnam crude MDI splitter | Spring 2027 | Downstream MDI in Southeast Asia (TVP project led by Kiuchi) |
| Chloroprene rubber capacity | Spring 2030 | Raises value-added share |
| ISCC PLUS certification (Yokkaichi) | Mar 2026 | Mass-balance bio and recycled products |
| GI POF for AI data centers | 2025–2029 | Keio collaboration; mass production targeted from 2029 |
| Zirconia dental-waste recycling | May 2026 | With Shofu, Mitsui Chemicals and Orbray |
| Organizational redesign: Chain Business HQ and Advanced Business HQ | June 2026 | Five new reporting segments |
| JPY 25bn share buyback | Aug 2025–Mar 2026 | 10.7m shares; the remaining JPY 25bn of the JPY 50bn program is under consideration for timing |
| Physical Internet joint rail transport (chemicals working group) | Mar 2026 | Logistics decarbonization |
Management guidance, FY2027 (4 August 2026)
| Item | H1 | H2 | FY2027F | FY2026 actual |
|---|---|---|---|---|
| Net sales (JPY bn) | 580.0 | 590.0 | 1,170.0 | 1,019.9 |
| Operating income (JPY bn) | 50.0 | 55.0 | 105.0 | 95.5 |
| Ordinary income (JPY bn) | 52.0 | 55.0 | 107.0 | 106.8 |
| Net income attributable (JPY bn) | 28.0 | 31.0 | 59.0 | 41.6 |
| EPS (JPY) | — | — | 191.63 | 132.40 |
| USD/JPY | 159.8 | 160.0 | 159.9 | 150.7 |
| Domestic naphtha (JPY/kl) | 104,250 | 77,000 | 90,625 | 65,200 |
| Capex (JPY bn) | — | — | 96.0 | 72.7 |
| Depreciation (JPY bn) | — | — | 53.0 | 46.2 |
| R&D (JPY bn) | — | — | 27.0 | 23.0 |
Products & Services
Brand names below follow Tosoh product literature. Product-level pricing is not publicly disclosed; pricing for commodity lines follows the market indices reported in Tosoh's presentations.
Basic Materials (Chain)
| Product line | Description / key capabilities | Target customers | Notes and latest data |
|---|---|---|---|
| Ethylene and propylene | Naphtha cracker at the Yokkaichi Complex | In-complex derivative units, polyolefin makers | FY2027 Q1 shipments fell on the Yokkaichi turnaround and naphtha procurement limits. Price is linked to domestic naphtha (JPY 118,500/kl in Q1 FY2027 vs JPY 66,300 a year earlier). |
| Cumene | Phenol/acetone feedstock | Phenol producers | Price follows the Asian market; benzene was USD 1,043/t in Q1 FY2027. |
| Polyethylene (LDPE, HDPE, L-LDPE, EVA) | Legacy brands Petrothene (LDPE), Nipolon (HDPE), Ultrathene (EVA) | Packaging, laminates, semiconductor-grade HDPE, solar encapsulant film | Semiconductor HDPE and laminating L-LDPE were strong in Q1 FY2027. EVA for solar encapsulants weakened in FY2026. |
| Caustic soda | Membrane electrolysis at Nanyo | Pulp and paper, alumina, chemicals, water treatment | FY2027F market assumption: USD 350–450/t. |
| VCM / PVC | Nanyo VCM capacity of about 1.2 Mt/y (per public profiles); PVC also at overseas affiliates (Philippines, China) | Pipe, profile and cable makers | PVC was USD 853/t in Q1 FY2027 vs USD 657 a year earlier. VCM output was curtailed in Q1 on feedstock procurement concerns. |
| MDI (monomeric and polymeric) | Integrated chlorine to MDI (Millionate brand, from NPU) | Rigid and flexible foam, CASE, spandex | Monomeric MDI was USD 2,266/t in Q1 FY2027. A crude MDI splitter in Vietnam is due spring 2027. |
| Cement | Nanyo cement plant using in-house power and by-products | Ready-mix, construction | FY2026 sales JPY 11.6bn; domestic price increases implemented. |
| Inorganic and organic commodity chemicals | Chlorine derivatives and others | Industrial users | — |
Value-Added Materials (Chain)
| Product line | Description / key capabilities | Target customers | Notes and latest data |
|---|---|---|---|
| Chloroprene rubber (CR; brand Skyprene) | One of few global CR producers; high-performance elastomer | Automotive belts and hoses, adhesives, wetsuits, wire and cable | Capacity expansion decided, start-up spring 2030. A CR composite series using cellulose nanofibers has been launched. Shipments and prices rose in Q1 FY2027 as Middle East disruption hit competing supply and butadiene prices. |
