小野測器 maintained its 2027 targets under the medium-term management plan “Challenge Stage IV” while returning to profitability in the first half of 2026. Its low valuation, with a PBR of 0.52x, remains in place, but the focus is on the sustainability of its next phase of earnings growth and improvement in ROE.
Comparing the 2027 targets under the medium-term management plan with the company’s 2026 forecasts, the company is indicating that it could achieve its targets ahead of schedule, with forecast revenue of ¥15.0 billion versus a target of ¥14.5 billion and forecast operating profit of ¥1.1 billion versus a target of ¥1.0 billion. However, this represents achievement in line with the plan, rather than an outcome above the initial forecast. Targets have been set for ROE of 6% or higher and for the overseas sales ratio.
In the first half of 2026, revenue improved significantly year on year and the company returned to profitability. Against its first-half forecast, however, revenue fell short by approximately 1.4%, operating profit by approximately 10.7%, and net income by approximately 16.0%, so the results did not directly lead to an upward revision. Profitability on a quarterly basis is a positive factor, but continued attention is needed to determine whether the full-year plan can be achieved. Reported profit was driven mainly by the return to profitability from April to June, making growth in the second half critical.
Potential sources of future earnings growth include sales of custom testing equipment and services, as well as the new revenue stream from model and data sales. Overseas operations also account for a low proportion of sales, and reducing dependence on the domestic market is expected to take time. The new CLC facility is expected to begin operations in 2027, but is not expected to contribute to profit in 2026.
Financially, the company has ample liquidity, with cash and deposits of ¥6.253 billion and borrowings of ¥1.0 billion, although it also has a ¥4.0 billion capital investment plan. Balancing shareholder returns and capital efficiency remains a challenge. PBR is low at 0.52x, but whether the company can maintain ROE at 6% will be the key determinant of its valuation.