4Q決算：着地は堅調も27/3期会社計画は低調、想定線、新中計、Buy

Research evidence excerpt

4Q決算：着地は堅調も27/3期会社計画は低調、想定線、新中計、Buy

s, and (3) persistently weak

domestic sponge demand. Segment-wise, titanium operating profit is guided down nearly

halved again (-48%), only partially offset by recovery in high-performance materials.

New mid-term plan. The new mid-term plan “OTC 2030” is a structural growth and

transformation strategy centered on capacity expansion and portfolio diversification, targeting

¥100bn sales, 20% ROS, and 20% ROE by 2030 (vs. ~¥47bn sales and ~12% ROS in FY3/25).

The core pillars are: (1) expanding titanium sponge capacity (including a new plant) to

capture aircraft demand growth and increase market share, (2) scaling the high-performance

materials business (semiconductors, battery materials, etc.) to reduce reliance on aerospace,

and (3) improving capital efficiency and profitability via disciplined investment and pricing

optimization. The plan also embeds ESG (GX/DX/human capital) and a financial strategy

aimed at improving ROE and reducing leverage over time. Importantly, the roadmap implies

a“sowing phase” until ~2028 (heavy CAPEX, weak FCF) followed by a “harvest phase” with

higher profitability and returns.

Sponge titanium supply/demand. The company’s outlook on sponge titanium is structurally

bullish despite near-term cyclical weakness. In the short term, demand is being held back

by inventory adjustments in the aircraft supply chain, which is the key driver behind current

earnings pressure. However, over the medium to long term, demand is expected to grow at

around ~6% CAGR, driven by aircraft production growth and increasing titanium usage to

reduce weight and improve fuel efficiency. At the same time, supply remains constrained

because titanium sponge production requires high upfront investment and long lead times,