| HDI-based hardeners (Coronate line) | Aliphatic isocyanates for non-yellowing coatings | Automotive refinish, industrial coatings | HDI derivative capacity expansion scheduled for summer 2026. |
| Ethyleneamines | EDA, DETA and higher amines | Epoxy curing agents, chelants, lube additives | Asian inquiries surged in Q1 FY2027 on Middle East supply tightness. |
| Bromine and derivatives | Flame retardants and intermediates | Electronics, chemicals | Bromine market prices rose in FY2026. |
| Functional polymers and functional urethanes | Specialty grades in the polymer and urethane chains | Industrial and automotive | — |
Bioscience (Advanced)
| Product line | Description / key capabilities | Target customers | Notes and latest data |
|---|---|---|---|
| Separation and purification media (TOYOPEARL, TSKgel PW) | Resins for antibody and oligonucleotide purification | Biopharma manufacturers, CDMOs | About JPY 16bn Nanyo expansion (+~70%). New Yokkaichi facility (+~20%) for business continuity. Further expansions in spring 2026 and spring 2027. |
| Analytical HPLC columns (TSKgel) | Size-exclusion, ion-exchange and reversed-phase columns | Pharma QC, academic labs | US shipments rose in FY2026; European shipments fell in Q1 FY2027. |
| Downstream bioprocess systems | Chromatography systems (Semba Biosciences, acquired 2021) | Biopharma process development | — |
| HbA1c analyzers and reagents (HLC-723 G-series; GR01) | Automated glycohemoglobin analyzers and reagents | Hospitals, clinical labs | Tosoh Bioscience received FDA 510(k) clearance for the GR01 HbA1c analyzer. European reagent sales rose in Q1 FY2027. |
| Immunoassay systems (AIA series and reagents) | Automated enzyme immunoassay platform | Clinical labs | Domestic in-vitro diagnostic shipments rose in Q1 FY2027 but fell in China in FY2026. |
Advanced Materials (Advanced)
| Product line | Description / key capabilities | Target customers | Notes and latest data |
|---|---|---|---|
| Zirconia powders (Zpex and others) | Yttria-stabilized nano zirconia | Dental labs and blank makers, decorative ceramics, MLCC grinding media, SOFC, solid-state battery R&D | Chinese securities research estimates Tosoh at about 18% of global high-end nano zirconia powder and 40–45% of dental-grade powder (not company-verified). Supply suspensions to some Chinese dental customers were reported in June–July 2026, citing yttria constraints. A zirconia dental-waste recycling scheme was launched in May 2026 with Shofu, Mitsui Chemicals and Orbray using Tosoh's "Zirconia Refine" technology. |
| High-silica zeolite (HSZ) | Catalysts and adsorbents | Automotive SCR/hydrocarbon traps (China, India), petrochemical catalysts (North America) | Shipments rose in FY2026 and Q1 FY2027. |
| Quartz glass | Semiconductor and LCD-grade fused silica (Tosoh Quartz US/UK, Tosoh Quartz Japan, Taiwan) | Etch and deposition equipment makers, fabs | Shipments rose in Q1 FY2027 on AI-driven demand in Japan and East Asia; North America was weaker. |
| Sputtering targets (Tosoh SMD) | High-purity metal targets | Semiconductor fabs | JPY 19.6bn impairment on Tosoh SMD fixed assets in FY2026. US tariffs reported as a cost headwind. Capacity expansion completed December 2025. FY2027 guidance assumes improvement. |
| Electrolytic manganese dioxide (EMD) | Battery-grade cathode material | Primary battery makers | European shipments rose and Asian shipments fell in FY2026. |
Water Treatment Engineering (Advanced)
| Offering | Description | Customers | Notes |
|---|---|---|---|
