Shionogi (4507)

Equity Research 3 August 2026 | 9:19PM JST

Shionogi (4507.T) Earnings Review: 1Q Profit beat mainly on lower costs; Buy

4507.T 12m Price Target: ¥3,500 Price: ¥2,899 Upside: 20.7% BUY Akinori Ueda, Ph.D. Shionogi announced 1Q3/27 results at 15:30 JST on August 3 and | Goldman Sachs Japan Co., Ltd. held a results briefing at 17:00. 1Q operating profits of ¥69.9 bn Tomo Taniguchi beat GSe of ¥41.0 bn (see Exhibit 1 for details). The main factors | Goldman Sachs Japan Co., Ltd. behind the profit beat were the impact of PPA (purchase price allocation) not being reflected in the equity-method investment income from ViiV in 1Q, and R&D expenses finishing below our assumption. With sales of ¥163.3 bn trending broadly in line with our estimate of ¥163.8 bn, we view the results as solid on an Key Data _____________________________________ Market cap: ¥2.5tr / $15.5bn underlying basis. At the results briefing, the company also Enterprise value: ¥2.3tr / $14.4bn 3m ADTV: ¥8.3bn / $52.0mn highlighted Shionogi/ViiV’s strong positioning and favorable Japan long-term outlook in the HIV market (see our linked report for our Japan Pharmaceuticals and Medical Equipment M&A Rank: 3 views). Leases incl. in net debt & EV?: Yes

GS Forecast __________________________________ We maintain our Buy rating. Our focus ahead is on potential for 3/26 3/27E 3/28E 3/29E

improvement in the medium- to long-term profit outlook via (1) Revenue (¥ bn) Op. profit (¥ bn) New market penetration of long-acting (LA) formulations and Op. profit (¥ bn) Old Op. profit CoE (¥ bn) -- 220.0 -- -- development progress for next-generation products in the HIV EPS (¥) New franchise, (2) an improved sales outlook for edaravone and EPS (¥) Old P/E (X) expansion of the rare disease business leveraging that platform, and P/B (X) 1.4 1.3 1.2 1.2

(3) the realization of synergies with Japan Tobacco Group’s (2914.T, CROCI (%)

JT) pharmaceutical business, which was acquired last year. 6/26 9/26E 12/26E 3/27E EPS (¥)

GS Factor Profile ______________________________ Results overview and GSe revisions Growth

n 1Q earnings: Sales of ¥163.3 bn were mostly in line with our Financial Returns

¥163.8 bn estimate, while operating profits of ¥69.9 bn beat Multiple GSe of ¥41.0 bn. This owed mainly to the following factors. (1) The impact of PPA (amortization of intangible assets) was not Integrated

reflected in the equity-method investment income from ViiV in Percentile 20th 40th 60th 80th 100th

1Q. The company explained it expects to reflect this from 2Q 4507.T relative to Japan Coverage onward. (2) R&D expenses finished below our estimate. 4507.T relative to Japan Pharmaceuticals and Medical Equipment

n FY3/27 guidance: Shionogi said 1Q progress was in line with its Source: Company data, Goldman Sachs Research estimates. See disclosures for details. expectations (excluding the PPA impact on equity-method

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs Shionogi (4507.T)

Shionogi (4507.T) Income Statement (¥ bn) ___________________________________ BUY Rating since Jun 15, 2026 3/26 3/27E 3/28E 3/29E Total revenue Cost of goods sold ( ) SG&A ( ) Ratios & Valuation __________________________________________ R&D ( /26 3/27E 3/28E 3/29E Other operating inc./(exp.) -- -- -- -- P/E (X) EBITDA P/B (X) 1.4 1.3 1.2 1.2 Depreciation & amortization ( ) FCF yield (%) EBIT EV/EBITDAR (X) Net interest inc./(exp.) EV/EBITDA (excl. leases) (X) Income/(loss) from associates -- -- -- -- CROCI (%) Pre-tax profit ROE (%) Provision for taxes ( ) Net debt/equity (%) ( ) Minority interest (0.8) (0.7) (0.8) (0.7) Net debt/equity (excl. leases) (%) ( ) Preferred dividends -- -- -- -- Interest cover (X) Net inc. (pre-exceptionals) Days…