| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥2797.2B | ¥2373.1B | +17.9% |
| Operating Income | ¥170.1B | ¥102.5B | +65.9% |
| Equity-Method Investment Gain/Loss | - | - | - |
| Ordinary Income | ¥180.5B | ¥106.6B | +69.3% |
| Net Income | ¥150.3B | ¥77.1B | +95.0% |
| ROE | 3.3% | 1.8% | - |
In Q1, all segments recorded double-digit revenue growth, resulting in an increase in both revenue and profit, with the profit growth rate substantially exceeding revenue growth due to the effect of operating leverage. Revenue was ¥2797.2B (+17.9% YoY), Operating Income was ¥170.1B (+65.9%), Ordinary Income was ¥180.5B (+69.3%), and consolidated Net Income was ¥150.3B (+95.0%; of which Net Income attributable to owners of the parent was ¥146.6B, +95.2%). The primary driver of revenue growth was that all three major segments—Materials, Electronics, and Life Sciences—secured revenue growth of +17–18% YoY, while the primary driver of profit growth was an improvement in the Operating Income margin due to a decline in the SG&A ratio.
【Revenue】Revenue was ¥2797.2B, up +17.9% YoY. By segment, Materials was the largest at ¥1405.5B (50.2% composition ratio, YoY +18.0%), followed by Life Sciences at ¥904.4B (32.3%, +17.3%) and Electronics at ¥495.9B (17.7%, +18.0%); all three major segments recorded double-digit revenue growth. Other Businesses declined to ¥12.3B (0.4%, -24.5%), but the impact on the overall results was minor.
【Profit and Loss】Operating Income was ¥170.1B (+65.9%), and the Operating Income margin improved to 6.1% from 4.3% in the same period of the previous year, an improvement of +1.8pt. The increase in Cost of Sales (+16.4%) was below the increase in Revenue (+17.9%), lifting the gross margin to 19.7% from approximately 18.7% in the same period of the previous year. Meanwhile, SG&A expenses increased by +11.9% to ¥381.4B, resulting in an SG&A ratio of 13.6%, down -0.8pt from the previous year. As expenses were relatively contained compared with revenue growth, operating leverage became evident. Ordinary Income was ¥180.5B (+69.3%), with Non-Operating Income of ¥19.7B, including ¥10.1B in dividend income, exceeding Non-Operating Expenses of ¥9.3B, including ¥8.6B in interest expense; consequently, Ordinary Income remained above Operating Income. Extraordinary items were an Extraordinary Gain of ¥0.9B and an Extraordinary Loss of ¥0.3B, nearly neutral on a net basis, with limited impact from temporary factors. Consolidated Net Income was ¥150.3B (+95.0%), while Net Income attributable to owners of the parent was ¥146.6B (+95.2%), indicating that the improvement at the operating level was consistently reflected through to the bottom line. Accordingly, the results can be concluded to represent increases in both revenue and profit.
Beginning in Q1, the former five-segment structure was consolidated into three segments—Materials, Electronics, and Life Sciences—and the allocation method for company-wide common expenses was also revised. Materials generated Revenue of ¥1405.5B (50.2% composition ratio) and Operating Income of ¥81.9B (YoY +63.2%), with a profit margin of 5.8%, making it the largest contributor in both scale and profit. Electronics generated Revenue of ¥495.9B and Operating Income of ¥49.3B (YoY +60.4%), with a profit margin of 9.9%, demonstrating the highest profitability among the four segments and serving as the center of product-mix improvement. Life Sciences generated Revenue of ¥904.4B and Operating Income of ¥29.1B (YoY +36.6%), with a profit margin of 3.2%; revenue growth continued, but its profit margin remained below those of the other segments. Other Businesses generated Revenue of ¥12.3B and Operating Income of ¥1.2B (profit margin of 10.1%), representing a small-scale operation. The total segment profit of ¥161.6B, plus company-wide expenses and other items of +¥8.7B and adjustments of -¥0.2B, reconciles to Operating Income of ¥170.1B.