| Ultrapure water (UPW) plants | Design and build of UPW systems for leading-edge fabs (Organo Corporation, a consolidated listed subsidiary) | Semiconductor and display fabs in Japan, Taiwan, US, China | FY2026 segment sales JPY 186.4bn and operating income JPY 40.4bn, both records. Large Taiwan and US projects continuing. |
| Solutions and recurring services | Equipment-ownership (build-own-operate) water supply, maintenance, consumables | Same | Growing recurring base that JCR cites as a stabilizer. |
| Functional products (Organo) | Water-treatment chemicals and ion-exchange resins | Industrial | — |
Technology bets in development
| Initiative | Status |
|---|---|
| Graded-index plastic optical fiber (GI POF) cables for AI data centers, with Keio University (KPRI) | Joint research since April 2025. KPRI demonstrated 212.5 Gbps over 50 m in May 2026. Tosoh targets mass production from as early as 2029 (Nikkei Asia, 7 May 2026). |
| Hydrocarbon-based polymer electrolyte membranes for water electrolysis (green hydrogen) | Development announced |
| Printed electronics materials, with Yamagata University | Joint paper published March 2026 |
| CO2 capture and conversion to feedstock (Nanyo) | Facility operating since November 2024 |
| Biomass and mass-balance materials (ISCC PLUS at Yokkaichi) | Certified March 2026 |
Financial Detail
Segment Overview
| Segment | Contents |
|---|---|
Petrochemical | Olefins (ethylene, propylene, cumene); polymers (LDPE/HDPE, EVA, chloroprene rubber, functional polymers) |
Chlor-alkali | Chemicals (caustic soda, VCM, PVC, inorganic and organic chemicals); urethanes (MDI, HDI hardeners); cement |
Specialty (Functional Products) | Organic chemicals (ethyleneamines, bromine and derivatives); bioscience (chromatography media and columns, diagnostic reagents and analyzers); advanced materials (zirconia, high-silica zeolite, quartz glass, sputtering targets, EMD) |
Engineering | Water-treatment engineering (Organo group), construction and repair subsidiaries |
Other | Transport and warehousing, inspection and analysis, IT, others |
Revenue by Segment and Segment Margins & Growth (%)
| Metric | FY2024 | FY2025 | FY2026 |
|---|---|---|---|
Petrochemical net sales (JPY Bn) | 183.6 | 204.8 | 169.7 |
Chlor-alkali net sales (JPY Bn) | 359.5 | 373.4 | 346.0 |
Specialty net sales (JPY Bn) | 259.6 | 270.5 | 272.9 |
Engineering net sales (JPY Bn) | 157.0 | 169.3 | 186.4 |
Other net sales (JPY Bn) | 45.9 | 45.4 | 44.9 |
Total net sales (JPY Bn) | 1,005.6 | 1,063.4 | 1,019.9 |
Petrochemical operating income (JPY Bn) | 10.7 | 14.3 | 9.7 |
Chlor-alkali operating income (JPY Bn) | 3.6 | 9.5 | 1.9 |
Specialty operating income (JPY Bn) | 37.9 | 38.6 | 39.9 |
Engineering operating income (JPY Bn) | 24.7 | 33.6 | 40.4 |
Other operating income (JPY Bn) | 2.9 | 2.9 | 3.6 |
Total operating income (JPY Bn) | 79.8 | 98.9 | 95.5 |
Petrochemical operating margin (%) | 5.8 | 7.0 | 5.7 |
Chlor-alkali operating margin (%) | 1.0 | 2.5 | 0.5 |
Specialty operating margin (%) | 14.6 | 14.3 | 14.6 |
Engineering operating margin (%) | 15.7 | 19.8 | 21.7 |
Petrochemical sales YoY (%) | 0 | 11.5 | -17.1 |
Chlor-alkali sales YoY (%) | 0 | 3.9 | -7.4 |
Specialty sales YoY (%) | 0 | 4.2 | 0.9 |
Engineering sales YoY (%) | 0 | 7.8 | 10.1 |
Petrochemical share of sales (%) | 18.3 | 19.3 | 16.6 |
Chlor-alkali share of sales (%) | 35.7 | 35.1 | 33.9 |
Specialty share of sales (%) | 25.8 | 25.4 | 26.8 |
Engineering share of sales (%) | 15.6 | 15.9 | 18.3 |
Revenue by Segment
| Metric | FY2024 | FY2025 | FY2026 |
|---|---|---|---|
Olefins net sales (JPY Bn) | 108.3 | 126.3 | 95.7 |
Polymers net sales (JPY Bn) | 75.3 | 78.5 | 74.0 |
Chemicals net sales (JPY Bn) | 213.5 | 218.6 | 199.0 |
Urethane net sales (JPY Bn) | 134.6 | 144.3 | 135.4 |
Cement net sales (JPY Bn) | 11.4 | 10.6 | 11.6 |
Organic chemicals net sales (JPY Bn) | 72.8 | 74.3 | 74.9 |
Bioscience net sales (JPY Bn) | 60.3 | 68.9 | 69.0 |
Advanced materials net sales (JPY Bn) | 126.5 | 127.2 | 128.9 |
