The share price of Kochi-based paper manufacturer Nippon Kodoshi Kogyo surged about 3.7-fold in four and a half months before setting a new all-time high in June. The rise is believed to have been driven by growing demand related to AI servers and the benefits of high-voltage separators. The stock has now corrected by nearly 40%.
Nippon Kodoshi Kogyo's share price fell to a low of ¥2,972 on 4 February 2026 before surging to ¥11,110 on 18 June. The stock consequently reached a new all-time high, then entered another correction phase at the end of June. The rise was attributed to growing demand related to AI servers and the shift toward higher-value-added paper materials, particularly separators. Revaluation progressed following the earnings announcement in late July. The stock fell to ¥5,730 on 30 July and closed at the limit-up level of ¥6,730 after the earnings announcement on 31 July. The closing price at the end of September was ¥6,950.
In its earnings and business outlook, revenue for the first quarter of the fiscal year ending March 2027 reached a record ¥6.053 billion, operating profit was ¥1.777 billion and net profit was ¥1.267 billion. Full-year revenue guidance was raised from ¥21 billion to ¥24 billion, operating profit guidance from ¥4.4 billion to ¥6 billion, and the annual dividend was set at ¥110. Forecast EPS was consequently set at ¥398.2, bringing the PER to approximately 28 times.
Demand is growing for separators used in high-voltage aluminium electrolytic capacitors for AI servers, and Nippon Kodoshi Kogyo's functional materials business is reportedly becoming more profitable. Trends among customers including Nichicon and Nippon Chemi-Con are also supporting production increases, and the view is spreading that paper separators will be key to stabilising power supplies at AI data centres. After a correction phase from July onward, the share price had converged by the end of September at a level reflecting earnings per share and market valuation.