| Metric | Current Period | Same Period Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥340.3B | ¥282.3B | +20.6% |
| Operating Income | ¥79.4B | ¥43.0B | +84.8% |
| Ordinary Income | ¥84.3B | ¥43.4B | +94.1% |
| Net Income | ¥60.2B | ¥32.6B | +84.9% |
| ROE | 3.3% | 1.8% | - |
The Company posted higher revenue and earnings in the quarter, with particularly notable growth at the operating income level. Revenue was ¥340.3B (¥282.3B in the previous year, YoY +20.6%), operating income was ¥79.4B (¥43.0B in the previous year, YoY +84.8%), ordinary income was ¥84.3B (¥43.4B in the previous year, YoY +94.1%), and net income attributable to owners of the parent was ¥58.0B (¥31.5B in the previous year, YoY +84.2%). As operating income grew at a pace exceeding the 20.6% revenue growth rate, the operating margin improved by +8.1pt to 23.3% (15.2% in the previous year). The primary factor was the shift toward higher value-added business portfolio composition, driven by revenue expansion in the Electronic Materials Business (+25.9%) and improved profitability (operating income +70.0%); the gross margin also improved to 43.8% (38.0% in the previous year). Progress against the full-year company plan was 24.1% for revenue and 26.5% for operating income, indicating that earnings are progressing at a faster pace than revenue.
【Revenue】Consolidated revenue increased to ¥340.3B (¥282.3B in the previous year, YoY +20.6%), with all segments reporting higher revenue. On a segment-reporting basis (including intersegment transactions), the Electronic Materials Business was the largest growth driver at ¥180.8B (+25.9%), accounting for approximately 45% of the total, followed by the Other Businesses at ¥67.8B (+29.8%), the Insulation Materials Business at ¥44.0B (+24.1%), the Composite Materials Business at ¥40.9B (+14.6%), the Medical Business at ¥38.5B (+7.6%), and the Materials & Chemicals Business at ¥31.4B (+14.0%). All segments secured near-double-digit revenue growth, indicating that demand expanded across the business as a whole rather than in only specific areas.
【Profit and Loss】Operating income increased substantially faster than revenue, reaching ¥79.4B (YoY +84.8%). The gross margin improved to 43.8% (38.0% in the previous year, +5.8pt), while the SG&A ratio declined to 20.5% (22.8% in the previous year, -2.3pt), resulting in the emergence of positive operating leverage. Ordinary income was ¥84.3B (YoY +94.1%); dividend income of ¥3.3B and foreign exchange gains of ¥2.5B contributed to the increase, while extraordinary items (extraordinary income of ¥0.1B and extraordinary losses of ¥0.8B) were immaterial, limiting the impact of temporary factors. After deducting income taxes of ¥23.4B (effective tax rate of 28.0%) and net income attributable to non-controlling interests of ¥2.2B, net income attributable to owners of the parent was ¥58.0B (YoY +84.2%), representing a quarter of higher revenue and earnings.
Segment operating profit and loss (on a segment-reporting basis) were as follows.
The Electronic Materials Business accounted for 88.6% of consolidated operating income of ¥79.4B (83.5% of segment-reporting operating income of ¥84.3B), making it the core source of Company-wide earnings. The Insulation Materials and Materials & Chemicals Businesses are improving from low profitability levels and are contributing to an overall enhancement in portfolio profitability.
【Profitability】ROE was 3.3% (cumulative quarterly basis, non-annualized), the operating margin was 23.3% (+8.1pt from 15.2% in the previous year), and the net profit margin (on a basis attributable to owners of the parent) was 17.0% (+5.9pt from 11.1% in the previous year), with all indicators improving year on year. 【Cash Quality】Days sales outstanding were approximately 102 days, inventory turnover days were approximately 79 days, and days payable outstanding were approximately 49 days. The cash conversion cycle was approximately 133 days (estimated based on 91 days for the current quarter), indicating that growth in working capital during a period of revenue expansion could affect the timing of cash conversion. Property, plant and equipment increased to ¥915.7B (¥875.6B in the previous year, +4.6%), reflecting continued capital investment, while investment securities totaled ¥280.3B, representing 10.0% of total assets. 【Financial Soundness】The equity ratio was 63.2% (+1.9pt from 61.3% in the previous year), while the current ratio was 375.4% and the quick ratio was 334.0%, indicating substantial short-term payment capacity. Total interest-bearing debt was approximately ¥480.0B, nearly matching cash and deposits of ¥454.8B, while interest coverage (EBIT/interest expense) was approximately 40.9x against interest expense of ¥1.9B, indicating strong debt-servicing capacity.
As no cash flow statement has been disclosed, funding trends are assessed based on changes in the balance sheet. Cash and deposits decreased by ¥165.4B (-26.7%) to ¥454.8B from ¥620.1B in the same period of the previous year, while trade receivables increased by 6.4% to ¥382.8B, inventories increased by 3.9% to ¥166.4B, and property, plant and equipment increased by 4.6% to ¥915.7B. Working capital requirements and capital investment associated with business expansion appear to have absorbed cash. Accounts payable increased by 28.5% to ¥103.0B in line with the expansion of procurement and production, absorbing part of short-term funding requirements. Estimated working capital turnover days were approximately 102 days for trade receivables, approximately 79 days for inventories, and approximately 49 days for accounts payable, resulting in a cash conversion cycle of approximately 133 days (all based on 91 days for the current quarter). The increase in working capital during a period of revenue growth may have affected the timing of cash generation. In terms of borrowings, short-term borrowings decreased to ¥3.24B (-26.2% from ¥4.39B in the previous year), while total interest-bearing debt was approximately ¥480.0B, nearly balanced with cash and deposits of ¥454.8B, indicating an overall high level of financial safety.
