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Introduction & Market Context
Taiyo Holdings Co Ltd (TYO:4626), a leading manufacturer of chemicals for printed circuit boards and pharmaceuticals, released its first quarter fiscal year 2026 financial results on August 1, 2025, showing solid growth across its business segments. The company’s stock closed at ¥7,730 on October 3, 2025, representing a 1.94% increase on the day and sitting closer to its 52-week high of ¥8,210 than its low of ¥3,755.
The company operates across three main business segments: Electronics (focusing on chemicals for PCBs), Medical and Pharmaceuticals (ethical pharmaceuticals and dental products), and ICT and Sustainability. The results come amid an expanding market for automotive PCBs driven by increasing vehicle electrification and digitalization, which Taiyo Holdings estimates is growing at a CAGR of 6.3%.
Quarterly Performance Highlights
Taiyo Holdings reported consolidated net sales of ¥33,179 million for Q1 FY2026, representing an 8% year-over-year increase from ¥30,854 million in Q1 FY2025. Operating income grew at an even faster pace, rising 11% to ¥7,055 million, while maintaining a strong operating income margin of 21%.
As shown in the following consolidated financial results summary:
The company’s EBITDA increased by 7% year-over-year to ¥9,176 million, maintaining an EBITDA margin of 28%. Net income showed more modest growth of 1% to ¥4,636 million. It’s worth noting that these results were achieved despite yen appreciation, with the average exchange rate at ¥145.2/USD compared to ¥156.5/USD in the same period last year.
The company has made significant progress toward its first-half targets, having already achieved 53% of its net sales forecast and 60% of its operating income forecast for the first half of FY2026.
Segment Performance Analysis
The Electronics segment, Taiyo Holdings’ largest business, delivered a 4% year-over-year increase in net sales to ¥22,232 million, with operating income growing 2% to ¥6,201 million. This growth was driven primarily by increased sales volume for automotive and smartphone products, with rising demand for memory products. The segment maintained impressive profitability with a 28% operating income margin.
The breakdown of Electronics net sales by product category reveals growth across multiple product lines:
Geographically, China showed the strongest growth in the Electronics segment with a 9% year-over-year increase:
The Medical and Pharmaceuticals segment was the standout performer, with net sales increasing 14% year-over-year to ¥9,419 million. Even more impressive was the 138% surge in operating income to ¥1,378 million, resulting in an operating income margin improvement from 7% to 15%. This growth was driven by increased contract manufacturing volumes from both existing and new customers, as well as higher sales volume due to increased demand amid drug supply shortages.
The detailed breakdown by company within this segment shows particularly strong performance from Taiyo Pharma Tech, the contract development and manufacturing organization (CDMO):
The ICT and Sustainability segment, while smaller, showed robust revenue growth of 34% year-over-year to ¥1,527 million. However, operating income turned negative at -¥32 million compared to a positive ¥69 million in the same period last year.
Revised Forecasts
Based on the strong first-quarter performance, particularly in the Electronics segment, Taiyo Holdings has revised its forecasts upward for both the first half and full year of FY2026.
For the first half, the company now expects:
The full-year forecast has also been revised upward:
The revised forecasts reflect a 4% increase in expected first-half net sales to ¥64,800 million and a 12% increase in operating income to ¥13,200 million. For the full year, net sales are now projected to reach ¥125,700 million (up 2% from the previous forecast) with operating income of ¥24,700 million (up 6%).
Strategic Initiatives
Taiyo Holdings announced several strategic initiatives aimed at long-term growth and improved governance. On June 21, 2025, the company announced a change in President and CEO, with Hitoshi Saito taking the helm. The company also highlighted that independent outside directors now constitute a majority of its Board of Directors, with four out of six board members being independent outsiders.
A key strategic development is the establishment of the 2030 Committee, which aims to address management challenges and formulate a medium-term management plan to realize the company’s long-term vision for 2030. The committee structure is designed to enhance transparency and includes six working groups focusing on different aspects of the business:
In product development news, Taiyo Holdings won the 21st JPCA Award for its DF-type-SR for automotive PKG substrates, highlighting the company’s innovation in materials for the growing automotive electronics market.
The company also received an A rating in the MSCI ESG Ratings, recognizing its sustainability initiatives related to the environment and corporate governance. These initiatives include strengthening management through the Sustainability Promotion Committee, maintaining solar power plants, continuing human capital investment, and enhancing corporate governance.
With strong first-quarter results, upward revisions to forecasts, and strategic initiatives aimed at long-term growth, Taiyo Holdings appears well-positioned to capitalize on growth opportunities in its key markets while strengthening its governance and sustainability practices.
Full presentation:
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