KOA raises full-year outlook on strong AI server demand

Investing.com -- Japanese electronic components maker KOA Corporation raised its full-year forecast after reporting second-quarter operating profit that met market expectations, driven by increased demand for AI server applications in China.

The company posted an operating profit of ¥0.8 billion for the quarter, in line with analyst forecasts of ¥0.6-0.7 billion. Excluding positive effects from yen depreciation, core profit increased by ¥0.1 billion quarter-on-quarter.

Growth in both year-on-year and quarter-on-quarter operating profit came from higher demand in China for communications and power applications, including AI servers, alongside stable demand in automotive and industrial segments.

KOA revised its fiscal year 2026 guidance upward, now projecting sales of ¥69.4 billion, up from the previous ¥67.2 billion forecast. Operating profit expectations were raised to ¥2.98 billion from ¥1.7 billion.

For the second half of the fiscal year, based on an exchange rate of ¥147 to the dollar, the company now expects sales of ¥34.8 billion and operating profit of ¥1.7 billion, representing half-on-half increases of ¥0.1 billion in sales and ¥0.4 billion in operating profit.

The company’s second-quarter order intake remained flat quarter-on-quarter at ¥17.8 billion, while the book-to-bill ratio declined to 1.00 from 1.06 in the first quarter.

KOA also announced a new three-year mid-term plan with targets for fiscal year 2028 including sales of ¥80 billion, operating profit of ¥7.4 billion, return on equity of 6.2%, and return on invested capital of 4.7%. The plan introduces a new minimum annual dividend of ¥30 for the duration of the mid-term plan period.

The company’s stock has already risen 42% since first-quarter results were released, based on the October 23 closing price.

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