Evidence from the first half for the full-year operating profit forecast of ¥5,000 million after the upward revision

In the first quarter of the fiscal year ending March 2027, revenue was ¥27,191 million, up 19.4% year on year, while operating profit was ¥385 million, up approximately 141%. The full-year forecasts are revenue of ¥110,000 million and operating profit of ¥5,000 million, implying progress of 24.7% for revenue and 7.7% for operating profit on a simple calculation. Revenue was close to one-quarter of the full-year target, while profit had not reached even 10% of the annual target, making it difficult to say that the increase in revenue translated directly into progress on profit.

Using 50% of the full-year forecast as a simple FY2027-H1 benchmark, the reference points are revenue of ¥55,000 million and operating profit of ¥2,500 million. After deducting first-quarter results, the second quarter alone would need to generate revenue of ¥27,809 million and operating profit of ¥2,115 million. This operating profit level is approximately 5.5 times the first-quarter figure of ¥385 million, so it will be necessary to verify whether the improvement expected by the company from the second quarter onward will appear as an actual increase in profit, rather than merely as a stated direction. The 50% first-half benchmark is a mechanical comparison standard, not a first-half plan presented by the company.

Profit margin is another point to monitor. First-quarter operating profit margin was approximately 1.4%, calculated as ¥385 million divided by revenue of ¥27,191 million, below the 2.8% recorded in the fiscal year ended March 2026. By contrast, the full-year operating profit forecast of ¥5,000 million divided by revenue of ¥110,000 million implies a margin of approximately 4.5%. This assumes that capacity utilization, yield and the product mix of high-value-added products will improve over the remaining period, lifting the margin by approximately 3.1 percentage points. The earnings reference materials cite growth in powertrain and driving-safety products in the mobility sector, high-value-added products and improved yield at the new plant in Thailand as improvement factors, but do not disclose the profit contribution of each factor.

In FY2027-H1, it will be necessary to confirm not only whether first-half operating profit reaches approximately ¥2,500 million, but also whether second-quarter operating profit approaches the mechanical requirement of ¥2,115 million. If first-half profit falls below this benchmark, achieving full-year operating profit of ¥5,000 million will require an even greater concentration of profit in the second half. Conversely, if the first-half margin recovers to the upper 2% range and losses in Southeast Asia also narrow, the feasibility of the upwardly revised operating profit target will improve.