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View Subscription PlansNew Segment Details
| New segment | Contents | Business group |
|---|---|---|
Basic Materials (基礎素材) | Olefins, polymers, chemicals, urethanes, cement | Chain |
Value-Added Materials (付加価値素材) | Functional polymers (chloroprene rubber and others), functional urethanes (HDI hardeners and others), organic chemicals (ethyleneamines, bromine) | Chain |
Bioscience | Separation media, diagnostics | Advanced |
Advanced Materials (高機能材料) | Zirconia, zeolite, quartz glass, sputtering targets, EMD | Advanced |
Water Treatment Engineering | Organo group | Advanced |
Other | Includes construction and repair, previously part of Engineering | — |
Results by Segment
| Metric | FY2026 | FY2027F |
|---|---|---|
Basic Materials net sales (JPY Bn) | 450.1 | 519.3 |
Value-Added Materials net sales (JPY Bn) | 155.0 | 178.3 |
Bioscience net sales (JPY Bn) | 68.2 | 73.9 |
Advanced Materials net sales (JPY Bn) | 115.3 | 143.3 |
Water Treatment Engineering net sales (JPY Bn) | 176.9 | 200.0 |
Other net sales (JPY Bn) | 54.4 | 55.1 |
Basic Materials operating income (JPY Bn) | 0.1 | -2.7 |
Value-Added Materials operating income (JPY Bn) | 25.7 | 27.2 |
Bioscience operating income (JPY Bn) | 19.3 | 21.8 |
Advanced Materials operating income (JPY Bn) | 6.4 | 13.7 |
Water Treatment Engineering operating income (JPY Bn) | 38.1 | 40.5 |
Other operating income (JPY Bn) | 5.9 | 4.5 |
Chain Business operating income (JPY Bn) | 25.8 | 24.5 |
Advanced Business operating income (JPY Bn) | 63.8 | 76.1 |
Income Statement and Margin Analysis (%)
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
Net sales (JPY Bn) | 918.6 | 1,064.4 | 1,005.6 | 1,063.4 | 1,019.9 |
Revenue growth YoY (%) | 25.3 | 15.9 | -5.5 | 5.7 | -4.1 |
Gross profit (JPY Bn) | 272.0 | 219.2 | 226.2 | 259.0 | 261.0 |
SG&A incl. R&D (JPY Bn) | 128.0 | 144.6 | 146.4 | 160.1 | 165.5 |
Operating income (JPY Bn) | 144.0 | 74.6 | 79.8 | 98.9 | 95.5 |
EBITDA, operating income plus D&A (JPY Bn) | 184.7 | 117.7 | 124.4 | 146.4 | 143.6 |
Ordinary income (JPY Bn) | 160.5 | 90.0 | 95.9 | 103.0 | 106.8 |
Pre-tax income (JPY Bn) | 159.7 | 81.6 | 93.7 | 101.4 | 89.3 |
Income taxes (JPY Bn) | 46.3 | 25.3 | 27.0 | 29.9 | 31.9 |
Non-controlling interests (JPY Bn) | 5.4 | 6.0 | 9.4 | 13.5 | 15.8 |
Net income attributable to owners (JPY Bn) | 107.9 | 50.3 | 57.3 | 58.0 | 41.6 |
EPS basic (JPY) | 339.23 | 158.14 | 180.07 | 182.13 | 132.40 |
EPS diluted (JPY) | 339.20 | 158.10 | 180.05 | 182.11 | 132.38 |
Gross margin (%) | 29.6 | 20.6 | 22.5 | 24.4 | 25.6 |
Operating margin (%) | 15.7 | 7.0 | 7.9 | 9.3 | 9.4 |
EBITDA margin (%) | 20.1 | 11.1 | 12.4 | 13.8 | 14.1 |
Net margin (%) | 11.8 | 4.7 | 5.7 | 5.5 | 4.1 |
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View Subscription PlansBalance Sheet and Margin Analysis (%)
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
Total assets (JPY Bn) | 1,087.7 | 1,194.3 | 1,289.9 | 1,327.3 | 1,409.0 |
Cash and equivalents (JPY Bn) | 161.5 | 120.2 | 149.8 | 141.5 | 179.6 |
Receivables incl. contract assets (JPY Bn) | 244.1 | 268.6 | 287.8 | 293.4 | 309.3 |
Inventories (JPY Bn) | 191.7 | 257.1 | 255.3 | 247.8 | 243.5 |
Property, plant and equipment (JPY Bn) | 326.7 | 357.9 | 379.5 | 417.3 | 423.8 |
Goodwill and other intangibles (JPY Bn) | 6.9 | 10.5 | 10.5 | 14.4 | 14.5 |
Short-term debt incl. current portion (JPY Bn) | 63.7 | 149.3 | 145.3 | 133.0 | 144.7 |
Long-term debt (JPY Bn) | 28.2 | 27.4 | 31.1 | 46.1 | 84.2 |
Total debt (JPY Bn) | 91.9 | 176.7 | 176.3 | 179.1 | 228.9 |
Interest-bearing debt incl. leases, company basis (JPY Bn) | 95.9 | 183.0 | 183.1 | 185.8 | 235.1 |
Net debt (JPY Bn) | -69.6 | 56.6 | 26.5 | 37.6 | 49.3 |
Shareholders' equity excl. minorities (JPY Bn) | 709.1 | 738.9 | 794.6 | 827.1 | 831.8 |