【Profitability】The Operating Income margin was 6.1%, improving +1.8pt from 4.3% in the same period of the previous year. The consolidated Net Income margin (¥150.3B/¥2797.2B) was 5.4%, improving +2.1pt from 3.2% in the previous year. The gross margin was 19.7%, while the SG&A ratio was 13.6% (14.4% in the previous year), indicating that greater cost-structure efficiency contributed to the improvement in profitability.【Cash Flow Quality】ROE of 3.3% represents the level obtained by simply dividing Net Income attributable to owners of the parent for the quarter of ¥146.6B by shareholders’ equity at period-end. Basic EPS increased to ¥35.93 from ¥17.40 in the previous year, an increase of +106.5%, while BPS rose to ¥1,095.74 (¥1,043.19 in the previous year).【Investment Efficiency】Total assets were ¥9421.2B, up +8.1% from ¥8715.3B in the previous year. Total asset turnover remained low, leaving room for improvement in asset efficiency relative to revenue expansion.【Financial Soundness】The Equity Ratio was 47.4%, down -1.4pt from 48.8% in the previous year. This reflected the expansion of total assets accompanied by increases in trade receivables and inventories; nevertheless, the Company continues to maintain a relatively high level of equity capital.
Cash flow from operating activities was -¥212.6B, shifting to an outflow from +¥7.0B in the same period of the previous year. The primary factor was the expansion of working capital accompanying revenue growth: trade receivables absorbed ¥286.4B and inventories absorbed ¥150.3B, resulting in a substantial outflow even after partial offset from the +¥130.6B increase in trade payables. After adjusting for ¥59.3B in income taxes paid, ¥12.9B in interest received, ¥10.1B in interest paid, and other items, the final Operating Cash Flow was determined. Cash flow from investing activities was -¥41.4B, of which capital expenditures accounted for ¥34.4B; this remained below depreciation and amortization of ¥46.2B, indicating a restrained investment burden. Cash flow from financing activities was +¥181.2B, as financing through commercial paper, short-term borrowings, and other sources offset the expansion of working capital. As a result, Free Cash Flow (Operating CF + Investing CF) was -¥254.0B. Internally generated cash during the quarter was insufficient to fully cover investment and dividends, making the progress of inventory normalization and trade-receivables collection from the second half onward key to improving cash flow.
Current-period profit consisted primarily of recurring earnings generated through operating activities, with the impact of temporary factors extremely limited, as reflected in an Extraordinary Gain of ¥0.9B and an Extraordinary Loss of ¥0.3B. The main components of Non-Operating Income of ¥19.7B were dividend income of ¥10.1B and foreign exchange gains of ¥2.4B, while the main component of Non-Operating Expenses of ¥9.3B was interest expense of ¥8.6B; Non-Operating Income and Expenses therefore provided a net positive contribution of +¥10.4B. Meanwhile, Comprehensive Income was ¥276.9B (¥270.8B attributable to owners of the parent), substantially exceeding Net Income of ¥150.3B. The primary factors behind the difference were increases in Other Comprehensive Income from foreign currency translation adjustments of +¥55.4B and valuation difference on available-for-sale securities of +¥78.5B. Because these valuation gains and losses depend on market prices and exchange-rate levels and do not represent recurring earnings power on the income statement, the divergence between Net Income and Comprehensive Income should be viewed separately as the impact of asset valuation changes. In addition, the fact that Operating CF was substantially below Net Income reflects an increase in accruals, including uncollected trade receivables and inventory accumulation; normalization of working capital is therefore a prerequisite for converting current-period profit into cash.
The full-year company plan calls for Revenue of ¥10000.0B (YoY +2.8%), Operating Income of ¥450.0B (YoY +0.6%), Ordinary Income of ¥450.0B (YoY +2.1%), and Net Income attributable to owners of the parent of ¥345.0B. Q1 progress rates were 28.0% for Revenue, 37.8% for Operating Income, 40.1% for Ordinary Income, and 42.5% for Net Income attributable to owners of the parent. All exceeded the simple quarterly benchmark of 25%, indicating that profit is progressing ahead of schedule. However, taking into account the impact of the situation in the Middle East and other factors, the Company plans to update its full-year earnings outlook when it announces its Q2 results after scrutinizing future market trends and demand. There were no revisions to the earnings forecast or dividend forecast for the current quarter.
