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Omega Investment Co., Ltd.

SUMIDA CORPORATION (Company note – 4Q update)

Coverage
Share price (3/5) ￥1,175 Dividend Yield (12/26 CE) 4.5 %
52weeks high/low ￥1,253/757 ROE(12/25) 6.0 %
Avg Vol (3 month)  319.1 thou shrs Operating margin (12/25) 5.1 %
Market Cap ￥38.90 bn Beta (5Y Monthly) 0.83
Enterprise Value ￥98.82 bn Shares Outstanding 33.109 mn shrs
PER (12/26 CE) 10.6 X Listed market TSE Prime section
PBR (12/25 act) 0.45 X    
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The results of cost structure reforms are clearly visible. In the new fiscal year, the Company aims for further substantial increases in revenue and profit in real terms. Expectations are rising for the Mid-Term Business Plan 2026–2028, which will promote a niche-top strategy.

◇ FY12/2025 full-year results highlights: outperformance versus company forecasts, solid project wins

The FY12/2025 full-year results that SUMIDA CORPORATION (the “Company”) announced on February 6, 2026, came in above the Company’s forecasts and showed increases in both revenue and profit for the full year. Full-year revenue was 147.19 billion yen (up 2.2% YoY), operating profit was 7.44 billion yen (up 64.8% YoY), profit before income taxes was 4.83 billion yen (up 272.9% YoY), profit attributable to owners of the parent was 3.62 billion yen (up 512.4% YoY), basic earnings per share were 109.47 yen, and the annual dividend was 53 yen.

The key points of these results are the following three.

First, even in a business environment with a high degree of uncertainty, full-year revenue increased through both internal (organic) and external (inorganic) growth, and the effects of cost-structure reforms became evident.

On the revenue side, although demand softened in some areas, such as automotive-related products, xEV rapid-charging infrastructure, and solar power generation, the Company’s wide-ranging customer base and its global “Made in Market” supply network underpinned revenue. Furthermore, the Company timely acquired Schmidbauer, which is highly complementary to Sumida in terms of products and supply structure, and achieved full-year revenue growth.

FY2024FY2025YoY (%)
Aoutomotive87,89385,415-2.8
Industrial36,31439,3128.3
CE19,77022,46613.6

Source: Company material

Operating profit, excluding temporary factors, increased by 720 million yen for the full year, reflecting the results of cost structure reforms. The effects of business restructuring in Europe, optimization of production capacity in China, and reductions in manufacturing overhead in China more than offset the negative impact of revenue-decreasing factors, improving profitability. It can be said that the earnings structure has become more muscular. The impact of foreign exchange gains and losses was limited.

Source: Company materials, with notes by our firm.

Looking at operating profit by quarter, the Company has continued to post YoY increases since the second quarter, which is reassuring.

Source: Company materials, with notes by our firm.

Second, the balance sheet and cash flow can be regarded as sound. The net D/E ratio stands at 0.81x, and the cash conversion cycle of 96 days is almost unchanged from the previous fiscal year in both cases. Inventory turnover days are 87 days, two days longer than in the previous fiscal year, which warrants some attention. Free cash flow was positive at 3.57 billion yen despite the large-scale acquisition.

Third, the trend in the amount of acquired projects, which serves as a leading indicator of the Company’s medium- to long-term earnings performance, is favorable. In FY12/2025, the Company acquired new projects totaling 88.0 billion yen. Although this is below the 97.0 billion yen in FY12/2024, it is larger than the 82.0 billion yen in FY12/2023. Looking at the breakdown, the temporary pause in automotive-related projects has been successfully covered by increases in the Industry and Consumer Electronics fields.

Source: Company material

◇ FY12/2026 earnings forecast: outlook for a second consecutive year of higher revenue and profit, with operating profit set to increase steadily in real terms

The FY12/2026 earnings forecast calls for revenue of 156.00 billion yen (up 6.0% YoY), operating profit of 7.50 billion yen (up 0.8% YoY), profit before income taxes of 4.85 billion yen (up 0.4% YoY), profit attributable to owners of the parent of 3.65 billion yen (up 0.9% YoY), basic earnings per share of 110.40 yen, and an annual dividend per share of 53 yen. The Company is thus aiming for a second consecutive year of increases in both revenue and profit.