Non-controlling interests (JPY Bn) | 50.6 | 55.3 | 64.2 | 75.3 | 87.3 |
Total net assets (JPY Bn) | 759.7 | 794.2 | 858.8 | 902.4 | 919.1 |
Treasury stock (JPY Bn) | -10.0 | -9.9 | -9.7 | -9.6 | -34.4 |
Working capital (JPY Bn) | 372.4 | 371.3 | 396.4 | 420.9 | 443.5 |
Equity ratio, company basis (%) | 65.2 | 61.9 | 61.6 | 62.3 | 59.0 |
Book value per share (JPY) | 2,228 | 2,321 | 2,495 | 2,597 | 2,701 |
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View Subscription PlansCash Flow
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
Operating cash flow (JPY Bn) | 108.6 | -16.2 | 117.0 | 106.2 | 114.6 |
Change in working capital (JPY Bn) | -57.5 | -101.2 | -3.1 | -10.8 | -17.7 |
Capital expenditure, cash basis (JPY Bn) | 44.5 | 79.6 | 58.7 | 79.9 | 69.8 |
Capital expenditure, company accrual basis (JPY Bn) | 48.0 | 79.2 | 61.4 | 81.2 | 72.7 |
Depreciation, company basis (JPY Bn) | 37.6 | 40.6 | 42.7 | 45.7 | 46.2 |
Free cash flow, OCF minus capex (JPY Bn) | 64.1 | -95.9 | 58.3 | 26.3 | 44.7 |
Free cash flow, company definition OCF plus ICF (JPY Bn) | 65.1 | -94.9 | 57.0 | 24.7 | 42.4 |
Dividends paid to owners (JPY Bn) | 19.7 | 28.6 | 25.4 | 30.2 | 31.7 |
Share buybacks (JPY Bn) | 0.0 | 0.0 | 0.0 | 0.0 | 25.0 |
Net debt issued or repaid (JPY Bn) | -36.0 | 82.9 | -3.1 | -2.5 | 52.4 |
Returns & Leverage Ratios (%) and Financial Ratios (x)
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
ROE on average equity (%) | 15.2 | 7.0 | 7.5 | 7.2 | 5.0 |
ROA, net income on average assets (%) | 9.9 | 4.4 | 4.6 | 4.4 | 3.0 |
ROIC, NOPAT at 30% tax on year-end invested capital (%) | 14.6 | 6.1 | 6.3 | 7.4 | 6.9 |
Current ratio (x) | 2.38 | 2.10 | 2.10 | 2.26 | 2.25 |
Debt to equity, total debt / total net assets (x) | 0.12 | 0.22 | 0.21 | 0.20 | 0.25 |
Net debt to EBITDA (x) | -0.38 | 0.48 | 0.21 | 0.26 | 0.34 |
Interest coverage, operating income / interest expense (x) | 135 | 52 | 36 | 36 | 27 |
Asset turnover, sales / average assets (x) | 0.84 | 0.93 | 0.81 | 0.81 | 0.75 |
Days sales outstanding (days) | 97 | 92 | 105 | 101 | 111 |
Days inventory outstanding (days) | 108 | 111 | 120 | 112 | 117 |
Days payables outstanding (days) | 64 | 53 | 57 | 53 | 52 |
Cash conversion cycle (days) | 141 | 150 | 167 | 160 | 175 |
Revenue by Region and Region Margins & Growth (%)
| Metric | FY2024 | FY2025 | FY2026 |
|---|---|---|---|
Japan revenue (JPY Bn) | 503.6 | 521.5 | 506.3 |
China revenue (JPY Bn) | 155.6 | 153.8 | 129.2 |
Other Asia revenue (JPY Bn) | 202.8 | 236.1 | 234.3 |
Other regions revenue (JPY Bn) | 143.6 | 152.1 | 150.1 |
Total revenue (JPY Bn) | 1,005.6 | 1,063.4 | 1,019.9 |
Japan YoY growth (%) | 0 | 3.5 | -2.9 |
China YoY growth (%) | 0 | -1.2 | -16.0 |
Other Asia YoY growth (%) | 0 | 16.4 | -0.8 |
Other regions YoY growth (%) | 0 | 5.9 | -1.3 |
Overseas share of revenue (%) | 49.9 | 51.0 | 50.4 |
China share of revenue (%) | 15.5 | 14.5 | 12.7 |
Capital Markets
| Item | Value |
|---|---|
Last price referenced | JPY 2,595.5 (2 October 2026, intraday) |
52-week / all-time high | JPY 3,086 (16 June 2026) |
52-week low | JPY 2,216.5 (23 March 2026) |
Year-to-date change (to 2 October) | About +10%, derived from MarketScreener's +15.24% YTD at JPY 2,710.5 in August |
1-, 3- and 5-year total shareholder return | See the fiscal-year-end market capitalization trajectory below. |
Historical low | JPY 266 (20 February 2009, unadjusted for the 2017 consolidation) |
Shares outstanding | About 307.9m (excluding treasury) |
Market capitalization | About JPY 843.7bn |
Forward P/E (company EPS forecast JPY 191.63) | About 13.5x (Kabuyoho, 2 October 2026) |
P/B (actual) | 0.95x |
EV/EBITDA FY2027E | About 5.7x (MarketScreener) |
EV/Sales FY2027E | About 0.8x |
Dividend yield (forecast) | 3.85% |
Consensus FY2027 (IFIS, 1 October 2026) | Sales JPY 1,150.1bn; operating income JPY 107.8bn; ordinary income JPY 110.8bn; net income JPY 61.3bn |
