Toho Zinc Co., Ltd.

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Toho Zinc's Stock Falls, Up 7.2% in One Month but PBR Near 1x

Toho Zinc's stock price is falling. Although it has risen 7.2% over the past month, it has fallen 17.8% from its late-August high, closing at 1,013 yen on September 4. The PBR is 1.01 times, and the equity ratio is 13.8%, well below the non-ferrous metals industry median of 53.3%. In the first quarter of fiscal year ending March 2027, operating loss was 200 million yen, but net profit attributable to parent company shareholders turned to a profit of 200 million yen. For the full year, the company forecasts sales of 178.5 billion yen and operating profit of 6.7 billion yen, but the first-quarter progress rate is only 17.4%. The increase in final profit in the previous fiscal year was mainly due to the reversal of special losses, and although profitability is close to the industry median, it is highly dependent on market conditions.

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Toho Zinc Surges Over 40% in a Month but Pulls Back; Reality of Return to Profit Lies in Market Prices and Asset Sales

Toho Zinc's stock closed at 1,182 yen on August 28, after rising more than 40% from 813 yen a month earlier, but has since pulled back. For the full fiscal year ending March 2026, the company swung to a net profit of 4.7 billion yen, with sales of 125.5 billion yen (down 1% year on year), operating profit of 6.7 billion yen (up 20%), and ordinary profit of 5.6 billion yen (up 54%). However, the profit increase was mainly due to higher metal prices and asset sales, not an increase in core business volume. ROE is high at 40.4%, but the equity ratio is only 13.8%, about a quarter of the industry median, and the high ROE is largely due to thin equity. The absence of the previous year's extraordinary loss of 7.8 billion yen also contributed to the return to profitability.

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