Can Q1's higher revenue and earnings continue through H1, supporting the full-year operating profit target of ¥17,500 million?

In FY2027-Q1, revenue was ¥37,802 million, operating profit was ¥5,681 million, ordinary profit was ¥6,176 million, and net profit attributable to owners of the parent was ¥3,814 million. Year on year, revenue rose 16.0%, operating profit 44.8%, ordinary profit 55.7%, and net profit 50.7%, resulting in higher revenue and earnings, with profit growth outpacing top-line growth.

The full-year forecasts remain unchanged at revenue of ¥160,000 million, operating profit of ¥17,500 million, ordinary profit of ¥18,000 million, and net profit of ¥11,000 million. Progress at the end of Q1 was 23.6% for revenue, 32.5% for operating profit, and 34.7% for net profit. Against the simple 25% benchmark after three months, revenue was broadly in line with plan while profit was ahead. However, the financial summary does not quantify seasonality, raw material prices in the second half, or the timing of sales price pass-through.

The company attributed the earnings growth to increased construction volumes in China, recovering demand in Southeast Asia's heavy-duty anticorrosion market, expanded sales of high-performance and high-value-added products, and appropriate sales price adjustments. At the end of Q1, however, it had not provided a standalone H1 operating profit forecast or indicated how much profit it expects to generate in the second half to achieve the full-year forecast. Assessing a potential full-year upside based solely on Q1 profit progress requires determining how reproducible the earnings are.

In FY2027-H1, we will use revenue approaching ¥80,000 million on a simple calculation and operating profit exceeding the half-year equivalent of ¥8,750 million as benchmarks for assessing whether the full-year forecasts are maintained or revised. In particular, the reliability of the full-year plan will depend on whether the Q1 improvement in operating margin was temporary and inventory-driven or continues into H1 through price revisions and expanded sales of high-value-added products.