For revenue, the Company is assuming a recovery in the Industry and automotive markets, with the full-year consolidation contribution from Schmidbauer also contributing positively. On the profit and loss side, while continued positive effects are expected from revenue growth and ongoing cost structure reforms, negative factors such as higher cost of sales due to rising copper prices are also assumed.

As a result, the Company’s forecast for operating profit calls for only a 0.1 billion yen increase, but the FY12/2025 operating profit figure includes 1.0 billion yen in compensation from customers. Excluding this, the underlying increase would be 1.1 billion yen, and this should be regarded as a plan for steady profit growth.

Capital expenditures are planned at 6.8 billion yen (up 9.1% YoY), with an emphasis on profitability.

Source: Company material

Source: Company material

Source: Company material

Source: Company materials, with notes by our firm.

◇ Announcement of VISION to 2035 and the Mid-Term Business Plan 2026–2028

The Company also announced VISION to 2035 and the Mid-Term Business Plan 2026–2028 on the same day.

VISION to 2035

First, in its long-term vision VISION to 2035, the Company states that, based on the recognition that the fields in which it can leverage its strengths in technological capabilities, global development capabilities, and application development capabilities will expand due to responses to global warming, the implementation of AI, mobility innovation, and other factors, it will strengthen its earnings base, pursue growth driven by mega-trends, and promote a niche-top strategy that aims to be number one in multiple niche markets. The slogan is “Top Position in Multiple Niches”.

This strategy is reasonable, as it has a high likelihood of leveraging the Company’s strengths to achieve robust earnings and high capital efficiency. The precedents of many Japanese companies presented in the Ministry of Economy, Trade and Industry’s “Global Niche Top Companies Selection 100” also appear likely to provide useful reference points.

Source: Company material

Source: Company material

Mid-Term Business Plan 2026–2028

The Mid-Term Business Plan 2026–2028 has been presented as the immediate plan for achieving the VISION to 2035.

For the fiscal year ending December 2028, the numerical targets are revenue of 165.0 billion yen, operating profit of 10.0 billion yen, EPS of 174 yen, and ROIC of 6.7%. The key points are as follows: maintaining strong earning power; winning projects in mega-trend areas such as green energy-related fields, power grids, transportation, data centers, healthcare, and robotics; pursuing synergies with Schmidbauer; and promoting new niche-top businesses. The plan is to expand the ROIC–WACC spread and achieve a PBR of over 1x by improving ROIC and keeping WACC under control.

In terms of the numerical targets, they do not exceed those of the previous Mid-Term Business Plan 2024–2026, revenue of 190.0 billion yen, operating profit of 13.5 billion yen, and EPS of 272 yen, but given changes in the business environment, they can be regarded as reasonable targets.

Source: Company material

Source: Company material

Source: Company material

Source: Company material

◇ Stock price trends and points to watch going forward

Since the announcement of the first-quarter FY12/2025 results, the Company’s stock price has been rising consistently and has continued to show a steady upward trend around the 1,200-yen level even after the announcement. From a longer-term perspective, it is also supported by a gentle upward trendline that has been in place since 2012. Background factors likely include the absence of a sense of overheating in the stock price, with a forward PER of 11.0x and a PBR of around 0.65x; steady progress in cost structure reforms; the favorable trend in acquired projects; the fact that the direction and measures of the Mid-Term Business Plan 2026–2028 described above are convincing; and the fact that the FY12/2026 earnings forecast calls for higher revenue and profit.

However, a resistance line originating from the 2017 high of 2,400 yen has also formed, and the stock price is moving within a large symmetrical triangle pattern. Accordingly, the most important point to watch going forward will be whether, when, and how PBR will exceed 1x (1,875 yen) and whether the stock price will break out of this large symmetrical triangle pattern to the upside. As expectations for achieving the final-year numerical targets of the Mid-Term Business Plan 2026–2028 rise, the stock price is expected to continue its upward trajectory.

