Komori
Financial results presentation7236T.RAD Co., Ltd.Automobiles and transportation equipment

Summary of Q&A from the Briefing on Second-Quarter Results for the Fiscal Year Ending March 2027

At the second-quarter results briefing, the company explained quarterly profit fluctuations, including lower profit in the domestic segment due to higher material prices and a temporary profit increase from US tariff refunds. It also outlined its heat exchanger business for AI data centers, the use of production sites in China and the Czech Republic, its shareholder return policy and its policy of considering additional share buybacks.

Worth reading
65In focus
Scored from 5 of 6 sections
Direction
Mixed performance
Direction inferred from the company’s description.
Scale
5
¥100 million of profit decline
Wording
Conditional
How definitive the wording is.

Contents of this document

Summary of Q&ASecond quarter of the fiscal year ending March 20279 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Gross Profit Margin
Rate
  • 1Q 14.6%
  • 2Q 14.0%
  • Cumulative 14.3%
Operating profit margin
Rate
  • Japan 1Q 4.0%
  • Japan 2Q 1.6%
  • Japan second-half plan 6.1%
  • US 1Q 1.5%
  • US 2Q 3.9%
  • US second-half plan 0.3%
Results for the three months of the current quarterGross margin for 2Q alone was 14.0%, Japan's operating margin was 1.6% and the US operating margin was 3.9%. US first-half revenue was approximately ¥23.8 billion.
What the company explained in this material
Key points of the Q&AKey questions raised by investors at the briefing and the company's answers
  1. Use the China site for local sales and as a global supply hub
  2. Impact of higher material prices and material cost pass-through on profit
  3. Additional share buybacks and the shareholder return policy
  4. Factors driving fluctuations in operating margins in Japan and the US
  5. Business opportunities for heat exchangers for AI data centers
  6. Expansion of the Czech plant and response to local production in Europe
  7. Increase in orders for multifunction radiators and production capacity constraints
  8. Foreign exchange assumptions and the local production for local consumption strategy
  9. Response to the TOPIX transition measures
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Higher prices for key materials in the domestic segment and a timing gap in reflecting them in selling pricesApproximately ¥500 million of profit decline
  • Standalone material inventory valuation gain in 1QApproximately ¥600 million of profit
  • Increase in the provision related to share-based benefits in Japan in 2QApproximately ¥300 million of expense
  • US 2Q IEEPA tariff refund
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • USD/JPY budget exchange rate¥158.5
  • Japan second-half revenueIncrease of approximately ¥6 billion
  • US second-half revenueApproximately ¥20.5 billion
New initiatives
  • Develop liquid-to-liquid heat exchangers for CDUs used in AI data centers
  • Roll out radiators for air-assisted liquid cooling systems
  • Strengthen the China site's equipment, tooling and parts supply capabilities
  • Expand the Czech plant
  • Expand existing plants in the US and Europe by using adjacent sites
  • Consider establishing a plant in Kyushu
  • Promote the use of Chinese equipment manufacturers
  • Consider additional share purchases as an option in its capital policy
Key KPIsA metric the company considers important as a management benchmark.
  • PERApproximately 80
  • Confirmed orders for multifunction radiators870,000 units
Medium-term management plan targets
Confirmed orders for multifunction radiators increased from 590,000 units to 870,000 units
Financial targets
  • DOE5% or more
  • Payout ratio50% or higher
Payout ratio
50% or higher
Acquisition of treasury shares
The company will flexibly consider additional share purchases. The specific purchase limit, number of shares and period have not been decided.
Contents of this document
ItemDetails
Document typeSummary of Q&A
Fiscal Period CoveredSecond quarter of the fiscal year ending March 2027
Gross Profit MarginRate 1Q 14.6%, 2Q 14.0%, Cumulative 14.3% / Year-on-year change (points) Not disclosed
Operating profit marginRate Japan 1Q 4.0%, Japan 2Q 1.6%, Japan second-half plan 6.1%, US 1Q 1.5%, US 2Q 3.9%, US second-half plan 0.3% / Year-on-year change (points) Not disclosed
