Maruichi Steel Tube Ltd. (Securities Code: 5463) kicked off the first quarter of the fiscal year ending March 31, 2027 (Q1 FY2026), with strong growth in both revenue and profit compared to the same period last year. The results were powerfully driven by the expansion of spreads (price margins) in the US market due to a recovery in market conditions, as well as a rebound in demand for stainless steel tubes used in semiconductor manufacturing equipment.

This report extracts 10 key topics from the disclosed earnings presentation materials to provide a comprehensive, multi-faceted analysis of the company's current performance, segment-specific trends, future capital investment plans, and shareholder return policies.

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1. Consolidated Earnings Highlights: Significant Growth in Revenue and Operating Profit

In Q1 FY2027, consolidated revenue rose +8.9% year-on-year to 65.032 billion yen , while operating profit surged +38.8% to 9.29 billion yen . Ordinary profit reached 10.374 billion yen (+38.0% YoY) , and quarterly net profit attributable to owners of the parent company was 5.40 billion yen (+31.1% YoY) .

Why this slide is important: Progress rates and segment-driven momentum

The slide above (Q1 Consolidated Results) demonstrates that the company’s progress toward its first-half targets (revenue of 132.3 billion yen, operating profit of 18.1 billion yen) is at an exceptionally high level . Notably, the first-half progress rate for operating profit has reached 51.3% , confirming that profit is accumulating at a pace exceeding the initial plan as of Q1. Looking at operating profit by region, the Japan segment contributed 6.155 billion yen (+30.8% YoY) , the North America segment 2.037 billion yen (+103.4% YoY) , and the Asia segment 952 million yen (+11.2% YoY) , indicating a well-balanced performance with profit growth achieved across all regions.

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2. Factors Behind Operating Profit Growth: Japan and US Operations Lead the Way

The 2.596 billion yen increase in operating profit compared to the same period last year is attributed to improved profitability in both Japan and North America. Key positive factors include:

• Maruichi Steel Tube (Non-consolidated) : Profit increased by 634 million yen due to higher sales volume and a focus on profitability in manufacturing and sales.
• Maruichi Stainless Steel Tube : Profit increased by 364 million yen following a recovery in demand for BA (Bright Annealed) tubes.
• Leavitt (USA) : Profit increased by 755 million yen due to spread improvements following the rise in CRU prices.
• Other North American Subsidiaries (MNT, MAC, MOST) : Contributed a combined profit increase of 351 million yen .

Conversely, Mexico (MMX) saw a profit decline of 69 million yen due to lower production volumes by Japanese automakers, and the Philippines (MPST) saw a decline of 86 million yen due to price support measures for motorcycle manufacturers. However, these did not disrupt the group's overall strong growth trend.

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3. Domestic Business (Non-consolidated): Maintaining High Profitability in a Challenging Market

The domestic structural steel tube market remains sluggish, impacted by construction delays caused by labor shortages in the housing sector. While there are signs of recovery in automobile production, the impact on overall sales volume remains limited.

Despite this environment, Maruichi Steel Tube’s non-consolidated Q1 sales volume increased +3.5% year-on-year to 168,027 tons . This was supported by joint sales efforts with group companies targeting large-scale projects such as data centers. Operating profit rose +15.1% to 4.846 billion yen , representing a 52.9% progress rate against the first-half plan (9.158 billion yen). Furthermore, with the determination of provisional anti-dumping duties on galvanized steel sheets from China and South Korea, and the initiation of dumping investigations into hot-rolled and cold-rolled steel sheets, the company is pushing forward with increased orders and phased price negotiations.

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4. High-Value-Added Business (Maruichi Stainless Steel Tube): Rapid Recovery in BA Tubes for Semiconductors

Maruichi Stainless Steel Tube, a key growth driver for the company, has seen a significant recovery in demand for BA tubes used in semiconductor manufacturing equipment and piping. Driven by the construction of new Samsung plants in South Korea and China, Q1 BA tube sales volume jumped to a monthly average of 142,000 units (+62.1% YoY) .

Consequently, the operating profit for Maruichi Stainless Steel Tube surged to 486 million yen , roughly four times the level of the same period last year. The company anticipates further volume growth in the second half and is accelerating the establishment of a production system for BA tubes, including increasing headcount. The annual sales volume target is also set at a high level of 190,000 units per month .

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5. US Texas Facility (MST-X): Challenging for Full-Year Profitability Through New Market Development

BA tube sales at MST-X in Texas remained sluggish in Q1 at a monthly average of 2,832 units , resulting in an operating loss of 137 million yen (compared to a 170 million yen loss in the same period last year). A full-scale recovery in semiconductor investment in the US is expected from the second half of this fiscal year.

In response, the company has begun transactions with major wholesalers for the hydraulic and instrumentation (H&I) piping market in addition to traditional semiconductor applications. The company plans to rapidly expand sales volume to a monthly average of 42,071 units by the second half, aiming to strengthen its business foundation to achieve full-year operating profitability (target: 491 million yen profit) .

