JPMorgan Raises Nittobo Target Price to JPY 29,000, Bullish on T-glass Thick Core and NER-M9 Opportunities

Overview

JPMorgan released a research report raising Nittobo's (3110.T) earnings forecast and target price, maintaining an Overweight rating. The core logic lies in the continued expansion of the specialty glass market (T-glass, NER-glass), driven by demand from generative AI, data centers, and 5G base stations. Despite intensifying market competition, the company retains technological advantages in high-end segments, with thick-core technology and M9 grade expansion creating new incremental opportunities.

Core views

Demand Side: The report notes strong demand for T-glass in generative AI-related applications. Progress in thick-core (multi-core) technology may further increase usage, although it remains uncertain whether additional core layers will adopt T-glass. For FY2026, T-glass prices are expected to grow 28% YoY, with volume growing 36%. Technical Barriers: Although competitors such as Taiwan Glass and Unitika have entered the market, Nittobo maintains advantages in yield, quality consistency, and stable supply in cutting-edge fields, making its position difficult to erode in the short term. Some market participants worry about intensifying competition and no additional price hikes this year, but the report believes business opportunities are still expanding. New Application Expansion: NER-glass, originally used for M8 grade CCL, began replacing NE-glass at the end of 2025. Recently, due to advances in resin technology, inquiries for NER-glass have emerged for M9 grade, which was previously expected to use Q-glass. Compared to Q-glass, NER-glass offers superior processability and cost advantages. Earnings Forecast: FY2026 operating profit forecast slightly adjusted from JPY 29.6bn to JPY 29.7bn (+43% YoY); FY2027 raised from JPY 37.2bn to JPY 38.3bn (+29% YoY); and FY2028 forecast introduced at JPY 48.3bn (+26% YoY).

Analysis framework

The report employs a Sum-of-the-Parts (SOTP) valuation method. Based on FY2027 forecasts, it assigns a 21x EV/EBITDA multiple to the electronic materials business and an 8x multiple to other businesses, applying a 10% conglomerate discount. The analysis focuses on the growth of specialty glass applications in AI data centers and 5G base stations, while also monitoring the company's second growth pillar (Life Sciences) and capital efficiency. The valuation process incorporates comparable company multiples and accounts for a conglomerate discount to reflect the diversified business structure.

Methodology notes

• Valuation MethodSOTP Valuation

  Sum-of-the-Parts Valuation

  Values different business segments separately and sums them up, then deducts a conglomerate discount. This report assigns a higher multiple (21x) to the high-growth electronic materials business and a lower multiple (8x) to other businesses, reflecting differences in growth prospects across segments.

• Industry/Sector Analysis FrameworkSupply-demand framework

  Supply-Demand Balance Analysis

  The report emphasizes that demand for specialty glass continues to exceed supply. Even with competitor entry, the company can maintain its position due to technological advantages. This framework is used to assess industry cyclicality and the company's pricing power.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Nittobo (3110.T)

  Beneficiary: Specialty glass demand growth and new application expansions directly drive company earnings

  Strengths

  Technological advantages in high-end segments, yield, and supply stability

  Risks

  Intensifying competition, capacity expansion leading to supply-demand imbalance, emergence of substitute materials

Key data

• FY2026 Operating Profit ForecastJPY 29.7bnSlightly adjusted from previous forecast of JPY 29.6bn, +43% YoY
• FY2027 Operating Profit ForecastJPY 38.3bnRaised from previous forecast of JPY 37.2bn, +29% YoY
• FY2026 T-glass Price Growth+28% YoYVolume growth +36% YoY
• Target Price (Dec 2026)JPY 29,000Raised from previous JPY 28,000
• Electronic Materials Business EV/EBITDA Multiple21xOther businesses 8x, Conglomerate discount 10%

Impact & implications

The report believes that Nittobo's technological advantages in specialty glass and the tight supply-demand dynamic will support its earnings growth. The target price hike reflects optimistic expectations for T-glass thick-core applications and NER-glass expansion into M9 grade. If investments in data centers and 5G accelerate, valuations could rise further.

Risks

• Intensifying competitive landscape in specialty glass
• Rapid capacity expansion leading to deteriorating supply-demand balance
• Loss of market share due to emergence of substitute materials
• Slowing investment in data centers and 5G base stations
• Life sciences business impacted by declining hospital visits

What to watch

• Confirmation of actual T-glass application in thick-core (multi-core) structures
• Progress of NER-glass penetration in M9 grade CCL
• Pace of capacity expansion and changes in supply-demand balance
• Speed of investment in data centers and 5G