Q1 is tracking ahead of the full-year plan, but the FY2027 earnings plan assumes a decline in profit

In the first quarter from April to June 2026, revenue was ¥26.057 billion, up 29.6% year on year, and operating profit was ¥5.728 billion, up 27.0%. Ordinary profit was ¥6.141 billion, up 35.5%, while profit attributable to owners of the parent was ¥4.491 billion, up 27.6%. The operating margin was approximately 22.0%. Although the increases in revenue and profit are clear, operating profit growth was 2.6 percentage points below revenue growth.

Q1 progress against the full-year forecasts was approximately 27.2% for revenue, calculated as ¥26.057 billion ÷ ¥95.840 billion, and approximately 28.2% for operating profit, calculated as ¥5.728 billion ÷ ¥20.330 billion. The mechanical H1 benchmarks, ignoring seasonality, are revenue of ¥47.920 billion and operating profit of ¥10.165 billion. Whether these levels can be exceeded on a cumulative H1 basis will be the first checkpoint. After Q1, achieving the full-year forecasts requires revenue of ¥69.783 billion and operating profit of ¥14.602 billion over the remaining 3 quarters.

Actual FY2026 revenue and operating profit were ¥91.784 billion and ¥21.327 billion, respectively, compared with the FY2027 company forecasts of ¥95.840 billion and ¥20.330 billion. Revenue is planned to increase 4.4% year on year, while operating profit is planned to decline 4.7%. The operating margin is also expected to fall from approximately 23.2% in FY2026 to approximately 21.2% in FY2027. Q1's approximately 22.0% lies between these two levels, and the plan does not assume that Q1's strong revenue growth will flow through directly to full-year profit growth.

The company cited plating chemicals for semiconductor package substrates, mainly for generative AI servers, resilient demand for automotive power devices and ADAS-related products, and the development, proposal and expanded sales of high-value-added products as factors behind the Q1 revenue increase. In particular, revenue from the surface treatment materials business was ¥22.705 billion, up 36.9% year on year, accounting for approximately 87.1% of company-wide revenue. Accordingly, in H1 it will be necessary to confirm whether Q1's demand increase reflects a temporary concentration of shipments and whether the materials business can sustain its high growth together with its profit margin.

The Q1 materials did not disclose standalone quarterly forecasts, order intake, order backlog or cash flow from operating activities. In H1, in addition to cumulative revenue and operating profit, key points will include whether further explanation is provided for the basis of maintaining the full-year operating profit forecast of ¥20.330 billion, changes from Q1's approximately 22.0% operating margin, and the breakdown of the demand increase into volume, pricing and product mix.