Nippon Investment Bespoke Research UK Ltd

Nippon Investment Bespoke Research UK

Equity Bottom-Up

Milbon Co., Ltd. manufactures hair care products for beauty salons.  The Company produces chemicals for permanents, hair coloring, shampoos, rinses, and hair growth stimulant products.

<ul>
<li>Milbon Co., Ltd (4919 JP) produced FY26 1H (Dec year-end) gross profit [GP] of ¥17,135mil (+10.5% YoY) and operating profit [OP] of ¥3,347mil (+72.7% YoY) on sales of ¥26,878mil (+8.3% YoY).</li>
<li>While Domestic sales rose moderately [+2.8% YoY to ¥18,993mil], Overseas sales expanded at much faster pace [+24.7% YoY to ¥7,884mil] – a solid increase of +16.7% YoY on an LCY basis.</li>
<li>Given the stronger-than-expected 1H results, Milbon revised up its full-year FY26 guidance from OP of ¥6,300mil (+11.4% YoY) on sales of ¥54,800mil (+3.7% YoY) to OP of ¥6,550mil (+15.9% YoY) on sales of ¥55,600mil (+5.2% YoY).</li>
</ul>


Milbon Co., Ltd (4919 JP) produced FY26 1H (Dec year-end) gross profit [GP] of ¥17,135mil (+10.5% YoY) and operating profit [OP] of ¥3,347mil (+72.7% YoY) on sales of ¥26,878mil (+8.3% YoY).
While Domestic sales rose moderately [+2.8% YoY to ¥18,993mil], Overseas sales expanded at much faster pace [+24.7% YoY to ¥7,884mil] – a solid increase of +16.7% YoY on an LCY basis.
Given the stronger-than-expected 1H results, Milbon revised up its full-year FY26 guidance from OP of ¥6,300mil (+11.4% YoY) on sales of ¥54,800mil (+3.7% YoY) to OP of ¥6,550mil (+15.9% YoY) on sales of ¥55,600mil (+5.2% YoY).


Milbon Co., Ltd (4919 Jp): Research Update

MEC COMPANY LTD. manufactures and markets chemicals and equipment for printed circuit boards.  The Company has sales/manufacturing subsidiaries in Taiwan, Hong Kong, Belgium, and US.

<ul><li>MEC (4971 JP) produced FY26 1H (Dec year-end) OP of ¥4,135mil (+69.4% YoY) on sales of ¥12,594mil (+34.2% YoY), coming in ahead of guidance for OP of ¥4,000mil (+63.9% YoY) on sales of ¥12,250mil (+30.5% YoY).</li><li>Based on the ongoing demand outlook for high-end semiconductor packages for which MEC’s core chemicals are used, the full-year FY26 guidance was revised up from OP of ¥7,600mil (+32.2% YoY) on sales of ¥24,500mil (+17.0% YoY)] to OP of ¥8,300mil (+44.4% YoY) on sales of ¥25,800mil (+23.2% YoY).</li><li>While the CZ-8101 will continue to contribute to FY26 earnings, the growth of the more advanced CZ-8201 and CZ-8401 package substrates is also expected to drive growth.</li></ul>

MEC (4971 JP) produced FY26 1H (Dec year-end) OP of ¥4,135mil (+69.4% YoY) on sales of ¥12,594mil (+34.2% YoY), coming in ahead of guidance for OP of ¥4,000mil (+63.9% YoY) on sales of ¥12,250mil (+30.5% YoY).Based on the ongoing demand outlook for high-end semiconductor packages for which MEC’s core chemicals are used, the full-year FY26 guidance was revised up from OP of ¥7,600mil (+32.2% YoY) on sales of ¥24,500mil (+17.0% YoY)] to OP of ¥8,300mil (+44.4% YoY) on sales of ¥25,800mil (+23.2% YoY).While the CZ-8101 will continue to contribute to FY26 earnings, the growth of the more advanced CZ-8201 and CZ-8401 package substrates is also expected to drive growth.

HIRANO TECSEED Co (Kinzoku) / Equity Bottom-Up

HIRANO TECSEED Co., Ltd. manufactures chemical engineering and textile machinery.  The Company's products include adhesive tape-making machines, magnetic tape laminators, floating dryers, carbon fiber manufacturing machines, and coating machines for textile, paper, and film manufacturers.

