Valqua (7995) Q2 2027 earnings summary

Executive summary

• 1H FY3/2027 net sales ¥34.423bn, up 27.1% YoY; operating profit ¥6.020bn, up 89.1%; profit attributable to owners ¥5.532bn, up 116.8%.

• Strong tech-market sales drove results above forecasts; FY3/2027 sales and profit forecasts were raised after reviewing demand trends.

Financial highlights

• 1H gross profit ¥15.312bn, up from ¥11.594bn; gross margin 44.5% versus 42.8%, and operating margin 17.5% versus 11.8%.

• Ordinary profit ¥6.076bn versus ¥3.081bn; profit before taxes ¥7.691bn versus ¥3.005bn.

• Net income attributable to owners ¥5.532bn; basic EPS ¥313.88 versus ¥144.93 YoY.

• Comprehensive income ¥6.350bn versus ¥2.021bn YoY.

Outlook and guidance

• FY3/2027 forecasts raised to net sales ¥71.0bn (+21.3% YoY), operating profit ¥12.5bn (+76.0%), ordinary profit ¥12.4bn (+76.8%) and profit attributable to owners ¥10.0bn (+95.0%).

• Revised forecasts are ¥2.0bn higher for sales, ¥1.5bn for operating profit and ¥1.3bn for profit attributable to owners; 2H sales forecast ¥36.6bn.

• FY3/2027 gross margin forecast 44.8%, operating margin 17.6% and ROE 17.4%; capital expenditure ¥6.0bn and depreciation ¥3.1bn.

• Tech-led order growth and revenue from secured orders expected; Machinery and Plant remain solid excluding seasonal factors.

• FY3/2027 dividend forecast ¥200/share: ¥85 interim, ¥85 year-end and ¥30 commemorative; forecast total return ratio 35.3%.