Electronic Chemicals: Tech Monthly March 2026
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Morgan Stanley maintains an In-Line rating on the Japanese electronic chemicals sector in its March 2026 Tech Monthly report. The firm anticipates significant price increases for copper clad laminates starting in April, alongside continued shipment growth for non-conductive films and thermal interface materials.
The analyst ranks Resonac Holdings first among its preferred stocks, driven by CCL price hikes, HD capacity growth, and GE restructuring. Sumitomo Bakelite is expected to see M&A benefits materialize in the second half of fiscal 2027. Tokyo Ohka Kogyo faces underwhelming photoresist growth, though its backend materials like WHS remain resilient. Additionally, low-dielectric resins and ceramic fillers are gaining investor attention.
The report provides target prices based on specific valuation frameworks for each stock. Resonac Holdings is assigned a target price implying 29.7x P/E based on a SOTP valuation. Tokyo Ohka Kogyo has a target price of ¥7,900, corresponding to 23.2x P/E. Sumitomo Bakelite's target is set at ¥6,600, reflecting 15.5x P/E. Key industry risks include weakened demand for HD media, declining artificial graphite electrode needs, and potential market share losses in photoresists.