Initiating Coverage of Toho With JPY 1,600 Fair Value Estimate and Narrow Moat Rating

We are confident Toho will maintain its leadership and dominant share of Japan’s maturing film industry. With limited growth in domestic screening, Toho aims to expand beyond film distribution by investing in entertainment intellectual property, or IP, and monetizing it across physical, digital, and overseas channels. We view this strategy as sound, as IP ownership can build recurring revenue and support growth beyond Japan. Medium- to long-term growth will increasingly depend on IP & Anime, making the segment a key performance indicator.