On Tuesday, Morgan Stanley (NYSE:MS) maintained a positive stance on Asahi Intecc Co Ltd. (7747:JP) (OTC: AHICF), with a price target increase to JPY4,400 from JPY3,900. The firm continues to endorse an Overweight rating on the stock, indicating confidence in the company's performance.
The adjustment in the price target comes after Asahi Intecc's sales in China and Japan for the first quarter surpassed Morgan Stanley's projections. The firm's gross margin, excluding one-off factors, also exceeded expectations, prompting an upward revision in the full-year gross margin forecast.
Morgan Stanley's analyst highlighted that while the fiscal year June 2025 (F6/25) guidance provided by Asahi Intecc was not initially deemed conservative, current expectations are for the company's earnings to exceed that guidance. This reassessment follows a robust first-quarter performance.
Despite fluctuations in the company's share price, which have been attributed to quarterly volatility in shipping volumes, Morgan Stanley's medium-term equity scenario for Asahi Intecc remains intact. The firm sees a high growth potential for Asahi Intecc when compared to peers such as Terumo and Sysmex. Moreover, the valuation multiple of Asahi Intecc is considered to be in line with these companies, suggesting that there is significant room for upside.
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