Chugai Earnings: No Surprises in Results or Guidance; Significant Data Readouts Planned in 2025

Narrow-moat Chugai's fourth-quarter earnings were in line with our expectations. Revenue for the quarter was JPY 302 billion, or 10% year-on- year growth, and core operating profit margin was 42.9%. The company issued 2025 guidance of low-single-digit revenue growth and flat operating profit margins, which is within expectations. We maintain our fair value estimate of JPY 5,900 and view shares as slightly expensive. Although the company's key pipeline assets are not yet derisked, this year has significant readouts that, if positive, have the potential to improve our outlook on the company.