Consensus FY2028 / FY2029 (MarketScreener) | Sales JPY 1,137.1bn / 1,186.3bn; net income JPY 65.2bn / 71.2bn; net debt JPY 102.3bn / 106.7bn |
Consensus target price | JPY 3,024, about 16.5% upside (IFIS) |
Consensus rating | 3.29 on Kabuyoho's 5-point scale (neutral to modestly positive) |
Analyst coverage | About 18 analysts (Simply Wall St, June 2026) |
Market Valuation and Valuation Multiples (x)
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
Market capitalization (JPY Bn) | 577.2 | 572.0 | 656.5 | 654.1 | 712.3 |
Enterprise value (JPY Bn) | 507.6 | 628.5 | 683.0 | 691.6 | 761.6 |
P/E (x) | 5.35 | 11.4 | 11.5 | 11.3 | 17.5 |
P/B (x) | 0.81 | 0.77 | 0.83 | 0.79 | 0.86 |
EV/EBITDA (x) | 2.75 | 5.34 | 5.49 | 4.72 | 5.30 |
EV/Sales (x) | 0.55 | 0.59 | 0.68 | 0.65 | 0.75 |
Per-Share Data and Dividends & Capital Returns (JPY)
| Metric | FY2024 | FY2025 | FY2026 | FY2027F |
|---|---|---|---|---|
Dividend per share (JPY) | 85 | 100 | 100 | 100 |
Interim dividend (JPY) | 40 | 50 | 50 | 50 |
Year-end dividend (JPY) | 45 | 50 | 50 | 50 |
Payout ratio (%) | 47.2 | 54.9 | 75.5 | 52.2 |
Credit Ratings
| Agency | Rating | Outlook | Date |
|---|---|---|---|
JCR | AA- (long-term issuer) | Stable | 28 Jul 2025, upgraded from A+ (Positive) |
Moody's / S&P / Fitch | No public rating identified | — | — |
Analyst Conclusions
Management guidance (FY2027)
Management guides net sales of JPY 1,170bn (+14.7%), operating income of JPY 105bn (+9.9%), ordinary income of JPY 107bn and net income of JPY 59bn (+41.8%), with EPS of JPY 191.63 and a JPY 100 dividend.
The H2 assumptions embed naphtha falling to JPY 77,000/kl from JPY 104,250 in H1, with Asian product prices easing:
-
PVC from USD 800–900/t (H1) to USD 700–800/t (H2);
-
MDI from USD 2,050–2,200/t (H1) to USD 1,750–1,900/t (H2).
Q1 delivered 29.7% of full-year operating income.
Consensus
IFIS consensus for FY2027 sits slightly above company guidance: operating income JPY 107.8bn and net income JPY 61.3bn. MarketScreener consensus sees net income compounding to JPY 71.2bn by FY2029. This is well short of the JPY 140bn operating income target for FY2028.
Bull case
-
Advanced Business compounding. Water Treatment Engineering is guided to JPY 200bn of sales and JPY 40.5bn of operating income. Advanced Materials operating income roughly doubles to JPY 13.7bn. Bioscience reaches JPY 21.8bn. Advanced Business operating income would rise from JPY 63.8bn to JPY 76.1bn in a single year, de-risking the group from commodities.
-
Asset value and capital return. At 0.95x book, a 3.85% yield and JPY 25bn of uncommitted buybacks, a modest ROE improvement toward 7% could re-rate the shares toward the JPY 3,024 consensus target.
-
Structural tightening in value-added chains. Middle East disruption and Western capacity closures support CR, HDI and ethyleneamine pricing. Q1 FY2027 Value-Added Materials operating income more than doubled, from JPY 3.9bn to JPY 8.2bn.
Bear case
-
Basic Materials remains loss-making. Guidance is already for JPY -2.7bn. Chinese oversupply persists once Middle East tightness fades, and H2 inventory losses are possible as naphtha falls.
-
Execution credibility. Guidance was cut twice in FY2026; Tosoh SMD was impaired; ROE stands at 5% against a 10% target; the JPY 140bn FY2028 operating income target looks unattainable.
-
Cash conversion and leverage creep. The cash conversion cycle rose to 175 days, Q1 operating cash flow was near zero, interest-bearing debt was up JPY 54bn in one quarter, and the equity ratio is heading to 56%. Minority leakage to Organo shareholders (JPY 15.8bn) also dilutes Engineering upside.
Catalysts and monitorables (next 12 months)
-
H1 FY2027 results (early November 2026): delivery against JPY 50bn of H1 operating income; inventory effects; any decision on the second JPY 25bn buyback tranche.