The full-year dividend forecast is ¥27.00 per share, implying a Payout Ratio of approximately 31.9% against forecast EPS of ¥84.59. As the Company conducted a 1-for-4 stock split effective April 1, 2026, and the previous-period dividend of ¥45 is stated on a pre-split basis, a simple comparison with the current-period forecast of ¥27 does not allow a determination of the effective increase or decrease in dividends. There was no revision to the dividend forecast for the current quarter, and the policy remains unchanged. No share buyback was confirmed during the quarter, and shareholder returns continue to be centered on dividends.
Decline in cash-generation capacity due to working-capital expansion: Operating CF was -¥212.6B, primarily due to increases of ¥286.4B in trade receivables and ¥150.3B in inventories. If receivables collection and inventory optimization do not progress while revenue growth continues, improvement in cash flow may be delayed.
Uncertainty regarding the full-year earnings outlook: The Company has indicated that, taking into account the impact of the situation in the Middle East, it will update its full-year outlook again when announcing its Q2 results. Planned figures may be revised in response to market fluctuations.
Sensitivity to raw-material costs and foreign exchange fluctuations: The gross margin is relatively low at 19.7%, and the business structure is susceptible to the impact of chemical raw-material prices and foreign exchange movements on Cost of Sales and profit margins.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 6.1% | 4.3% (1.7%–6.9%) | +1.8pt |
| Net Income Margin | 5.4% | 3.8% (1.5%–5.1%) | +1.6pt |
The Company’s Operating Income margin and Net Income margin both exceed the industry median, indicating that profitability is relatively high within the peer group.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 17.9% | 3.1% (-0.6%–11.7%) | +14.8pt |
The Revenue growth rate substantially exceeds the industry median, representing a high pace of revenue growth within the industry.
※Source: Compiled by the Company
Combination of revenue growth and operating leverage: While all three major segments recorded double-digit revenue growth, the SG&A ratio declined to 13.6% and the Operating Income margin improved by +1.8pt. Electronics had the highest profit margin at 9.9%, making differences in segment profitability an important point for observing changes in the product mix.
Divergence between cash flow and profit and loss: While increases in both revenue and profit are clear from the profit-and-loss perspective, Operating CF was -¥212.6B, substantially below Net Income of ¥150.3B. The primary factors were increases in trade receivables and inventories, and the fact that profit growth has not translated directly into cash generation is an important point in assessing the quality of the results.
Full-year progress and planned outlook update: Although the progress rates for Operating Income and Net Income both exceed the quarterly benchmark of 25%, the Company itself has stated that it will update its full-year outlook in Q2 in light of the situation in the Middle East and other factors. Whether the plan is revised in the next disclosure will be a key point for future monitoring.
This is a mechanically calculated reference range based solely on publicly disclosed data using a residual income model (Ohlson-type, 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 | ¥1,073 |
| base | ¥1,097 |
| bull | ¥1,097 |
| Calculation Assumption | Value |
|---|---|
| Book Value per Share (BPS) | ¥1,096 |
| Adjusted Forecast EPS | ¥100.7 |
| Cost of Equity r | 9.15% (10-year JGB 2.65% + Equity Risk Premium 6.00% + Size Premium 0.50%) |
| Residual Income Persistence Factor ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 31.9% |
| Forecast EPS Confidence Adjustment | ×1.100 (based on progress ahead of the full-year forecast) |
| implied PBR / PER | 1.00x / 10.9x |
Sensitivity: ¥1,066–¥1,129 at ±1% for the Cost of Equity, and ¥1,097–¥1,097 at ±0.1 for ω.
Notes:
(Calculation model: Residual Income Model / Interest-rate reference month: 2026-06 / This figure does not forecast or guarantee a future share price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific issue. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting with a professional as necessary.
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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.