In the near term, the points to watch are as follows. In particular, the key will be the growth curve the Company draws for the operating profit of 7.5 billion yen, which is the Company’s forecast for FY12/2026, toward the final target of 10.0 billion yen. From this perspective, we intend to monitor the Company’s progress closely, focusing on the following points.

  • Trends in FY12/2026 earnings: whether the Company can further maintain and strengthen its improved earnings structure, continue to move on a stable track on a quarterly basis, and, if possible, exceed the forecast.
  • Trends in acquired projects: whether the Company can steadily translate mega-trends into the number of acquired projects.
  • Maximization of synergies with Schmidbauer
  • Trends in exchange rates and raw material prices

Company profile

Since its founding in 1950, the Company has been a global leader in the design and manufacture of coil-related components and modules for more than 75 years. Leveraging strengths such as advanced technical design capabilities, proprietary manufacturing know-how, extensive application development capabilities, and a global production structure, the Company is engaged in contract manufacturing of custom-made coils for major customers worldwide under a “Made in Market” model. Its business is appropriately diversified across both geography and market segments.

In recent years, the Company has grown its earnings in “green energy-related” fields, but as business uncertainty has increased, it has temporarily experienced a pause in earnings. However, it has moved quickly to improve its cost structure and has also made progress in capturing external growth through the acquisition of Schmidbauer, placing earnings on a recovery track.

In 2026, the Company announced that it would pursue a niche-top strategy over the long term, and, as initiatives for the time being, announced the Mid-Term Business Plan 2024–2026. Its aim, based on its favorable cost structure, is to translate mega-trends, starting with green energy-related fields, into projects across a broad front and to lay the groundwork for product development aimed at becoming a niche-top player. The key point to watch will be how this leads to PBR exceeding 1x through improvements in ROIC and the ROIC spread.

Key financial data

Unit: million yen 2021 2022 2023 2024 2025 2026
CE
Sales 104,920 138,600 147,672 143,978 147,194 156,000
EBIT (Operating Income) 5,669 7,983 8,829 5,633 8,084  
Pretax Income 3,898 6,534 5,856 1,295 4,830 4,850
Net Profit Attributable to Owner of Parent 2,629 5,099 5,064 590 3,618 3,650
Cash & Short-Term Investments 4,237 2,944 3,107 4,286 6,129  
Total assets 117,725 134,846 142,786 147,766 163,656  
Total Debt 54,763 58,546 57,198 57,975 64,023  
Net Debt 50,526 55,602 54,091 53,689 57,894  
Total liabilities 77,622 85,966 85,471 86,849 98,298  
Total Shareholders’ Equity 38,338 46,829 55,056 58,648 62,008  
Net Operating Cash Flow 600 10,566 18,343 14,928 16,457  
Capital Expenditure 6,737 9,174 10,914 9,005 7,347  
Net Investing Cash Flow -6,712 -8,174 -10,702 -8,834 -12,886  
Net Financing Cash Flow 4,751 -4,130 -7,782 -5,268 -1,958  
Free Cash Flow -5,212 2,362 8,539 7,068 10,224  
ROA (%) 2.44 4.04 3.65 0.41 2.32  
ROE (%) 7.37 11.98 9.94 1.04 6.00  
EPS (Yen) 96.7 187.5 167.4 17.9 109.4 110.4
BPS (Yen) 1,409.8 1,722.1 1,687.4 1,774.6 1,875.5  
Dividend per Share (Yen) 28.00 47.00 51.00 53.00 53.00 53.00
Shares Outstanding (Million shares) 27.44 27.44 32.88 33.10 33.11  

Source: Omega Investment from company materials

Share price

Financial data (quarterly basis)