-
Naphtha price normalization and the Strait of Hormuz situation; Japanese ethylene utilization.
-
Confirmation or denial of the reported dental zirconia supply suspension to China, and of the yttria sourcing strategy.
-
Organo order intake from Taiwan and US leading-edge fabs.
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Tosoh SMD turnaround after the impairment; quartz demand from AI capex.
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Commissioning of HDI capacity (2026) and the Vietnam MDI splitter (spring 2027).
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Any Japanese ethylene-cracker consolidation involving Yokkaichi.
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A medium-term plan progress update or target revision in May 2027.
Concluding analyst verdict
Tosoh enters FY2027 as a company whose earnings identity has quietly flipped. The engine is no longer chlor-alkali; it is the Organo water-engineering franchise, the bioscience consumables business and a recovering advanced-materials portfolio. Together these generated roughly two-thirds of FY2026 operating income and are guided to deliver more than 70% in FY2027.
The commodity chains still matter enormously for volatility. They swung group operating income by more than JPY 60bn between FY2022 and FY2023, and they delivered a near-JPY 15bn windfall in Q1 FY2027 as the Hormuz crisis lifted Asian prices and naphtha-driven inventory gains. But their through-cycle earnings power now looks thin against Chinese overcapacity.
The equity is priced as a commodity chemical stock: below book, about 5.7x EV/EBITDA, about 13.5x forward earnings, with a 3.85% dividend yield. That multiple underweights the quality of the advanced businesses, which on a sum-of-the-parts basis likely justify more than the current enterprise value on their own if valued at specialty multiples. Against that, management credibility was dented by two guidance cuts and a US impairment in FY2026. The JPY 140bn FY2028 operating income target appears out of reach, and cash conversion is deteriorating as engineering and specialty inventories grow.
Our synthesis is a constructive but selective view. The downside appears cushioned by the AA- balance sheet, the JPY 100 dividend floor and recurring advanced-business profits. Upside requires evidence that:
-
Basic Materials can at least break even after the Middle East windfall fades;
-
the second JPY 25bn buyback is executed;
-
Organo's growth flows through to attributable earnings.
Investors should treat the November 2026 H1 release as the key test of H2 assumptions. The most important strategic signal over 12–24 months would be portfolio action on the commodity chain, such as cracker consolidation or capacity rationalization.
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View Subscription PlansExecutive Leadership
Board of Directors
| Name | Title | Born / Age | Tenure and prior roles | Shares (k) |
|---|---|---|---|---|
Mamoru Kuwada (桒田 守) | Representative Director, President & CEO | 28 Sep 1960 / 66 | Joined 1984 (Osaka University, Faculty of Science, macromolecular science). Isocyanate and functional-materials plant management; Yokkaichi Plant GM (2018); director, Chlor-alkali Sector head (2020); Specialty Sector head (2021); President since March 2022. | 61 |
Takafumi Kiuchi (木内 孝文) | Representative Director, Managing Executive Officer; GM, Chain Business HQ; TVP Project Team Leader | 27 May 1964 / 62 | Joined 1988. Urethane Division GM; China General Representative; Chlor-alkali Sector head (2024); Representative Director since 25 June 2026. | 16 |
Akihiro Yoshimizu (吉水 昭広) | Director, Managing Executive Officer; GM, Technology HQ | 25 Mar 1964 / 62 | Joined 1986. Nanyo soda production; Production Technology; Yokkaichi Plant GM; Nanyo Complex GM; Engineering Sector head (2024). | 45 |
Nobukatsu Omichi (大道 信勝) (r) | Director, Managing Executive Officer; GM, Advanced Business HQ | 27 Dec 1965 / 60 | Joined 1988. Advanced Materials Division GM; Specialty Sector head (2022); director since 2025. | 17 |
Hiroshi Horiya (堀谷 宏志) (r) | Director, Senior Executive Officer; GM, Corporate Planning & Group Management | 13 May 1969 / 57 | Joined 1993. Corporate Planning GM (2023); director since 2026. | 3 |