Results for the three months of the current quarterGross margin for 2Q alone was 14.0%, Japan's operating margin was 1.6% and the US operating margin was 3.9%. US first-half revenue was approximately ¥23.8 billion.
Breakdown of Factors Affecting the ChangeFactors Higher prices for key materials in the domestic segment and a timing gap in reflecting them in selling prices / Amount Approximately ¥500 million of profit decline, Factors Standalone material inventory valuation gain in 1Q / Amount Approximately ¥600 million of profit, Factors Increase in the provision related to share-based benefits in Japan in 2Q / Amount Approximately ¥300 million of expense, Factors US 2Q IEEPA tariff refund / Amount Not disclosed
Key KPIsIndicator name PER / Value Approximately 80 / Year on year against the same period last year Not disclosed, Indicator name Confirmed orders for multifunction radiators / Value 870,000 units / Year on year against the same period last year Not disclosed
Assumptions Underlying the Business OutlookItem USD/JPY budget exchange rate / Value ¥158.5, Item Japan second-half revenue / Value Increase of approximately ¥6 billion, Item US second-half revenue / Value Approximately ¥20.5 billion
Medium-term management plan targetsConfirmed orders for multifunction radiators increased from 590,000 units to 870,000 units
Financial targetsItem DOE / Value 5% or more / Actual value Not disclosed, Item Payout ratio / Value 50% or higher / Actual value Not disclosed
Payout ratio50% or higher
Acquisition of treasury sharesThe company will flexibly consider additional share purchases. The specific purchase limit, number of shares and period have not been decided.
Key points of the Q&AUse the China site for local sales and as a global supply hub, Impact of higher material prices and material cost pass-through on profit, Additional share buybacks and the shareholder return policy, Factors driving fluctuations in operating margins in Japan and the US, Business opportunities for heat exchangers for AI data centers, Expansion of the Czech plant and response to local production in Europe, Increase in orders for multifunction radiators and production capacity constraints, Foreign exchange assumptions and the local production for local consumption strategy, Response to the TOPIX transition measures
New initiativesDevelop liquid-to-liquid heat exchangers for CDUs used in AI data centers, Roll out radiators for air-assisted liquid cooling systems, Strengthen the China site's equipment, tooling and parts supply capabilities, Expand the Czech plant, Expand existing plants in the US and Europe by using adjacent sites, Consider establishing a plant in Kyushu, Promote the use of Chinese equipment manufacturers, Consider additional share purchases as an option in its capital policy
Items this document does not state (17)
Net SalesOperating profitOrdinary incomeNet incomeSelling, general and administrative expensesFull-year earnings forecastProgress against full-year forecastSelf-assessment against the planSegment resultsUnit price and quantity metricsNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookAnnual DividendCapital expendituresOrders received and order backlogMarket Size / Share

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

Higher prices for key materials, including aluminum, copper and resins, due to the situation in the Middle East, together with a timing gap in passing these increases on to selling prices, resulted in an approximately ¥500 million year-on-year profit decline in the domestic segment in the first half of fiscal 2026. Other quarterly profit fluctuation factors explained included gains on the valuation of material inventories, share-based benefit-related expenses, US IEEPA tariff refunds and higher costs such as container shipping rates.

How to read this page

This is not the documentKomori reads the disclosure the company filed and writes this summary. Figures are as stated by the company and are not audited.
Weight is not a verdictIt measures how much this changes what the company had already told the market. It is not a view on the shares.
Corrections happenIf the company reissues this disclosure, the page is rebuilt from the corrected version and the revision number moves up.
Summary of Q&A from the Briefing on Second-Quarter Results for the Fiscal Year Ending March 2027 | T.RAD Co., Ltd. (7236) timely disclosure | Komori