Strong start in Q1, but Q2 earning power will be the focus for FY2027-H1

Revenue for the first quarter of the fiscal year ending March 2027 was ¥16,170 million, operating profit was ¥1,306 million, ordinary profit was ¥1,737 million, and net income attributable to owners of the parent was ¥1,225 million. Year on year, these increased 18.2%, 36.4%, 59.1% and 63.6%, respectively. The operating margin also improved by approximately 1.1 percentage points, from approximately 7.0% in the year-earlier period to approximately 8.1%. The fact that profit growth exceeded revenue growth differs from the revenue growth and profit decline seen in the fiscal year ended March 2026.

The company has set its cumulative first-half forecasts at ¥29,500 million in revenue, ¥1,800 million in operating profit, ¥2,100 million in ordinary profit and ¥1,400 million in net income. Simply subtracting the first-quarter results means that Q2 alone would need to generate ¥13,330 million in revenue, ¥494 million in operating profit, ¥363 million in ordinary profit and ¥175 million in net income. Since Q1 generated approximately 72.6% of the first-half operating profit forecast and approximately 87.5% of the net income forecast, the first-half forecasts are within reach, but this assumes that Q2 profit will slow sharply from the Q1 level.

The full-year forecasts are ¥59,500 million in revenue, ¥2,500 million in operating profit, ¥2,900 million in ordinary profit and ¥1,800 million in net income. Compared with the previous fiscal year, the company expects revenue to increase 3.7%, operating profit 14.9% and ordinary profit 8.5%. As of Q1, progress against the full-year forecasts was approximately 27.2% for revenue and 52.2% for operating profit, although this also reflects the concentration of profit in the first half of the year. In addition to the reliability of the full-year forecasts, the key points to monitor are whether operating profit of ¥494 million can be secured in Q2 and whether a further ¥1,200 million in operating profit can be generated in the second half.

The company cites conductive polymer agents for information infrastructure applications such as AI servers and automotive-related applications, as well as surfactants and piezoelectric materials, including those supplied by overseas consolidated subsidiaries, as drivers of revenue growth. However, the Q1 materials do not disclose product-level sales volumes, the amount of profit growth attributable to each factor, orders received or order backlogs, or regional revenue. At the next first-half results announcement, it will be necessary to determine whether growth came from higher sales volumes or from price, product mix and foreign-exchange effects, and whether Q2 standalone profit of ¥494 million represents a temporary rebound.