Yoshihiro Honbo (本坊 吉博) | Outside Director (independent) | 19 Mar 1957 / 69 | Former Representative Director and EVP, Mitsui & Co.; former President & COO, VALQUA; outside director of Mitsubishi Pencil. Tosoh director since 2020. | 4.9 |
Mariko Hidaka (日高 真理子) | Outside Director (independent) | 4 May 1961 / 65 | CPA; former Senior Partner, EY ShinNihon; outside director (Audit & Supervisory Committee member) of Kyokuto Boeki. Since 2020. | 5.2 |
Yukimasa Nakano (中野 幸正) (r) | Outside Director (independent) | 7 May 1957 / 69 | Former Director and Senior Managing Executive Officer, Taiheiyo Cement. Since 2023. | 1.7 |
Yukiko Hashidera (橋寺 由紀子) | Outside Director (independent) | 19 Nov 1966 / 59 | President, Phenixey; former President, R-Tech Ueno; outside director of NISSHA. Since 2024. | 2.0 |
Kei Yonezawa (米澤 啓) (r) | Full-time Audit & Supervisory Board Member | 24 May 1962 / 64 | Former Finance GM, Corporate Control GM and Managing Executive Officer. Since 2023. | 19 |
Takashi Matake (眞武 尚史) (r) | Full-time Outside Audit & Supervisory Board Member | 8 Nov 1962 / 63 | Former Managing Executive Officer, Mizuho FG and Mizuho Securities. Since 2025. | 0.4 |
Naoyoshi Yamada (山田 尚義) (r) | Outside Audit & Supervisory Board Member | 21 Jan 1958 / 68 | Former METI official; former Executive Vice President, Hitachi Construction Machinery. Since June 2026. | — |
Yuko Kawai (河合 優子) | Outside Audit & Supervisory Board Member | 14 Jun 1977 / 49 | Partner, Nishimura & Asahi; NY-qualified attorney. Since June 2026. | — |
Board & Management Changes
| Date | Change | Context |
|---|---|---|
1 Mar 2022 | Kuwada succeeds Yamamoto as President | New management for the 2022–2024 plan |
Jun 2025 | Toru Doi leaves the board; Omichi joins; outside auditor Okayama replaced by Matake | Routine rotation |
13 May / 25 Jun 2026 | Toru Adachi (Representative Director, Senior Managing Executive Officer) retires. Kiuchi becomes Representative Director. Kamezaki leaves the board. Horiya joins. Auditors Teramoto and Ozaki are replaced by Yamada and Kawai. | Alignment with the Chain/Advanced organization. Kiuchi, who leads the urethane business and the Vietnam MDI project, is now the most senior executive after the CEO and a plausible successor. |
Major Shareholders
| Rank | Holder | Shares (k) | % |
|---|---|---|---|
| 1 | The Master Trust Bank of Japan (trust account) | 50,015 | 16.24 |
| 2 | Custody Bank of Japan (trust account) | 20,774 | 6.75 |
| 3 | Northern Trust Co. (AVFC) re Silchester International Investors International Value Equity Trust | 8,233 | 2.67 |
| 4 | Mizuho Bank | 7,046 | 2.29 |
| 5 | Nippon Life Insurance | 6,683 | 2.17 |
6–9 | Not fully retrieved. Sumitomo Mitsui Trust Bank appeared in the FY2025 list. | — | — |
| 10 | State Street Bank and Trust Co. 505001 | 5,297 | 1.68 |
Competitive Landscape
Competitors by Segment
| Business | Key competitors |
|---|---|
Chlor-alkali / PVC / caustic | Shin-Etsu Chemical (incl. Shintech), Westlake, Formosa Plastics, Olin, OxyChem, Kaneka, Tokuyama, Chinese carbide-route PVC producers |
MDI / HDI urethanes | Wanhua Chemical, BASF, Covestro, Dow, Huntsman; Asahi Kasei and Vencorex (HDI) |
Olefins / polyolefins | Mitsui Chemicals, Mitsubishi Chemical, Sumitomo Chemical, Asahi Kasei, Idemitsu Kosan; Middle East and Chinese crackers |
Chloroprene rubber | Denka, Arlanxeo, Chinese producers |
Ethyleneamines | Nouryon, Dow, BASF, Huntsman |
Bioscience separations | Cytiva (Danaher), MilliporeSigma (Merck KGaA), Bio-Rad, Sartorius, Repligen, Purolite (Ecolab) |
Diagnostics (HbA1c, immunoassay) | Arkray, Bio-Rad, Sysmex, Abbott, Roche |
Zirconia | Daiichi Kigenso (DKK), Saint-Gobain, Sinocera (国瓷材料) and other Chinese producers |
Zeolites | BASF, Zeolyst, Clariant, Chinese producers |
Quartz glass | Heraeus, Shin-Etsu Quartz, QSIL/Momentive, Ferrotec |
Sputtering targets | JX Advanced Metals, Honeywell, Materion, Linde (Praxair), ULVAC |
Ultrapure water engineering | Kurita Water Industries, Nomura Micro Science, Veolia, Ovivo |
Peer Comparison FY2026
| Company | Net sales (JPY Bn) | YoY sales growth | Operating income (JPY Bn) | Operating margin | R&D / sales |
|---|---|---|---|---|---|
Tosoh | 1,019.9 | -4.1% | 95.5 | 9.4% | 2.3% |
Shin-Etsu Chemical | 2,574.0 | +0.5% | 635.2 | 24.7% | — |
Mitsui Chemicals (IFRS) | 1,668.8 | -7.8% | 73.8 operating (100.0 core) | 4.4% (6.0% core) | — |
Tokuyama | 349.5 | +1.9% | 37.0 | 10.6% | — |