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6. North American Business: Spread Expansion and Strong Performance of Structural Steel Tube Subsidiaries

In the North American market, data center construction and demand for fencing along the Mexican border are providing solid support for steel tube demand. As local manufacturers operate at full capacity, the supply-demand balance for hot coils has tightened, causing US CRU index prices to trend upward .

Why this slide is important: The profit-amplifying mechanism of price increases

The slide above (Four North American Structural Steel Tube Companies) clearly illustrates the dynamics where price increases (spread expansion) far outweighed the decline in sales volume caused by material shortages, thereby boosting profits . With CRU prices rising to $1,114/st by the end of June 2026, the combined Q1 operating profit of the four structural steel tube companies (Leavitt, MNT, MAC, MOST) jumped to 1.86 billion yen, approximately 2.5 times the same period last year. Individually, Leavitt saw profit rise to 834 million yen (approx. 10x YoY), MOST to 171 million yen (approx. 3.6x YoY), and MNT achieved a turnaround to profit (95 million yen) . Flexible production adjustments, such as diversifying material procurement sources and optimizing inventory, have effectively converted these favorable market conditions into profit.

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7. Mid-to-Long-Term Growth Strategy: Progress on the Maruichi Stainless Park (Shimonoseki)

To establish a foundation for mid-to-long-term growth, the company is proceeding with the construction of the "Maruichi Stainless Park" in Shimonoseki, Yamaguchi Prefecture. The "Stainless Welded Steel Tube Plant" (production capacity: approx. 1,500 MT/month), with a total investment of approx. 22 billion yen , is scheduled for commercial production in the second half of FY2027 .

Furthermore, the company is investing approx. 26 billion yen to build a "5,000t Large Press Plant" (production capacity: approx. 2,000 MT/month) on existing factory grounds, aiming for commercial production in the first half of FY2028 . These state-of-the-art facilities are expected to establish a world-class stainless steel tube supply system.

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8. Asia Segment: Responding to Infrastructure Demand and Mobility Production Growth

In the Asia segment, Q1 sales volume increased +9% year-on-year, with revenue rising +8.5% to 11.2 billion yen and operating profit growing +11.2% to 952 million yen .

• Vietnam (SUNSCO) : Sales volume increased +7.1% due to strengthened exports of surface-treated steel sheets to Southeast Asia and rising local infrastructure demand. Supply to EV maker VinFast and the two-wheeler/four-wheeler sectors is being expanded.
• India (KUMA) : Against the backdrop of a booming automotive market (Q1 four-wheeler production +16.8%, two-wheeler production +22.8%), sales volume increased +20% . The company aims for a full-year operating profit margin of 9% or higher through price revisions and cost reductions.
• Philippines (MPST) : The expansion of the 2-inch mill is complete, establishing a system to support the production increase of major customer Honda (which is raising annual production capacity to over 1 million units).

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9. Full-Year Earnings Outlook: Strong First-Half Progress, but Maintaining Conservative Guidance

Despite the excellent Q1 performance, the company has maintained its full-year consolidated earnings forecast for FY2026 (ending March 2027) . The full-year targets are revenue of 274.5 billion yen (+12.6% YoY) , operating profit of 36.9 billion yen (+15.2% YoY) , ordinary profit of 38.0 billion yen (+11.0% YoY) , and net profit attributable to owners of the parent of 25.7 billion yen (-3.7% YoY) .

The primary reason for maintaining the forecast is caution regarding the risk of profit margin compression due to rising domestic coil (raw material) prices and uncertainty in overseas market conditions. However, with the full-year progress rate for operating profit at 25.2% and the first-half progress rate at 51.3% , there is potential for an upward revision depending on market trends in the second half.

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10. Capital Policy and Shareholder Returns: Sustaining High Return Levels and Share Buybacks

Maruichi Steel Tube places high priority on improving capital efficiency and actively returning profits to investors.

Why this slide is important: Clarification of shareholder return policy and reassurance

The slide above (Initiatives for Shareholder Returns and Capital Efficiency Improvement) demonstrates the company’s unwavering commitment to a high profit-return stance . The annual dividend for FY2026 is planned at 52.00 yen per share (interim 26.00 yen, year-end 26.00 yen), with a projected dividend payout ratio of 44.4% . Furthermore, in addition to dividends (total annual amount of 11.3 billion yen), the company plans to acquire 10 billion yen in treasury stock , bringing the total return amount to 21.3 billion yen and the total return ratio to an exceptionally high level of 83% . Having maintained a total return ratio of around 80–95% over the past several years, the company’s firm commitment to creating shareholder value is evident.

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Summary

In Q1 FY2027, Maruichi Steel Tube demonstrated superior profitability by capturing multiple tailwinds: "spread expansion in US structural steel tubes," "rapid recovery in semiconductor-related stainless BA tubes," and "capturing mobility and infrastructure demand in Asian countries."

Although the full-year forecast remains unchanged to account for risks such as rising domestic raw material costs, the operating profit progress rate for the first half has already exceeded 50%, indicating a very disciplined management state. Furthermore, the company is successfully balancing the construction of future growth foundations through large-scale investments, such as the "Maruichi Stainless Park (Shimonoseki)," with generous shareholder returns reaching a total return ratio of 83%. Future developments are highly anticipated.