<ul><li>Hirano Tecseed (hereinafter HT) reported FY26 Q1 OP of ¥147mil (-82.0% YoY) on sales of ¥6,083mil (-43.3% YoY), generating an OPM of 2.4% (-5.2ppt YoY / +4.6ppt QoQ).</li><li>The weak sales performance was mostly triggered by the dip in sales in the Coating and Laminating Machinery [C&LM] segment reflecting (1) the cautious investment sentiment among the firm’s customers and (2) a deterioration in the sales mix on the back of a decline in EV secondary LiB-related production equipment sales as well as associated installation works.</li><li>At the same time, given low level of production volumes, the gross profit margin [GPM] declined -2.4ppt YoY to 15.7%.</li></ul>

Hirano Tecseed (hereinafter HT) reported FY26 Q1 OP of ¥147mil (-82.0% YoY) on sales of ¥6,083mil (-43.3% YoY), generating an OPM of 2.4% (-5.2ppt YoY / +4.6ppt QoQ).The weak sales performance was mostly triggered by the dip in sales in the Coating and Laminating Machinery [C&LM] segment reflecting (1) the cautious investment sentiment among the firm’s customers and (2) a deterioration in the sales mix on the back of a decline in EV secondary LiB-related production equipment sales as well as associated installation works.At the same time, given low level of production volumes, the gross profit margin [GPM] declined -2.4ppt YoY to 15.7%.

HIRANO TECSEED CO., LTD (6245 JP): RESEARCH UPDATE

Topre Corporation manufactures pressed products for automobile parts. The Company also produces refrigerated trucks and warehouses and parts for copy machines and facsimiles.

<ul><li>Topre announced its FY25 (March year-end) results on 14 May, coming in with OP of ¥28,042mil (-2.1% YoY) on sales of ¥378,815mil (+1.4% YoY), vs its previous revised guidance made on 13 February for OP of ¥24,000mil (-16.2% YoY) on sales of ¥370,000mil (-1.0% YoY).</li><li>Sales were largely in line, but OP overshot the Feb guidance due to: (1) being overly conservative and (2) an improved sales mix thanks to earnings growth in the Temperature-Controlled Logistics Products [TCLP]segment.</li><li>TOPRE guides for FY26 OP of ¥23,000mil (-18.0% YoY) on sales of ¥392,000mil (+3.5% YoY), which is close to the final year target of the ongoing (FY24~FY26) mid-term plan [MTP], which targets OP of ¥23,000mil (3-yr CAGR of +0.9%) on sales of ¥390,000mil (CAGR of +3.2%) by FY26-end.</li></ul>

Topre announced its FY25 (March year-end) results on 14 May, coming in with OP of ¥28,042mil (-2.1% YoY) on sales of ¥378,815mil (+1.4% YoY), vs its previous revised guidance made on 13 February for OP of ¥24,000mil (-16.2% YoY) on sales of ¥370,000mil (-1.0% YoY).Sales were largely in line, but OP overshot the Feb guidance due to: (1) being overly conservative and (2) an improved sales mix thanks to earnings growth in the Temperature-Controlled Logistics Products [TCLP]segment.TOPRE guides for FY26 OP of ¥23,000mil (-18.0% YoY) on sales of ¥392,000mil (+3.5% YoY), which is close to the final year target of the ongoing (FY24~FY26) mid-term plan [MTP], which targets OP of ¥23,000mil (3-yr CAGR of +0.9%) on sales of ¥390,000mil (CAGR of +3.2%) by FY26-end.

TOPORE CORPORATION (5975 JP): RESEARCH UPDATE

DAIDO STEEL CO., LTD. manufactures and markets specialty steel products for automobiles, electronics, and construction use.  The Company also provides engineering services for industrial furnaces and waste disposal facilities, and develops various types of alloy metals.

<ul><li>Daido Steel [DS] (5471 JP) produced FY25 (March year-end) OP [IFRS basis] of ¥42,081mil (+6.8% YoY) on sales of ¥578,129mil (+0.6% YoY).</li><li>This performance overshot the revised full-year guidance [OP of ¥36,000mil (-8.6% YoY) on sales of ¥575,000mil (flat YoY).</li><li>The firm had revised up with the release of its Q3 results, given (1) solid orders, despite higher-than-expected steel scrap prices, (2) the weaker yen and (3) maintaining an optimal GPM amid continued cost reductions.</li></ul>

Daido Steel [DS] (5471 JP) produced FY25 (March year-end) OP [IFRS basis] of ¥42,081mil (+6.8% YoY) on sales of ¥578,129mil (+0.6% YoY).This performance overshot the revised full-year guidance [OP of ¥36,000mil (-8.6% YoY) on sales of ¥575,000mil (flat YoY).The firm had revised up with the release of its Q3 results, given (1) solid orders, despite higher-than-expected steel scrap prices, (2) the weaker yen and (3) maintaining an optimal GPM amid continued cost reductions.

DAIDO STEEL CO., LTD (5471 JP): RESEARCH UPDATE

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