The core source of earnings was operating income of ¥79.4B generated by the Company’s ordinary operations. The impact of extraordinary items (extraordinary income of ¥0.1B and extraordinary losses of ¥0.8B) was immaterial, indicating that the increase in earnings was almost entirely attributable to recurring factors. Non-operating income and expenses consisted of income of ¥7.5B and expenses of ¥2.6B. Dividend income of ¥3.3B and foreign exchange gains of ¥2.5B accounted for the majority of non-operating income and exceeded interest expense of ¥1.9B, contributing to the increase in ordinary income. After deducting income taxes of ¥23.4B (effective tax rate of 28.0%) from pretax income of ¥83.6B and excluding net income attributable to non-controlling interests of ¥2.2B, net income attributable to owners of the parent was ¥58.0B. Comprehensive income was ¥75.0B, exceeding consolidated net income of ¥60.2B by ¥14.8B. Valuation-related gains, including an increase of +¥13.2B in the valuation difference on other securities and an increase of +¥2.2B in foreign currency translation adjustments, contributed to this result. The divergence from net income was primarily attributable to temporary fluctuations in the market value of other securities.
Progress in Q1 against the full-year company forecasts (revenue of ¥1,410.0B, operating income of ¥300.0B, ordinary income of ¥300.0B, and net income attributable to owners of the parent of ¥200.0B) was 24.1% for revenue, 26.5% for operating income, 28.1% for ordinary income, and 29.0% for net income. Compared with the 25% benchmark for even quarterly progress, revenue was slightly below the benchmark, while the earnings categories were progressing ahead of it. This suggests that profitability improvements centered on the Electronic Materials Business are progressing faster than planned. The Company revised its earnings forecast during the current quarter (revision: yes), while there was no revision to its dividend forecast.
The Company conducted a stock split at a ratio of 5 shares for every 1 common share effective July 1, 2026, and the full-year dividend forecast of ¥28.00 is presented on a post-split basis. On a pre-split basis, the annual dividend forecast is equivalent to ¥140.00. Combined with forecast EPS of ¥109.87 based on the weighted-average number of shares outstanding during the period without reflecting the stock split, the payout ratio is calculated at approximately 127.4%. Compared with the previous fiscal year’s annual dividend of ¥27.50 (on a pre-split basis), this represents a substantial dividend increase plan, suggesting an intention to strengthen shareholder returns in conjunction with the stock split. Although the payout ratio exceeds earnings for a single fiscal year, given the financial foundation of cash and deposits of ¥454.8B and an equity ratio of 63.2%, there appear to be no significant constraints on funding sources for the time being. No disclosure regarding share repurchases has been identified.
Business concentration risk: The Electronic Materials Business accounts for 88.6% (¥70.4B) of consolidated operating income of ¥79.4B, creating a structure in which demand trends in this business have a significant impact on overall performance.
Working capital and cash conversion risk: While revenue increased by +20.6%, trade receivables, inventories, and accounts payable changed by +6.4%, +3.9%, and +28.5%, respectively, resulting in an estimated cash conversion cycle of approximately 133 days (based on 91 days for the current quarter). Cash and deposits decreased by -26.7% year on year, requiring continued monitoring of working capital trends.
Valuation fluctuation risk related to securities and retirement benefits: Investment securities totaled ¥280.3B, representing 10.0% of total assets. The valuation difference on other securities increased by +¥13.2B in the current period and boosted comprehensive income, but could move in the opposite direction depending on market conditions. Adjustments related to retirement benefits made a negative contribution of -¥0.7B.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 23.3% | 8.7% (4.2%–14.2%) | +14.6pt |
| Net Profit Margin | 17.7% | 7.0% (3.2%–10.6%) | +10.7pt |
Both the operating margin and net profit margin exceed the industry median by more than 10pt, placing profitability in the upper tier of the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | 20.6% | 6.2% (-1.1%–14.6%) | +14.4pt |
The revenue growth rate substantially exceeds the industry median, placing the Company among the high-growth group within the industry.
※Source: Compiled by the Company
The operating margin improved by 8.1pt to 23.3% (15.2% in the previous year). The fact that operating leverage is being driven by both gross margin improvement (+5.8pt) and a decline in the SG&A ratio (-2.3pt) suggests a structural improvement in the earnings profile.
Full-year progress is ahead on the earnings side, with operating income at 26.5% and net income at 29.0% versus revenue at 24.1%. The shift toward higher margins in the Electronic Materials Business may be a key factor in achieving the plan.
The pre-split equivalent payout ratio is approximately 127.4%, representing a shareholder return plan exceeding single-year earnings. While this indicates a strengthened commitment to shareholder returns in conjunction with the stock split, the sustainability of this level will depend on earnings growth and cash flow trends.
This is a mechanically calculated reference range based solely on publicly available data using a residual income model (Ohlson-type model with an explicit 5-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear | ¥1,043 |
| base | ¥1,080 |
| bull | ¥1,108 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share (BPS) | ¥1,010 |
| Adjusted Forecast EPS | ¥122.7 |
| Cost of Equity r | 9.77% (10-year Japanese government bond 2.77% + equity risk premium 6.00% + size premium 1.00%) |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 25.5% |
| Forecast EPS Confidence Adjustment | ×1.117 (based on the track record of guidance achievement among comparable companies) |
| Implied PBR / PER |
Sensitivity: ¥1,050–¥1,112 at cost of equity ±1%; ¥1,079–¥1,083 at ω±0.1.
Notes:
(Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-07 / This value does not predict or guarantee the future share price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting with a professional as necessary.
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| 1.07x / 8.8x |
These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.