Can the Fittings business sustain its high growth on overseas clean energy and semiconductor demand?

The Fittings business recorded first-half revenue of ¥11,710 million in the fiscal year ending December 2026, up 68.2% year on year, and segment profit of ¥2,965 million, up 140.1%. Revenue increased by ¥4,748 million from ¥6,962 million in the same period of the previous year, making a very substantial contribution to company-wide revenue of ¥16,275 million and operating profit of ¥3,564 million. In the third quarter, the first point to verify will be whether the high growth rate established in the first half is continuing as a reflection of actual orders and shipments, rather than merely a comparison effect against the same period of the previous year.

The earnings supplementary materials state that the Growth Markets business’s consolidated revenue ratio rose from 28% in the same period of the previous year to 42%, while overseas clean energy-related revenue was ¥4,228 million and the increase in overseas revenue was ¥4,080 million. By region, the increase comprised ¥1,662 million in the US, ¥902 million in China and ¥449 million in India. This provides a basis for determining whether overseas growth depends on specific regions or is spreading across multiple regions. However, country-level order backlogs, project delivery schedules, and the breakdown between volume and pricing have not been disclosed.

In terms of profitability, the Fittings business’s first-half segment margin was approximately 25.3%. High-margin vacuum equipment projects, the product mix in overseas markets, price revisions and cost reductions are thought to have contributed, but neither profit contributions by factor nor the breakdown between higher unit prices from price revisions and increased volumes has been provided. Accordingly, in the third quarter it will be necessary to assess not only revenue growth but also whether the segment margin can remain around 25% and whether the proportion of high-margin projects has declined.

The company plans to allocate greater resources to low-temperature line products for semiconductors and launch new semiconductor-related products. In the third-quarter results, key points will be whether the Growth Markets ratio remains at or above 42%, whether overseas clean energy-related revenue exceeds the first-half level of ¥4,228 million, and whether the timing of revenue recognition and order backlog for the new products is disclosed. Without such disclosure, it will be difficult to determine whether the first-half surge reflects a sustained market shift or concentration in specific projects.