Whether high growth in Healthcare, etc., the main driver of the upward revision, will continue in FY2027-H1

FY2027-Q1 consolidated revenue rose 13.2% year on year to ¥412.105 billion, operating profit rose 27.3% to ¥60.116 billion, and profit for the quarter attributable to owners of the parent rose 13.1% to ¥36.452 billion. In response, the full-year forecasts were raised from ¥1.723 trillion to ¥1.732 trillion for revenue, from ¥197.0 billion to ¥202.0 billion for operating profit, and from ¥120.0 billion to ¥123.5 billion for profit attributable to owners of the parent.

Healthcare, etc., accounted for the bulk of the increase. The segment posted Q1 revenue of ¥97.032 billion and operating profit of ¥25.171 billion, up 22.8% and 63.3% year on year, respectively. The company cited strong sales of electronic materials for high-performance substrates, with demand related to semiconductors and data centers driving segment profit. However, the Q1 summary financial results did not disclose sales, volumes, prices, customer mix or capacity utilization for individual electronic materials such as ABF.

Q1 simple progress rates were 23.8% of the full-year revenue forecast and 29.8% of the operating profit forecast, with profit progress exceeding revenue progress by 6.0 percentage points. The simple first-half benchmarks are ¥866.0 billion for revenue and ¥101.0 billion for operating profit, but these cannot be treated as mechanical earnings forecasts because the company is affected by foreign exchange, seasonality and the timing of electronic-material shipments. Even so, whether operating profit continues to outpace revenue progress in the next results will be a useful gauge of the quality of the upward revision.

In FY2027-H1, we will review not only the revenue and profit increases in Healthcare, etc., but also the breakdown of electronic materials, pharmaceutical and food amino acids, and biopharmaceutical services. It has not been disclosed whether strong electronic-material sales reflect higher volumes, product mix or price revisions, or shipments concentrated in Q1. If first-half segment operating profit exceeds ¥101.0 billion while the full-year forecast of ¥202.0 billion is maintained, it will be easier to confirm the reproducibility of the growth drivers. Conversely, if only revenue grows and the profit margin declines, the sustainability of the upward revision will need to be viewed cautiously.