Following the upward revision for the first half, FY2027-H1 enters a phase of demonstrating recovery

FY2027-Q1 revenue was ¥21.114 billion, up 5.5% year on year, while operating profit was ¥2.338 billion, up 8.1%. Against the full-year forecasts as of May of ¥90.0 billion for revenue and ¥8.5 billion for operating profit, progress was approximately 23.5% for revenue and 27.5% for operating profit, with operating profit progress ahead of revenue. For the first quarter, results were not materially behind the full-year plan.

Subsequently, in the forecast revision dated 28 September, the full-year forecasts were raised to ¥93.0 billion for revenue, ¥12.0 billion for operating profit, ¥12.3 billion for ordinary profit and ¥8.2 billion for net income attributable to owners of the parent. The ¥3.5 billion increase in the operating profit forecast represents an approximately 41% increase from the previous forecast of ¥8.5 billion. Information reporting the revision also put the FY2027-H1 forecasts at ¥5.5 billion for operating profit and ¥5.7 billion for ordinary profit. The focus of the next earnings release will therefore be how much profit was accumulated in Q2 alone, compared with the ¥2.338 billion recorded in Q1.

The upward revision was driven by strong domestic and overseas semiconductor-related projects in the piping systems business. In Q1, demand to secure domestic inventory, a recovery in memory demand in South Korea and investment demand related to the US electronics industry boosted sales. The company also cited instability in raw-material supplies, higher procurement costs and signs of a pause in Chinese demand. It will therefore be necessary to determine whether the revised operating profit forecast of ¥12.0 billion can be reproduced through more than volume growth, including price pass-through and manufacturing efficiency improvements.

The Q1 supplementary materials show the full-year forecast figures, but do not disclose the revenue and operating profit levels required over the remaining 9 months or the amount of risk incorporated into the forecasts. They also do not disclose order intake or the order backlog. In FY2027-H1, we will track the progress of semiconductor-related demand, Q2 standalone margins and any further revision to the full-year forecasts, as well as how specifically the company explains the timing of project orders and deliveries.