Can high-performance products, which rebounded sharply on AI-related demand, sustain growth in the first half?

Consolidated first-quarter revenue for the fiscal year ending March 2027 was ¥71,954 million, up 16.0% year on year, while operating profit was ¥11,136 million, up 20.7%. The operating margin also rose 0.6 percentage points, from 14.9% in the prior-year quarter to 15.5%. The company said that demand for high-performance products used in semiconductor manufacturing equipment recovered significantly against a backdrop of accelerating AI-related investment, while demand remained firm across its divisions.

By segment, high-performance products generated revenue of ¥13,889 million and operating profit of ¥3,188 million, standing out with revenue growth of 42.3% and operating profit growth of 78.3%. The operating margin was approximately 23.0%, well above the consolidated average. Plant construction and sales generated revenue of ¥22,215 million and operating profit of ¥3,532 million, while industrial products generated revenue of ¥15,655 million and operating profit of ¥2,996 million. Both segments also posted higher revenue and profit. Accordingly, company-wide first-quarter growth was supported not only by high-performance products but also by stable earnings from plant construction and sales and industrial products.

However, the recovery in high-performance products includes a rebound from a weak prior-year quarter. In the fiscal year ended March 2026, the segment generated revenue of ¥39,094 million, down 12.3% year on year, and operating profit of ¥6,907 million, down 32.5%. It will be necessary to assess, based on first-half cumulative results and the company’s explanations, whether the sharp first-quarter recovery represents a temporary rebound in shipments following the end of customer inventory adjustments or a higher order level driven by increased capital investment for AI applications. This disclosure did not provide figures for the breakdown between volume and pricing, orders received, order backlog or market share.

The full-year forecast is revenue of ¥288,000 million and operating profit of ¥49,000 million, putting first-quarter progress at 25.0% for revenue and 22.7% for operating profit. Dividing the annual plan equally between the two halves gives a simple first-half benchmark of ¥144,000 million in revenue and ¥24,500 million in operating profit, but this is an arithmetic reference that does not reflect seasonality and is not a first-half forecast provided by the company. In FY2027-H1, the key points to confirm are year-on-year changes in high-performance product revenue and operating profit, the segment’s profit margin, and whether the declines in automotive components and building materials are temporary.