Daiseki Q2 FY2026 slides: Record sales amid strategic moves toward VISION2030

Introduction & Market Context

Daiseki Co., Ltd. (TYO:9793) presented its financial results for the second quarter ended August 31, 2025, highlighting record-high net sales and gross profit despite domestic industrial production remaining at low levels. The company’s stock closed at 3,350 yen on October 2, 2025, with shares up 1.19% on the day.

The presentation, delivered on October 3, 2025, outlined the company’s progress toward its VISION2030 strategic plan, which includes establishing three new core businesses and increasing domestic market share to 30%. The company also announced a tender offer for shares of its subsidiary, Daiseki Eco. Solution Co., Ltd., as part of its strategic realignment.

Quarterly Performance Highlights

Daiseki reported consolidated net sales of 36,117 million yen for the first half of FY2026, representing a 10.1% year-over-year increase and exceeding the forecast by 1.4%. Gross profit reached 11,924 million yen, up 5.7% year-over-year but falling slightly short of the forecast by 1.4%.

As shown in the following consolidated financial results overview:

Operating profit came in at 7,450 million yen, up 1.6% year-over-year but 5.6% below forecast, while ordinary profit decreased 1.1% year-over-year to 7,629 million yen, missing the forecast by 3.4%. Profit attributable to owners of the parent declined 3.4% to 4,712 million yen, 5.7% below the forecast.

The company’s consolidated net sales have shown consistent growth over recent years, as illustrated in the following chart:

The first half profit metrics demonstrate the company’s continued growth trajectory, though with some pressure on margins:

Strategic Initiatives

A key strategic development is Daiseki’s tender offer for shares of Daiseki Eco. Solution Co., Ltd., scheduled to run from October 3 through November 17, 2025, at 1,850 yen per share (a 60% premium). This move aligns with the company’s VISION2030 plan and is expected to raise the group’s ROE to approximately 13%.

Daiseki also reported progress toward establishing three new core businesses:

1. Expanding handled items, including selective adsorption and collection of ammonia from exhaust gases using MOF absorbent

2. Developing circular economy-related businesses, including recovering ethylene glycol from waste LLC and recycling mineral oils

3. Expanding Daiseki Eco. Solution’s businesses, including plans to enter the waste plastic business in Shizuoka City

The company continues to pursue its goal of obtaining a 30% domestic market share, currently at 25.6%. Daiseki has business relationships with 6,365 of the 24,897 factories in Japan and acquired new business with 349 factories in the past year.

Detailed Financial Analysis

Daiseki’s balance sheet remains strong, with total assets of 114,237 million yen as of August 31, 2025, compared to 113,634 million yen at the end of February 2025. The following chart illustrates the company’s consolidated balance sheet trends:

Capital expenditure remains a priority for Daiseki as it invests in growth opportunities. The following chart shows the company’s capital expenditure and depreciation trends:

At the parent company level, Daiseki achieved record highs in net sales, gross profit, ordinary profit, and net income for the first half:

The parent company’s net sales have shown steady growth across quarters:

Shareholder Returns and Forward-Looking Statements

Daiseki maintains a shareholder-friendly approach, gradually raising its dividend payout ratio with a target of 40%. The company is also considering treasury share purchases of approximately 12 billion yen over the three years up to February 2027.

The company’s return to shareholders policy is outlined below:

For the full fiscal year ending February 2026, Daiseki forecasts:

• Net sales: 70,000 million yen
• Gross profit: 24,000 million yen
• Operating profit: 15,700 million yen
• Ordinary profit: 15,800 million yen
• Profit attributable to owners of parent: 9,900 million yen

The company is maintaining its full-year guidance despite some pressure on profits in the first half, suggesting confidence in stronger performance in the second half of the fiscal year.

Daiseki continues to work toward its ROE targets of 12% by February 2027 and 15% by February 2031, with the tender offer for Daiseki Eco. Solution expected to contribute significantly to this goal. The company also highlighted its commitment to sustainability initiatives, including ammonia recovery from livestock farming and projects aimed at reducing CO2 emissions.

Full presentation:

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