Unit: million yen 2023/12 2024/12 2025/12
　 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
(Income Statement)                  
Sales 36,739 36,313 36,752 36,470 34,442 35,390 35,780 36,906 39,118
Year-on-year -2.4% 2.1% -2.4% -3.3% -6.3% -2.5% -2.6% 1.2% 13.6%
Cost of Goods Sold (COGS) 32,584 32,014 32,263 31,656 30,037 31,007 30,524 31,618 33,121
Gross Income 4,155 4,299 4,489 4,814 4,405 4,383 5,256 5,288 5,997
Gross Income Margin 11.3% 11.8% 12.2% 13.2% 12.8% 12.4% 14.7% 14.3% 15.3%
SG&A Expense 3,006 3,218 3,353 3,091 2,713 3,151 3,059 3,154 3,476
EBIT (Operating Income) 1,149 1,081 1,136 1,723 1,692 1,232 2,197 2,134 2,521
Year-on-year -56.3% -51.1% -56.2% -40.1% 47.3% 14.0% 93.4% 23.9% 49.0%
Operating Income Margin 3.1% 3.0% 3.1% 4.7% 4.9% 3.5% 6.1% 5.8% 6.4%
EBITDA 3,718 3,707 3,956 4,552 4,439 3,809 5,618 4,662 5,876
Pretax Income 387 464 268 951 -389 802 1,372 1,455 1,201
Consolidated Net Income 757 313 114 710 -703 580 1,053 965 984
Minority Interest 53 -35 -23 -46 -52 -5 -29 -45 44
Net Income ATOP 702 348 137 756 -652 585 1,082 1,010 941
Year-on-year -66.0% -71.8% -93.3% -30.2% -192.9% 68.1% 689.8% 33.6% 244.3%
Net Income Margin 1.9% 1.0% 0.4% 2.1% -1.9% 1.7% 3.0% 2.7% 2.4%
                   
(Balance Sheet)                  
Cash & Short-Term Investments 3,107 6,002 5,156 4,750 4,286 6,087 5,429 12,256 6,129
Total assets 142,786 152,361 159,600 143,335 147,766 144,110 142,062 151,308 163,656
Total Debt 57,198 63,785 65,509 58,303 57,975 58,367 57,039 62,193 64,023
Net Debt 54,091 57,783 60,353 53,553 53,689 52,280 51,610 49,937 57,894
Total liabilities 85,471 92,128 95,474 85,403 86,849 85,709 83,098 90,181 98,298
Total Shareholders’ Equity 55,056 57,875 61,653 55,751 58,648 56,205 56,801 58,947 62,008
                   
(Profitability %)                  
ROA 3.65 2.89 1.46 1.33 0.41 0.56 1.17 1.38 2.32
ROE 9.94 7.90 3.74 3.32 1.04 1.45 2.99 3.53 6.00
(Per-share) Unit: JPY                  
EPS 21.5 10.7 4.2 22.9 -19.7 17.7 32.7 30.6 28.5
BPS 1,687.4 1,773.8 1,867.5 1,687.0 1,774.6 1,700.6 1,718.1 1,783.0 1,875.5
Dividend per Share 28.00 0.00 26.00 0.00 27.00 0.00 26.00 0.00 27.00
Shares Outstanding (million shares) 32.88 32.88 33.04 33.10 33.10 33.10 33.11 33.11 33.11

Source: Omega Investment from company materials

Financial data (full-year basis)

