Capital Protection Certificate on Chugai Pharmaceutical and Walmart

We see that US rates recently increased giving the opportunity to consider capital protection structured products. The following instrument has only two stocks in the basket with participation coefficient 100% and no cap on the equity price growth in three years.

Companies represent Health Care and Consumer Staples sectors. For Chugai Pharma the 10-year CAGR stands at 17%. Additionally, Chugai stock has delivered positive returns in 92% of rolling three-year periods over the last decade. For Walmart Inc stock, the 10-year CAGR stands at 16%. In 87% of rolling three-year periods over the last decade, WMT has delivered positive returns.

Chugai Pharmaceutical Co., Ltd. [Internal score 68/100] is a leading Japanese biopharmaceutical company headquartered in Tokyo, specializing in the development of innovative medicines in the fields of oncology, rheumatology, and rare diseases. Chugai serves as a key R&D hub for the Roche Group in the Asia-Pacific region. Access to Roche’s global commercial network enables the company to bring Japanese-developed products to the global market. Furthermore, Chugai maintains a strong position as one of the largest innovative pharmaceutical companies in the Japanese domestic market.

In the second quarter of 2026, the company’s revenue grew by 18% year-over-year to $2,1 billion. Net profit for the same period rose by 15% year-over-year to $749 million. Gross margin for the past quarter was above 69%. FCF for the second quarter amounted to $743 mln. Moreover, for the past five years FCF of Chugai Pharmaceuticals has been positive.

Walmart Inc [Internal score 65/100] is the world’s largest retailer. The company has transformed itself from a traditional chain of discount hypermarkets into a global, technology-driven omnichannel ecosystem that successfully combines physical retail, e-commerce, logistics, and advertising. Main divisions of Walmart are Walmart U.S. (68% of the revenue), Walmart International (18% of the revenue) and wholesale stores Sam’s Club (14% of the revenue).

According to the recent financial report for the past quarter of 2026 revenue increased 5.9% y-o-y and amounted to $188B. EBITDA margin for the quarter was around 7% level. Net income exceeds $7.3B vs $5.4B for the same quarter in 2025. Company was able to generate positive FCF, which is 4% of the revenue. Current FCF level is $7.5B in comparison to negative FCF for the 1st quarter of 2026 equal to $1.9B.

The timing is attractive because US bond yields are near multi-decade highs, while September’s weak payrolls have sharply reduced the chance of another Fed hike in October, so today’s favourable terms may not last if yields fall. At the same time, both shares have already corrected substantially: Chugai after the GYM329 setback and some Q2 misses versus expectations, and Walmart after softer US sales and cautious near-term guidance. With Chugai reporting on 27 October and Walmart on 19 November, solid results could give both stocks a clear trigger to recover from those sell-offs.