TOWA (6315) Q1 2025 earnings summary

Executive summary

• Orders and net sales for compression equipment and molds remained high, especially for generative AI and communication devices, driving strong YoY growth in all profit stages.

• Net sales rose 39.3% YoY to ¥13.25 billion, driven by strong semiconductor demand in China and recovering capital expenditure in Taiwan.

• Operating profit increased 140.3% YoY to ¥2.21 billion, with ordinary profit up 112.5% to ¥2.42 billion, and net profit attributable to owners of parent up 115.9% to ¥1.69 billion.

• Orders remained robust, totaling ¥13.08 billion, with compression equipment and molds orders at ¥5.57 billion.

• Improved customer utilization rates led to higher net sales in Total Solution Service (TSS), contributing to substantial YoY profit improvement.

Financial highlights

• Gross profit for the quarter was ¥4.77 billion, up from ¥3.12 billion YoY.

• Basic earnings per share increased to ¥67.62 from ¥31.29 YoY.

• Equity ratio improved to 68.6% from 66.5% at the previous fiscal year-end.

• Comprehensive income for the quarter was ¥2.24 billion, down 10.1% YoY.

• Operating margin for Q1 FY2024 at 16.7%, up from 9.7% in Q1 FY2023.

Outlook and guidance

• FY2024 full-year forecast unchanged: net sales ¥60.0 billion (+18.9% YoY), operating profit ¥12.6 billion (+45.5% YoY), net profit ¥8.83 billion (+37.0% YoY), EPS ¥353.22.

• Operating margin expected to improve to 21.0% for FY2024.

• No changes to previously announced guidance for the second quarter or full year.

• Generative AI-related and China investments expected to drive market growth from Q2 onward.

• Capital expenditure recovery and improved OSAT utilization rates anticipated to boost sales in the second half.