AS ONE Q2 FY2027: Sales and profit climb as full-year outlook is raised

AS ONE posted first-half revenue of ¥57.639 billion, up 12.1% year on year, operating profit of ¥6.890 billion, up 14.5%, and interim net income attributable to owners of the parent of ¥4.726 billion, up 9.2%. Ordinary profit rose 14.2% to ¥7.142 billion. Revenue and operating profit both recorded double-digit growth.

• Research and development demand: Demand remained firm, particularly among universities, research institutions and large companies. Sales through centralized purchasing programs for major companies and e-commerce channels grew.
• Product mix: Sales of AS ONE’s original products increased. Its main Lab and Industry and Medical divisions each posted revenue growth of more than 10% year on year.
• Fluctuations in consumables demand: Inquiries for plastic consumables such as gloves surged in the first quarter amid tensions in the Middle East. Some products saw a pullback in the second quarter.
• Margins and costs: AS ONE passed higher procurement costs on to customers, keeping its gross margin at 30.5%, roughly in line with the previous period. Logistics and labor costs rose, while selling, general and administrative expenses as a share of revenue were 0.3 percentage point below the year-earlier level.

First-half results substantially exceeded the company’s plan, prompting it to raise its full-year forecast. Net income grew more slowly than operating profit, partly because AS ONE recorded a ¥247 million loss on the disposal of fixed assets. The results underscore that, beyond the temporary demand boost tied to Middle East tensions, resilient research and development demand and broader sales channels supported performance.

AS ONE reports laboratory, industry, medical and nursing-care businesses as a single reportable segment. Its business-line revenue breakdown is based on sales to distributors. Lab and Industry was the largest division, while Medical also recorded double-digit growth.

Lab and Industry: Revenue in the Laboratory field increased 12.1% year on year, while Industry grew 13.3%. Demand for research and development at universities, research institutions and major companies contributed to growth, alongside higher sales through centralized purchasing programs and e-commerce. Increased sales of original products also helped.

Medical: Revenue rose 10.8% year on year. AS ONE did not provide a detailed breakdown of the division’s growth drivers, but all three main business lines recorded revenue growth of more than 10%, pointing to expansion that was not dependent on a single area. Other includes revenue from system usage fees.

AS ONE raised its consolidated forecast for FY2027. The company increased its revenue estimate by ¥3.020 billion from its previous forecast and its operating profit estimate by ¥850 million.

The revisions represent increases from the previous forecasts of 2.6% for revenue, 6.6% for operating profit, 6.0% for ordinary profit and 5.9% for net income. AS ONE cited resilient research and development spending, first-half sales of products including plastic consumables exceeding internal plans, and recent sales trends and inquiries for large projects. It expects market conditions to remain firm in the second half.

The company said demand fluctuations for plastic-related products are generally settling down. First-half progress against the full-year forecasts was about 47.7% for revenue, 50.1% for operating profit and 49.7% for net income. AS ONE said the first-half outperformance supports its outlook for meeting the full-year targets.

At the end of the first half, total assets stood at ¥105.963 billion and the equity ratio was 71.6%. The ratio rose 2.2 percentage points from the end of the previous fiscal year, strengthening the company’s financial position.

Operating cash flow was affected by a decline in accounts payable and an increase in inventories, despite higher pretax profit. The investing cash flow inflow was driven mainly by the redemption of investment securities and the withdrawal of time deposits, and should be distinguished from cash generated by ordinary business activities.

AS ONE raised its annual dividend forecast to ¥69 per share, from ¥65 in the previous fiscal year. The interim dividend increased to ¥33 from ¥31 a year earlier, and the company forecasts a year-end dividend of ¥36. AS ONE also acquired 2,500,004 treasury shares through a tender offer for about ¥5.378 billion and canceled 2.6 million shares on Oct. 30. The company cited improving capital efficiency and shareholder returns as its aims.

AS ONE reported higher revenue and profit for the first half, but some demand remains subject to external factors. The company said actual results could differ from its forecasts for a variety of reasons, making it important to assess whether first-half momentum can continue.

• Geopolitical risk: Changes in the situation in the Middle East can affect procurement and inquiries for plastic consumables. If supply concerns ease, sales of products that surged in the first half could weaken as demand normalizes.
• Procurement cost volatility: Changes in raw material and energy prices can push up purchasing costs. AS ONE maintained its gross margin in the first half by passing higher costs on to customers, but delays or difficulties in doing so could weigh on profit.
• Uncertain demand environment: Meeting its full-year plan will depend on continued strength in research and development demand and inquiries for large projects. AS ONE expects a firm market in the second half, while cautioning that forecasts should be considered in light of changing demand.
• Rising expenses: Logistics costs are increasing alongside sales, while mid-career hiring and wage increases are adding to labor expenses. Controlling spending efficiently will be key to converting revenue growth into higher profit.

The key question is whether AS ONE can carry first-half growth into the second half through research-related demand and expanded sales channels, rather than relying on a temporary boost in consumables demand.