Can Q1's earnings lead be converted into H1 plan achievement?

In Q1 of FY2027 (year ending March 2027), revenue was ¥12,028 million, operating profit was ¥682 million, ordinary profit was ¥708 million and net income attributable to owners of the parent was ¥441 million. The H1 plan presented by the company calls for revenue of ¥24,000 million, operating profit of ¥1,000 million, ordinary profit of ¥1,000 million and net income of ¥600 million. Progress at the Q1 stage was therefore 50.1%, 68.2%, 70.8% and 73.5%, respectively. The fact that earnings are clearly ahead of revenue in terms of progress will be the first point to check in the next results release.

To achieve the H1 plan, Q2 alone must generate revenue of ¥11,972 million, operating profit of ¥318 million, ordinary profit of ¥292 million and net income of ¥159 million. Based on the difference between the previous year's Q1 and H1 cumulative results, Q2 revenue in the previous year was ¥9,525 million and operating profit was ¥150 million. Accordingly, achieving the current H1 plan requires Q2 revenue to increase by approximately 25.7% year on year and operating profit to increase by approximately 112%. It is necessary to assess separately not only the high earnings progress in Q1 but also whether Q2 revenue can be secured in line with plan.

Q1 progress against the full-year forecast was 26.7% for revenue, 42.6% for operating profit, 44.3% for ordinary profit and 40.1% for net income. To achieve the full-year plan, revenue of ¥32,972 million and operating profit of ¥918 million will be required from Q2 onward. This means an operating margin of approximately 2.8% over the remaining period would be sufficient. However, even after achieving the H1 plan, the second half will still need to generate revenue of ¥21,000 million and operating profit of ¥600 million, so achieving H1 does not automatically ensure full-year achievement.

The company cited rush demand ahead of price revisions for products from its major manufacturers, new products, machinery and equipment sales, recycling-related businesses and strong demand related to semiconductor equipment as factors behind Q1's revenue growth. However, it has not disclosed the contribution of each factor, the breakdown between sales volume and unit prices, or orders received and order backlogs. At the next H1 results release, in addition to checking whether Q2 alone achieves revenue of ¥11,972 million and operating profit of ¥318 million, it will be important to assess whether demand after the price revisions is continuing and how much additional information the company discloses on orders and sales progress by business.