Unit: million yen 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
(Income Statement)                    
Sales 81,052 90,153 97,538 94,283 84,417 104,920 138,600 147,672 143,978 147,194
Year-on-year -6.0% 11.2% 8.2% -3.3% -10.5% 24.3% 32.1% 6.5% -2.5% 2.2%
Cost of Goods Sold 66,191 75,019 82,192 81,414 73,319 89,563 119,298 126,561 125,970 126,270
Gross Income 14,861 15,134 15,346 12,869 11,098 15,357 19,302 21,111 18,008 20,924
Gross Income Margin 18.3% 16.8% 15.7% 13.6% 13.1% 14.6% 13.9% 14.3% 12.5% 14.2%
SG&A Expense 8,507 8,837 9,694 9,330 8,798 9,688 11,319 12,282 12,375 12,840
EBIT (Operating Income) 6,354 6,297 5,652 3,539 2,300 5,669 7,983 8,829 5,633 8,084
Year-on-year 50.0% -0.9% -10.2% -37.4% -35.0% 146.5% 40.8% 10.6% -36.2% 43.5%
Operating Income Margin 7.8% 7.0% 5.8% 3.8% 2.7% 5.4% 5.8% 6.0% 3.9% 5.5%
EBITDA 9,251 9,574 9,660 8,848 8,247 12,337 16,103 18,190 16,655 19,965
Pretax Income 5,469 5,697 4,061 2,184 1,470 3,898 6,534 5,856 1,295 4,830
Consolidated Net Income 3,844 4,628 2,531 1,596 839 2,695 5,168 5,102 434 3,582
Minority Interest 178 123 110 13 11 66 68 37 -156 -35
Net Income ATOP 3,666 4,504 2,420 1,582 828 2,629 5,099 5,064 590 3,618
Year-on-year 80.4% 22.9% -46.3% -34.6% -47.7% 217.5% 94.0% -0.7% -88.3% 513.2%
Net Income Margin 4.5% 5.0% 2.5% 1.7% 1.0% 2.5% 3.7% 3.4% 0.4% 2.5%
                     
(Balance Sheet)                    
Cash & Short-Term Investments 3,546 5,375 4,098 3,286 5,237 4,237 2,944 3,107 4,286 6,129
Total assets 69,007 84,366 94,277 96,561 98,063 117,725 134,846 142,786 147,766 163,656
Total Debt 30,611 35,836 40,206 43,646 44,586 54,763 58,546 57,198 57,975 64,023
Net Debt 27,065 30,461 36,108 40,360 39,349 50,526 55,602 54,091 53,689 57,894
Total liabilities 46,982 54,242 58,835 61,963 63,503 77,622 85,966 85,471 86,849 98,298
Total Shareholders’ Equity 20,629 28,570 33,829 33,013 32,990 38,338 46,829 55,056 58,648 62,008
                     
(Cash Flow)                    
Net Operating Cash Flow 8,291 3,658 4,672 8,732 9,107 600 10,566 18,343 14,928 16,457
Capital Expenditure 5,024 9,511 9,610 8,302 6,765 6,737 9,174 10,914 9,005 7,347
Net Investing Cash Flow -4,961 -9,254 -15,153 -8,133 -6,669 -6,712 -8,174 -10,702 -8,834 -12,886
Net Financing Cash Flow -3,016 7,389 9,477 -1,261 -447 4,751 -4,130 -7,782 -5,268 -1,958
Free Cash Flow 3,941 -5,173 -3,769 1,379 3,118 -5,212 2,362 8,539 7,068 10,224
                     
(Profitability )                    
ROA (%) 5.36 5.87 2.71 1.66 0.85 2.44 4.04 3.65 0.41 2.32
ROE (%) 19.27 18.31 7.76 4.74 2.51 7.37 11.98 9.94 1.04 6.00
Net Margin (%) 4.52 5.00 2.48 1.68 0.98 2.51 3.68 3.43 0.41 2.46
Asset Turn 1.18 1.18 1.09 0.99 0.87 0.97 1.10 1.06 0.99 0.95
Assets/Equity 3.60 3.12 2.86 2.86 2.95 3.03 2.97 2.72 2.56 2.58
(Per-share) Unit: JPY                    
EPS 157.9 176.4 90.2 58.3 30.5 96.7 187.5 167.4 17.9 109.4
BPS 888.8 1,069.6 1,250.0 1,216.1 1,213.7 1,409.8 1,722.1 1,687.4 1,774.6 1,875.5
Dividend per Share 34.00 45.00 27.00 24.00 9.00 28.00 47.00 51.00 53.00 53.00
Shares Outstanding (million shares) 23.94 27.44 27.44 27.44 27.44 27.44 27.44 32.88 33.10 33.11

Source: Omega Investment from company materials

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